ASA Ban Ads for Major UK Telecoms Providers Over Misleading Price Hikes UPDATE

The UK Advertising Standards Authority (ASA) has today banned a series of website-based adverts for major broadband ISPs and mobile network operators, including BT, EE, Plusnet, TalkTalk, O2 and Virgin Media, after the way they all presented their annual mid-contract price hikes was found to be “misleading“.

The rulings relate to the ASA’s enforcement of their new guidance for how UK telecoms operators should communicate mid-contract prices hikes to consumers (here), which came into force during December 2023 and was designed to make such pricing policies clearer and more transparent to consumers.

In addition, it also touches on Ofcom’s recent (here), albeit not yet enforced, decision to effectively ban mid-contract price hikes that are linked to inflation and percentage changes (this won’t start until 17th January 2025). The regulator said that it would now expect telecoms and pay TV providers that apply in-contract price rises to “set these out clearly and up-front, in pounds and pence, when a customer signs up“.

However, regardless of whether or not a particular provider is still using the inflation-linked (CPI/RPI + X%) method for mid-contract price hikes, or has already begun expressing future hikes using “pounds and pence“, they must all still keep within the ASA’s recently revised guidance for related promotions.

Key Principles of the ASA’s Guidance

The new guidance makes clear that ads are less likely to mislead consumers when:

➤ They do not state or imply that a price will apply for the full minimum term of the contract, if that is not the case – for example, claims such as “£X for X months” or “fixed for X months” are unlikely to be acceptable if the price is due to rise and any subsequent qualifying information is likely to contradict rather than clarify the claim.

➤ Price claims are qualified with equally prominent information alerting consumers to the presence or possibility of a mid-contract price increase.

➤ The details of what the increase will be based on are featured prominently relative to the price.

➤ Inflation terminology is presented in a way that is clear and simple to understand.

➤ They include the full amount the consumer will pay after the increase, once the relevant rate is known.

➤ They make clear where terminating a variable contract due to a price increase will impact other linked services.

In short, the ASA found that BT, EE, Plusnet, TalkTalk, O2 and Virgin Media had not been adhering to the above guidance, although it is a little bit difficult to summarise so many rulings without this article becoming too laborious to read. Instead, we’re going to highlight some of the general points that were made against most of the providers in the ASA’s rulings, although you can still read each ruling via the links at the bottom of this article for the full context.

What did the ASA find?

➤ Most of the providers presented their package prices in big text and then, in small text underneath, often stated things like this: “Prices rise each year on 31 March by £3” or “The monthly price for your broadband plan will increase each year from April 2025 by the rate of inflation (the Consumer Price Index rate, published in January each year) plus 3.7%.”

The ASA noted that the price rise information was often in considerably smaller text and not always directly beneath the headline claims. It also found that the placement and size of the price rise information was likely to be overlooked by consumers, who would want to scroll down the page to engage with the details of the individual broadband packages on offer.

➤ The ASA found that the listings of the broadband and / or mobile packages often didn’t provide information explaining the nature of the increase, which they considered to be material information.

➤ Situations where the qualification for the price hike was explained at the bottom of the page, and not included within the listings for each broadband package, made the details of the increase unclear, as well as being too easy for consumers to overlook.

Broadly speaking, it’s not so much a problem with the method being adopted for the price hikes, but rather the lack of a clear presentation and description of those methods alongside the main package prices. Simply saying the prices will rise on X date is not enough, providers also need to clearly put the details of that increase alongside and not hide them further down the page or under a drop-down selection etc.

In all cases the ASA banned the adverts in their current form and told the providers to “ensure that they made sufficiently clear that their broadband contracts would be subject to mid-contract price increases“, and that “information about the nature of such price increases was presented prominently.” The complaints related to website adverts seen between April and May 2024, thus some of the providers will have already corrected for this.

Summary of the Rulings

➤ A24-1244734 British Telecommunications plc

➤ A24-1244738 EE Ltd

➤ A24-1244740 Plusnet plc

➤ A24-1244730 TalkTalk Telecom Ltd

➤ A24-1244736 Telefonica UK Ltd

➤ A24-1244733 Virgin Media Ltd

UPDATE 11:21am

We’ve just had a comment from altnet broadband ISP Hyperoptic, which has long campaigned for an end to mid-contract price hikes.

Lutfu Kitapci, CCO and MD of ISP at Hyperoptic, said:

“Today, the UK advertising watchdog is cracking down on marketing campaigns from telecoms companies for misleading consumers with vague pricing information. This step is exactly what we need to make the industry fairer and provide the essential transparency that customers deserve. At Hyperoptic, we believe in fairness, which is why we have offered clear and transparent pricing since day one.

Ofcom data from December 2023 revealed that 11 million broadband and 36 million mobile customers were on contracts subject to inflation-linked price rises, leaving them unable to exit without paying early termination fees if they haven’t completed the contract’s minimum term.”