Advertising Standards Authority to force broadband price transparency
Broadband suppliers, including Sky, Virgin Media and TalkTalk have been ordered by the Advertising Standards Authority (ASA) to be clearer about costs in their advertising. A joint study by the ASA and Ofcom found that customers were being left “baffled” by the separate costs involved and fewer than 25% could work out the total monthly fees after watching an advert. Last year all three companies were criticised by ASA for “misleading offers”. ASA chief executive Guy Parker said: “This new tougher approach has been developed to make sure consumers are not misled and get the information they need to make well-informed choices”.

The Advertising Standards Authority has ordered broadband firms to stop advertising deals that hide the true cost of a contract

Broadband firms face a massive shake-up over misleading deals, a watchdog has revealed.

For regulator the Advertising Standards Authority (ASA) has ordered providers such as Sky, TalkTalk and Virgin Media to spell out the full cost in ads.

According to research by the ASA and Ofcom, a failure to reveal line rental, the length of a contract and price after promotion in one go, is leaving customers baffled over the full cost of a package.

The joint study found less than a quarter of broadband users were able to work out the total monthly fee for the service after watching a TV commercial.

And eight in ten did not understand the full cost of a broadband contract when asked to calculate it.

Last year Sky, TalkTalk and Virgin Media were reprimanded by the watchdog following complaints over misleading offers.

Now the ASA wants providers to show up-front and monthly fees so customers can tell at a glance how much deals cost.

And it has called for contract lengths and post-discount prices to be prominently displayed.

The new advertising rules come into force on October 31 and ASA chief executive Guy Parker said it was time to “get tough” with broadband firms.

He said: “We recognise the importance of broadband services to people’s lives at work and at home.

“The findings of our research, and other factors we took into account, showed the way prices have been presented in broadband ads is likely to confuse and mislead customers.

“This new tougher approach has been developed to make sure consumers are not misled and get the information they need to make well-informed choices.”

On Tuesday, TalkTalk backed the ASA ruling and admitted the industry had fallen into “a bad habit” by splitting the price of broadband so monthly fees and line rental were shown separately.

It vowed to have “all-in pricing” in ads by the autumn.

Tristia Harrison, TalkTalk’s consumer managing director, said: “As long as line rental and broadband are priced separately, the temptation to advertise deals in this way will always be there.

“But it’s time for providers be honest about this - it’s a bad habit we have all been guilty of, it doesn’t serve customers well and it’s time it stopped.

“We want to make things simpler and fairer for customers. People deserve to know they are getting value for money and, as the value for money provider, TalkTalk is going to fight hard to ensure customers get the transparency they deserve.”

Virgin Media said it would work with the regulator to make prices clearer but called on the ASA for a similar shake-up of broadband speed advertising.

It said: “To properly compare different broadband offers, consumers need to assess the whole deal - price and speed.”

Telecoms advice site Cable.co.uk welcomed the ASA’s move and its broadband expert Dan Howdle said: “Compound or split pricing - whether under the guise of ‘plus line rental’ or a ‘toilet charge’ on a budget flight - is predatory, since it relies on consumers failing to grasp the true combined cost.

“Up to this point, clarity of pricing on broadband packages has been misleading and complicated.

“The industry appears to finally have come to its senses, even if it is at the receiving end of some determined prodding from Ofcom and the ASA.”