News
Telcos no longer allowed to separate line rental charge from subscription fees.
U.K. telcos will have to advertise broadband subscription fees and line rental costs as a single price from the end of October in order to comply with new advertising rules confirmed on Wednesday.
The Advertising Standards Authority (ASA) said that from 31 October, adverts must show all-inclusive up-front and monthly costs of broadband, as opposed to the standard practice of splitting out the cost of subscribing to the service and the cost of renting the physical cable connecting the premises to the network.
The new rules stipulate that greater prominence must be given to the length of the broadband contract and the price of the service once any temporary discounts have expired. Greater prominence must also be given to up-front costs, such as connection fees, equipment costs and delivery charges.
TalkTalk blazed a trail for a whole 24 hours, announcing on Tuesday that it will advertise all-inclusive pricing from the autumn.
"This new tougher approach has been developed to make sure consumers are not misled and get the information they need to make well-informed choices," said Guy Parker, CEO of the ASA, in a statement.
Research published by the advertising watchdog in January revealed that 23% of consumers were unable to correctly identify the total monthly cost of a broadband service upon first viewing an advert. After a second viewing, 22% still had not ascertained the cost.
"The findings of our research, and other factors we took into account, showed the way prices have been presented in broadband ads is likely to confuse and mislead customers," Parker said.
Broadband comparison Website Cable.co.uk said the ASA’s rules do not go far enough to prevent unscrupulous practices.
The company’s telecoms expert Dan Howdle said telcos can still offer temporary discounts, such as a month’s free Internet security, or unlimited anytime calls for three months, for example, which is likely to perpetuate confusion about the real cost of broadband.
"The practice – known as compound pricing – was outlawed in the air travel industry by the EU’s top court in January of 2015. It is recognised as a misleading and disingenuous way to sell a product – luring customers in with cheap headline prices they simply won’t be paying at the till," he said.
"It’s about time the banning of compound pricing practices was extended to providers of broadband, TV and phone packages."
