Following an investigation, the Advertising Standards Authority is to recommend legislation requiring all broadband providers to include total package costs clearly in their adverts.
Following pressure from various groups, the ASA and watchdog Ofcom conducted an investigation into advertising standards in the broadband industry.
The investigation focused on what it found to be widespread practice of misleading pricing in adverts for broadband deals. They found that many providers had been offering headline prices for broadband tariffs that were not representative of the actual cost of the deal once added costs like line rental were included.
The ASA and Ofcom surveyed a cross-section of consumers in January and found that an overwhelming majority found it difficult or impossible to identify the actual cost of a tariff from its advert.
Just 23% of those surveyed were able to identify the cost of a plan on the first viewing of an advert, and 22% were still unable to after a second viewing.
81% of survey participants could not, on request, accurately calculate the total cost of the given broadband tariff, based on information in the advert. And 74% “believed that the information regarding one-off and ongoing costs after an introductory period was either fairly or very unclear”.
“Joint research commissioned by the Advertising Standards Authority (ASA) and Ofcom has revealed that pricing offers in fixed broadband [adverts] are likely to mislead consumers about the true cost commitment of introductory and on-going broadband deals and the cost commitment over the lifetime of the contract.”
In response to the findings, the ASA will be enforcing proposals that force broadband providers to include all of the costs of a tariff in one headline price, removing the chance for misunderstanding for customers.
The regulations will come into force on the 31st October 2016.
Guy Parker, chief executive of the ASA, said: “We recognise the importance of broadband services to people’s lives at work and at home. 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.
“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.
“We’ll support the broadband industry as they move towards changing their approach in time for the October 31st deadline.”
Prior to the announcement of the October deadline, broadband provider Talk Talk already revealed that they will stop charging for line rental separately to the overall cost of their broadband tariffs.
Talk Talk’s consumer managing director, Tristia Harrison, said: “As long as line rental and broadband are priced separately, the temptation to advertise deals in this way will always be there.
“But it’s time for providers be honest about this – it’s a bad habit we have all been guilty of, it doesn’t serve customers well and it’s time it stopped.
“We want to make things simpler and fairer for customers. People deserve to know they are getting value for money and, as the value for money provider, TalkTalk is going to fight hard to ensure customers get the transparency they deserve.”
Virgin Media have also made it clear that they are on board with the ASA’s changes, but also said that they should go a step further and force providers to be clearer about advertising the speed of broadband connections.
A spokesperson for the company said: “To properly compare different broadband offers, consumers need to assess the whole deal – price and speed.”