Who: Advertising Standards Authority (ASA) and Ofcom
Where: United Kingdom
When: 17 January 2025
Law stated as at: 17 January 2025
What happened:
Telecoms providers delivering services to consumers and small businesses from the 17 January have been banned from linking mid-contract price rises to inflation or other percentage-based increases. Instead they will have to set out, at the point of sale, if there will be a price increase during the minimum commitment period, when any price increase will occur and the amount of the increase in pounds and pence. These changes only apply to new customers.
In light of these changes to the Ofcom General Conditions, the Committee of Advertising Practice (CAP) and Broadcast Committee of Advertising Practice (BCAP) guidance on presenting mid-contract price increases has also been updated. Although the existing guidance already required that the price increase be stated in full, this was based on the common market practice of tying price increases to inflation (a variable amount).
Now that the changes are in effect, it will be possible for providers to calculate the prices throughout the minimum commitment period prior to the commencement of the contract. Consequently, it has been clarified in the CAP and BCAP guidance that the full future monthly price and the dates when any increases apply are likely to constitute material information that the consumer requires in order to make an informed transactional decision.
While there have been some changes to the guidance, the “prominence” principles remain the same. If complied with, these ensure that advertising contracts for telecoms services incorporating a mid-contract price rise are less likely to mislead if the information on the full future price rise (in pounds and pence) is prominently featured within the main ad copy and no lower than one “step” below the initial price claim and the existence or possibility of a mid-contract price rise has equal prominence to the initial price claim.
The amended guidance can be found here, and came into effect on 17 January 2025. While written specifically for business-to-consumer advertising, the principles may be taken into account by the ASA in assessing business-to-business advertising, depending on the circumstances.
Why this matters:
Telecoms providers must ensure that they have updated:
- Their terms and conditions and any related documentation to reflect the new price increase rules.
- Any marketing materials to include information on any price rises (in pounds and pence), presented with suitable prominence.
Failure to comply with the new measures could result in sanctions from both Ofcom and the ASA.
