Who: Committee of Advertising Practice (CAP) and Broadcast Committee of Advertising Practice (BCAP)
Where: United Kingdom
When: 8 September 2022
Law stated as at: 10 October 2022
What happened:
CAP and BCAP are consulting on a set of guidance principles that they consider will help telecoms companies make ads which are less likely to mislead consumers about mid-contract price increases.
The decision to consult stemmed from a number of ASA investigations into the portrayal of mid-contract prices increases in ads for a number of different telecoms providers, some of which caused complaints from competitors. Given the different types of contracts available and the range of implications for consumers, CAP and BCAP agreed to review the issue through a consultation process.
In its pre-consultation engagement with consumer groups and stakeholders representing the views from the telecoms industry, CAP and BCAP identified a number of key areas for concern, including:
- The “cost of living” crisis changing consumer behaviour, with most (if not all) consumers experiencing a squeeze across essential expenditure.
- The variety of products available, that is, different combinations of mobile and broadband services that may have varying durations and terms and conditions.
- A sense that the current position was too “one size fits all” and the need for a more nuanced approach that would take into account the range of different services and contracts in the market and their implications for a consumer’s statutory rights.
CAP and BCAP set out in their proposal that the existence (or known possibility) of a mid-contract price increase and the nature of that price increase (if known) constitute material information that a consumer requires before making their transactional decision. Therefore, ads which omit this information or present it in an unclear manner will likely mislead consumers.
Ads will still be addressed by the ASA on a case-by-case basis, but CAP and BCAP have set out a model which they consider is most likely to comply with the advertising codes and therefore less likely to mislead consumers. An ad will be more likely to comply when:
- Information indicating the presence or possibility of a price rise is either part of the price claim, or placed immediately next to it.
- Information about the nature of the price rise (if known) is featured prominently within the main copy of the ad; for example, no lower than “one step”, the initial price claim and linked by an asterisks to the main price claim in static-format ads.
- Descriptions of future price rises and terminology used are clear and simple to understand; for example, terms like “RPI” are set out in full the first time they are used.
- Advertisers take care to distinguish the full contractual price ahead of the tiered increase from any other introductory discounts that may apply.
- Advertisers consider the time of year the ad is being published, relative to the timing of any annual inflation-linked increase (usually April) to avoid misleading consumers.
The consultation is currently open for responses from interested parties (including members of the public) until 5pm on Thursday 17 November.
Why this matters:
Advertising in the telecoms sector is an area of focus for the ASA, having also set out guidance for comparison claims. The ASA has investigated a number of comparisons made by telecoms companies that seek to gain the advantage over competitors. Marketers are reminded that before making any comparative claim, they must consider: how consumers will interpret the claim (for example, is it “puffery”, an objective claim and a comparison with identifiable competitors); if it is objective, how the marketer substantiates the claim; and complying with the rules set out in the relevant section of the CAP Code when making comparisons with competitors.
