Citizens Advice Says Broadband ISP Adverts Mislead and Confuse People

Once again the Citizens Advice agency has claimed that “misleading adverts” for home broadband packages are making it “too difficult” for consumers to work out which promotion is the cheapest. But their proposed fix of forcing ISPs to include line rental into a single price could create new problems.

The national charity base their latest claim on a study that they conducted with ComRes, which asked an unknown number of respondents to both compare two deals and to then work-out the price of a broadband contract from the adverts and marketing materials used on seven different providers’ websites.

ComRes Survey Result Highlights

* 56% were unable to pick out the cheaper deal when comparing broadband ads.

* Only 22% of respondents, when looking at one particular broadband advert, were able to work out what they would be paying on average per month for an advertised deal.

* 75% found the information in most adverts for broadband to be too complicated to easily compare.

However Citizens Advice, which goes on to claim that consumers who are unable to identify the cheapest package could be “left between £7 and £197 out of pocket over the length of their contract“, don’t allow us to see precisely what promotions they asked respondents to compare. In addition, choosing the cheapest deal can also equal worse support and slower speeds.

Thankfully most people did understand that the headline price wasn’t the overall cost, yet many were clearly struggling to identify the actual cost of what they were buying. Citizens Advice puts this down to the fact that many adverts typically come advertised with a promotional period featured prominently, which can be free or significantly lower than the overall cost of the contract. But they also claim that the cost of line rental and the length of time that the “teaser” price applies is included separately and often only in small print.

Gillian Guy, CEO of Citizens Advice, said:

“Misleading broadband adverts are hiding the true cost of a contract. Attractive headline offers that don’t include line rental costs make it impossible for people to work out the best broadband deal on offer without doing complicated sums. This stands in the way of people being able to make an informed decision about what internet package is best for them.

A broadband market that works for consumers should be competing on the overall cost of the available deals rather than on how difficult they can make it for people to work this out.

Broadband providers need to make the costs of a contract clear in their advertising and the Advertising Standards Authority should also review the code of practice to make sure it works well for consumers.”

Citizens Advice certainly makes a perfectly valid point and even we ourselves are sometimes confused by the promotions that ISPs ask us to cover, especially those where the non-offer pricing is hidden inside a plethora of convoluted small print (e.g. BT). We’ve also seen some deals where there can be three pricing levels (e.g. free service for 12 months, then £10 per month for 6 months and £17.50 per month thereafter), which can be a headache to work out from the small print / public explanations.

However the agency’s proposed solution, which calls for the cost of line rental (phone) to be included in the headline price (apparently 88% said that this would be make it easier for them to choose the right broadband option), is perhaps not the best fix because it fails to recognise that line rental is a very dynamic problem.

Firstly, many ISPs (especially smaller ones) still sell broadband as a separate service and allow you to use another provider for phone / line rental. In this case the line rental product itself is often purchased by providers from BTOpenreach as a separate service, so it doesn’t have to be sold as a bundle.

On the flip side some ISPs are able to offer a truly standalone broadband package, such as pure fibre optic (FTTP/H) or cable (DOCSIS) operators, which means that line rental is covered as part of a single cost (many of these don’t sell a separate phone product), but they are fundamentally separate platforms from Openreach’s network and have different availability.

Of course if all ISPs required a mandatory line rental + broadband bundle then an “all in” price would be easy to do, but the fact is that they don’t and the wider market is more flexible and diverse than Citizens Advice appears to realise. A one size fits all approach won’t work for everybody and may also create new confusion for the many ISPs that offer broadband and line rental as separate (not bundled) products. Equally it would NOT stop ISPs from using confusing promotional prices.

In our view a better solution would be to require that ISPs become much clearer with their prices, such as by preventing overly confusing offers (e.g. like our earlier example where the monthly price goes through more than one change), offering a clear breakdown of package costs and or offering a total package cost for year 1 and year 2 (i.e. reflecting the impact upon price both before and after any discounts).

At the end of the day it’s less much a question of line rental, since there is no reason why ISPs cannot promote their pricing in a clearer way by being more transparent with what they’re doing  / discounting and adopting a simpler approach to how they display service prices.

Citizens Advice has of course raised this problems a few times before (here and here) and as a result the Government have already agreed to investigate their concerns (here), which is a good thing. However we do hope that the Government take a wider look at the market because line rental is more diverse then Citizens Advice appears able to reflect.

UPDATE 9:51am

Citizens Advice has kindly informed us that they surveyed 2,025 British adults.