The rules around how broadband providers advertise the price of their products are set to change after the Advertising Standards Authority (ASA) and Ofcom ruled that the current approach is confusing and misleading.
The watchdogs carried out a joint research project and found that 81 per cent of the 300 people surveyed were not able to correctly calculate the total cost of a broadband contract when asked to do so.
The objective of the research was to test consumers’ likely understanding, based on viewing current ads, of the presentation of pricing offers in typical broadband ads - most commonly those featuring the price of the broadband itself and the monthly line rental alongside it.
The research looked also at the presentation, and likely consumer understanding of additional pricing elements such as introductory deals, discounts, activation, delivery charges and the length of the contract.
The ASA said that it is "open minded" as to how pricing should be advertised but from 30 May will suggest to broadband providers that they advertise: all-inclusive up-front and monthly costs; no more separating out line rental; greater prominence for the contract length and any post-discount pricing and greater prominence for up-front costs.
ASA chief executive Guy Parker said: “It’s essential we make sure people aren’t misled by pricing claims in broadband ads. That obviously wouldn’t be good for them, but nor would it benefit broadband providers, because advertising works better when it’s trusted. We’ll now be moving quickly, working alongside broadband providers, to clarify the presentation of price information.”
In response to the news a TalkTalk spokesperson said the company "absolutely supports" the ASA and Ofcom.
“It's obvious that a single headline price is much clearer and better for customers, and we're actually already doing it on a pilot project up in York.
“But until the whole market moves to single prices, any company that advertises its products like this will struggle to compete with what look like better deals from other providers. We want Ofcom to be bold and tackle this problem in their strategic review and we would absolutely support them in doing so.”
Elsewhere a new report from Kantar Worldwide has found that customers have lost faith in TalkTalk following last year’s data hack and its share of the market has plummeted as a result.