“81% of participants couldn’t correctly calculate the total cost of a broadband contract.” We spoke to the Advertising Standards Agency to find out exactly why it’s put its foot down on line rental and broadband pricing.
The eagle-eyed of you out there may have noticed that some providers have changed the way they list their broadband packages.
Vodafone, for example, has stopped separating out line rental and broadband into separate prices for its fibre packages, instead listing an 'all-in' price. TalkTalk's gone one further, and launched all-in pricing on all its products. You can expect all the other providers to follow suit soon.
But why are they doing this? It's partly because they've twigged that it's better for customers - less confusion equals less frustration. But it's also because new rules from the Advertising Standards Agency (ASA) say they have to.
The organisation hopes that it'll make broadband advertising easier to understand, and let people know exactly how much internet will cost them each month.
That sounds good to us, but we wanted to find out more. So we did the sensible thing and went straight to the source - the ASA itself. We put some questions to Shabnum Mustapha, the ASA's media and public affairs manager.
Hi Shabnum. So let's start with an easy one. What's the ASA and what does it do?
The ASA is the independent regulator of advertisements across all media in the UK - including online. Our purpose is to make sure every ad is legal, decent, honest and truthful - basically, we want every ad to be a responsible ad.
To that end, we regulate ads in the public interest and with the co-operation of advertisers, agencies and media owners who are committed to observing the Advertising Codes. We act independently from both the Government and the advertising industry.
As a regulator we deal with complaints every day - over 29,500 in the last year - and as a result of our work, more than 4,500 adverts were changed or withdrawn.
Can you give a brief overview of what the ASA's new rules on broadband advertising are, and who they apply to?
Earlier this year we announced that we're strengthening our approach to advertised fixed broadband price claims to avoid customers being misled. The new approach applies to all broadband providers offering services to members of the public and will come into force on 31 October 2016.
In order for broadband providers to ensure they stay within the rules, we recommend that future broadband ads which include price claims should:
- Show all-inclusive up-front and monthly costs; no more separating out line rental
- Give greater prominence for the contract length and any post-discount pricing
- Give greater prominence for up-front costs
What issues / challenges were the rules created to address
In January, we published joint research with Ofcom, which found that the current approach to presenting pricing in fixed broadband ads is likely to confuse and mislead consumers about the cost of broadband services.
The research tested consumers' likely understanding of the presentation of pricing offers in current broadband ads, including line rental. Participants found it difficult to calculate the true cost of a contract when presented with ads where the different elements - broadband, line rental, contract length and one-off costs - were presented separately with some elements given greater prominence than others.
In fact, only 23% of participants could correctly identify the total cost per month after the first viewing of the ad. 22% of participants were still not able to identify correctly the total cost per month even after a second viewing of the ad. 81% of participants couldn't correctly calculate the total cost of a broadband contract when asked to do so.
Since January, we've been engaging with the broadband industry and other key stakeholders, including consumer groups, on this very issue. That's included seeking feedback on proposals designed to address the difficulties participants reported in our research.
Why has the ASA done this now?
As a regulator, we're aware of consumer concerns, and where we need to tighten up our existing rules or introduce new rules, we do.
In this instance we took action in response to the evidence that was building up, which showed that there was a consumer detriment to current broadband ads.
This came from the complaints we were receiving from consumers as well as concerns raised by consumer protection bodies like Citizens Advice and OFT research. This led us to commission our own research jointly with Ofcom and, as a result, we have strengthened the rules.
How will the new rules change how people buy broadband?
We expect the new rules will result in ads that make the true cost of a broadband service clear. Advertising is only one part of the customer journey when buying any product, including broadband, but we think the changes will help consumers to make more informed choices when buying broadband.
Will your new rules affect broadband bills? Will people have to pay more or less than before?
We're an advertising regulator so we don't determine broadband bills, or how much providers charge for their services. Our changes relate only to the way in which those charges are presented in advertising.
How is the ASA planning to ensure that providers adhere to these new rules?
We're working with broadband providers on this issue and we'll continue to support advertisers to help them get their ads right.
As of 31 October 2016 we'll investigate any ads that we consider might mislead consumers. If we find that any ads we think are likely to mislead, we'll ban them.
Is something similar planned for business broadband?
We receive very few complaints about the way business broadband is currently advertised and we have no plans to review it specifically.
If business broadband customers have concerns regarding the clarity of a price message in a particular advert, they should get in touch with us via our website: www.asa.org.uk.
Are you looking at clearing up any other elements of broadband advertising?
Yes. We're currently undertaking research examining whether advertised speed claims are likely to mislead consumers about the speeds they expect to get.
If the findings of our research show there's a need for a different approach, then we'll take appropriate action.
That's a fascinating insight into why the ASA's pushing for these changes.
We do think these changes are a positive step forward. We'll all have a much clearer idea of how much internet really costs, which means comparison will be even easier. Plus they'll be less bill shock, as you'll know exactly how much moolah's coming out of your account each month.
We've got loads more information about the big changes to broadband pricing, including the impact on your bill, in our full guide. Go read it now!