Who: The Committee of Advertising Practices (CAP) and the Broadcast Committee of Advertising Practices (BCAP)
Where: United Kingdom
When: 15 June 2023
Law stated as at: 7 July 2023
What happened:
CAP and BCAP have published new guidance to help protect consumers against misleading advertising of mobile and broadband mid-contract price rises.
It is common for mobile and broadband providers to include clauses in their contracts which allow them to increase monthly costs on an annual basis (usually based on inflation, for example, Consumer Price Index (CPI) or Retail Price Index (RPI) rate). The initial price a consumer pays is destined to go up in the future but the amount is generally unknown. It is therefore vital that ads clearly inform consumers of these future price increase.
The new guidance notes that ads are less likely to mislead consumers when:
- They do not suggest that a price will apply for the full minimum term of the contract, if that is not the case – for example, claims such as “fixed for x months” are unlikely to be acceptable if the price is due to rise;
- Price claims are qualified with information alerting consumers to the possibility of a mid-contract price increase – in an equally prominent manner;
- The details of what the increase will be based on are featured prominently relative to the price;
- The language used to describe the inflation increase is presented in a way that is clear and simple to understand;
- They include the full amount the consumer will pay after the increase, once the relevant inflation rate is known; and
- They make clear where terminating a variable contract due to a price increase will impact other linked services.
Why this matters:
The Consumer Protection from Unfair Trading Regulations (CPRs) prohibit misleading or aggressive advertising practices, which are seen as unfair marketing to consumers. If a complaint is made that a marketing communication misleads consumers, the Advertising Standards Authority (ASA) will take the CPRs into account when considering whether the ad breaches the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code).
The guidance does account for a range of media (for example, television ads, online and print). An emphasis has been placed on ensuring that the information which indicates the price rise is given an equal prominence to the price claim itself. Advertisers are able to provide further details one step away from the original price claim.
As is always the case, the ASA will assess the compliance of each ad on a case-by-case basis, taking into account the content of the ad and its likely audience. The guidance is due to take effect from 15 December 2023, so advertisers will have a short grace period to allow them to make any changes to their advertising campaigns.
