Who: Advertising Standards Authority (“ASA“)
Where: UK
When: 31 October 2016
Law stated as at: 6 June 2016
What happened:
The ASA has announced that it will be cracking down on how fixed broadband price claims can be advertised from 31 October 2016. This announcement follows research commissioned by the ASA and Ofcom in January 2016, which we discussed here.
The joint research found that the current approach to presenting price claims in fixed broadband ads is very likely to confuse (and potentially mislead) consumers. This is particularly true where separate elements (such as the broadband itself, introductory offers, line rental fees, contract length and one-off costs) are presented separately, with some elements given greater prominence than others.
Consumers involved in the research found it difficult to identify the actual cost of advertised broadband contracts. Only 23% of the participants were able to correctly identify the total cost per month after the first viewing of the ad, with 22% still unable to do so after a second viewing. Also, a convincing majority of 81% of the research participants were unable to correctly calculate the total cost of a broadband contract when asked.
Since publishing their research, the ASA explains it has engaged with industry and other key stakeholders, including consumer groups, on the issues raised in order to develop new rules which will improve the clarity of broadband price claims.
Why this matters:
Broadband providers have been given 6 months, from the date of the announcement, to update their advertising practices. The ASA has clearly stated that the kind of price claims and descriptions that are currently presented to consumers are likely to break advertising rules as of 31 October 2016.
In order for broadband providers to ensure they stay within the rules, the ASA recommends that future adverts containing price claims should:
- Clearly state the all-inclusive, up-front and monthly costs of a broadband contract, without separating out line rental costs;
- Give greater prominence to the relevant contract length and any post-discount pricing changes; and
- Give greater prominence to up-front costs.
Some broadband providers have reacted quickly to this news. Ahead of the ASA notice, TalkTalk announced plans to become the first UK telecoms provider to end the practice of separating line rental from broadband prices. It will launch a new system of “all-in” pricing in autumn 2016, offering a single monthly cost including line rental.
Following the announcement on price claims, on 27 May 2016, the ASA launched further research into consumer understanding of broadband ad claims, this time in relation to connection speeds (see here). This research will be run in conjunction with the Committee of Advertising Practice (CAP), with the results intended for publication by early autumn 2016. At that stage, CAP will decide whether any further changes need to be made to current guidance.
