The guidelines aim to provide more transparency for customers when they sign up to mobile or broadband contracts, making it clearer that prices could increase and by how much
At the start of this year, following the publication of Office of National Statistics inflation data, most of the UK’s mobile and broadband operators confirmed that they would be increasing their contract prices in line with inflation – at average of 14.4%.
This announcement sparked Ofcom to launch a review of inflation-linked mid-contract telecoms price rises, with the regulator’s initial studies showing that around a third of mobile and broadband customers were unaware that their provider could change the price of their contract.
In addition, the study showed that, even amongst those that knew prices could be increased, only around half understood how this would be calculated. Indeed, among all customers, less than half understood what metrics like CPI (Consumer Price Index) and RPI (Retail Price Index) actually measure.
Now, following its own consultation, the Committee of Advertising Practice (CAP), part of the Advertising Standards Agency (ASA), has published new guidance on the matter of pricing transparency, hoping to stop consumers being stung by these unanticipated and misunderstood price increases.
The primary focus of these guidelines is on the ways in which telcos communicate with their customers, calling on them to display the price increase information more clearly rather than burying it in the fine print.
More specifically, the guidelines call for ads to use plain language and to display the possibility of a price rise with equal prominence as the price claim. For example, using an asterisk to include this information more than one ‘step’ below the pricing claim, or linking to a separate web page to explain this possibility, is unlikely to comply with these new guidelines.
The full guidelines can be found here.
If service providers fall afoul of these guidelines, they could face legal ramifications from the ASA.
The new guidance will take affect from December 15 2023, allowing the service providers a six-month grace period to comply.
Most of the telecoms industry moved forward with the planned price hikes in April, with some notable exceptions such as Hyperoptic.
Are operators being transparent enough when it comes to consumer contract pricing? Join the telecoms ecosystem in discussion at this year’s Connected Britain event
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