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Change to broadband pricing on the cards

Change to broadband pricing on the cards

Category: Broadband

Updated: 21/01/2016
First Published: 21/01/2016

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

If you thought that broadband pricing was confusing – or even misleading – you're not alone. Research commissioned by the Advertising Standards Authority (ASA) and communications regulator Ofcom has found that the current approach to broadband advertising "is likely to confuse and mislead consumers about the true cost of broadband deals", and change is on the way as a result.

Lack of pricing awareness

The research looked at consumers' likely understanding of the pricing shown in typical broadband ads, with confusion often arising when it comes to the cost of the broadband itself as well as the associated line rental costs, particularly when introductory deals are the most prominent aspect of an advert.

The research found that just 23% of participants correctly identified the total monthly cost of a broadband package after viewing its advert, while 34% were able to recall some pricing details, but the information was either incomplete or they gave an incorrect figure of the total cost.

A further 22% were still not able to correctly identify the cost after watching the advert for a second time, with 64% of those thinking that the headline price for the broadband element of the package constituted the total cost per month, and that line rental wasn't applicable.

Overall, 81% of participants were not able to correctly calculate the total cost of a broadband contract when asked to do so, with 74% believing that information about one-off and ongoing costs after an introductory period was either fairly or very unclear.

Tougher rules on the way

In response to the issues identified, the ASA says that it will raise their concerns with broadband providers in order to "bring about change, by 30 May 2016, to the way broadband pricing is advertised so that consumers are not misled".

Essentially, this means that the current approach typically taken by advertisers, whereby prices for several elements of the offer (including broadband itself, the introductory offer, line rental and contract length) are presented separately, is likely to mislead consumers – and from 30 May, will probably break the rules.

The ASA says that it remains "open minded" about how pricing should be advertised, but is adamant that it shouldn't mislead consumers. As such, they're suggesting that broadband providers advertise the all-inclusive monthly costs at face value, without separating out line rental; give greater prominence to the contract length and post-discount pricing; and clearly highlight the upfront costs involved.

ASA chief executive Guy Parker commented on the announcement: "It's essential we make sure people aren't misled by pricing claims in broadband ads. That obviously wouldn't be good for them, but nor would it benefit broadband providers, because advertising works better when it's trusted. We'll now be moving quickly, working alongside broadband providers, to clarify the presentation of price information."

Their final recommended approach on advertised pricing offers is yet to be decided, but the complete rule change will be communicated before 30 May. In the meantime, don't be afraid to be proactive – if you think you're paying too much for your broadband or are shocked by your potential renewal cost, it's time to switch! Check out our search tool to find the best deals for you, and as long as you carefully consider everything from the cost of broadband and line rental to the length of the deal, you can be confident that you're choosing wisely.

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