Broadband ads misleading and must change, says ASA
From October broadband providers must make sure adverts for their products are very clear about costs and contract lengths, the Advertising Standards Authority has ruled.
ASA research suggests many people find it difficult to make sense of current adverts.
More than 80% were unable to calculate the total cost of a broadband contract when asked to do so, the ASA found.
TalkTalk has said it will scrap separate line rental charges.
In a study of how people reacted to current adverts, conducted with regulator Ofcom, only 23% of participants could correctly identify the total cost per month after their first viewing. Twenty-two per cent were still not able to identify this figure after a second viewing, said the ASA.
To make sure broadband providers ensure they stay within the new rules, the ASA recommends that future ads should:
- Show all-inclusive, upfront and monthly costs, with no separating out of line rental prices
- Give greater prominence to the contract length and any post-discount pricing
- Give greater prominence to upfront costs
Commenting on the changes, ASA chief executive Guy Parker 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."
Issues with current ads include:
- A headline price for first month which goes up for the next 11 months of contract
- Hidden costs such as internet security - again may be offered free for one month and then charged at £3 or more a month
- Changes in the cost of calls - often free for first month, then charged
- Line connection fees
- Postage fees for sending router
"This kind of pricing would tax a maths professor, let alone a consumer who just wants to find the right broadband deal for their household," said telecoms expert Dan Howdle, from comparison website Cable.
"The practice - known as compound pricing - was outlawed in the air industry in 2015. It is recognised as a misleading and disingenuous way to sell a product - luring customers in with cheap headline prices they simply won't be paying at the till."
TalkTalk said it would "lead the way" and called on other providers to make sure that people were not lulled into "seemingly good deals that all too often mask extra charges".
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 to 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."
Mr Howdle said: "Now TalkTalk has opened fire, the rest of the industry will have to follow."