Ads Watchdog Updates UK Guidance on Mid-Contract Broadband Price Hikes

The UK Advertising Standards Authority (ASA) has today updated their guidance for how broadband ISPs, phone, pay TV and mobile operators should communicate mid-contract prices hikes to consumers. The change is primarily intended to align their policy with Ofcom’s imminent ban on mid-contract price hikes that are linked to inflation and percentage changes.

Just to recap. The ASA introduced its original guidance (here), which was intended to help make sure that providers made their policies on mid-contract price hikes clearer and more transparent, back in mid-2023. At the time, it was still normal for providers to use confusing annual inflation-linked (CPI/RPI) price hikes that were often expressed using percentages, which many people tended to find confusing.

The original guidance recently resulted in several adverts from BT, EE, Plusnet, TalkTalk, O2 and Virgin Media being banned after they were found to have breached the ASA’s guidance (here). This occurred because the way they all presented their annual mid-contract price hikes was found to be “misleading“.

Since then, Ofcom has effectively moved to ban providers from doing mid-contract price hikes that are linked to inflation and percentage changes (here), which is due to be enforced from 17th January 2025. Instead, wherever telecoms or pay TV providers apply in-contract price rises, they must now “set these out clearly and up-front, in pounds and pence, when a customer signs up“.

In response, the ASA yesterday published updated guidance, which is designed to reflect Ofcom’s change and remove references to the old inflation policies etc.

ASA Statement

The guidance already provided that if the amount by which the customer’s monthly contract price would increase was known in advance, then it should be stated in full. The proposed amendments clarify that the full future monthly price and when it will rise are likely to constitute material information that the consumer needs to make an informed transactional decision. Because the means to calculate the future price will always be known in advance, percentage-based presentations of the price are unlikely to be sufficient to avoid misleading the consumer.

The prominence principles set out in the guidance remain the same. In short, ads for telecoms contracts that include (or have the potential to include) a mid-contract price rise are less likely to mislead if:

➤ Information indicating the presence or (in the case of variable contract) possibility of a price rise has equal prominence with the initial price claim

➤ Information on the nature of the price rise (the full future price in pounds and pence) is prominently featured within the main ad copy – no lower than one ‘step’ below the initial price claim

Several other changes have been made to remove references to inflation-linked increases that will no longer be relevant and to contextualise the guidance in relation to the Ofcom rule changes.

The guidance refers to underpinning law in the form of the Consumer Protection from Unfair Trading Regulations 2008 (the CPRs). This legislation will be replaced from April 2025 by the Digital Markets, Competition and Consumer Act 2024. However, this will not affect the content of this guidance.

The amended guidance is naturally timed to take effect on 17th January 2025. The main principles under the amended text are as follows.

Updated Guidance principles

➤ An ad is more likely to comply when advertisers 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, wording such as ‘fixed’ or ‘£X for X months’ is likely to mislead if the price is due to rise before the end of the minimum term. Subsequent information detailing the mid-contract price increase is likely to contradict rather than qualify a claim that implies the price applies for the full contract.

➤ An ad is more likely to comply when information indicating the presence or possibility of a price rise has equal prominence with the initial price claim.

➤ An ad is more likely to comply when the future price statement is featured prominently within the main copy of the ad. Specifically:

• In static-format ads, no lower than one ‘step’ on the qualifications ladder (see Guidance on the use of qualifications) below the information signalling the price increase.

• In TV or video ads, within the main copy, rather than in superimposed text.

The following approaches are unlikely to give adequate weight to the significance of this material information:

• an asterisk linking to information more than one ‘step’ below the price claim

• a link that has to be clicked on or hovered over with a cursor in order to access the information

• in a radio ad, featuring the information only in the terms and conditions that follow the main copy

If the minimum contract term is greater than 12 months and therefore there will be more than one tiered increase, the ad should make that clear.

➤ Ads are more likely to comply when advertisers are mindful of the time of year when the ad is being published, relative to the timing of any compulsory annual increase, to avoid misleading consumers. In particular:

• Ads are less likely to mislead if consumers will be charged the monthly price stated in the ad at least once before the upcoming increase is applied.

➤ An ad is more likely to comply when advertisers make clear when a price rise applies to only one element of the contract.

➤ Where a variable telecoms contract is linked to another product (for example, another telecoms contract, a device finance plan, or a TV or other content subscription service), exiting the variable contract following a price increase may affect the status of the other product.

Where applicable, ads should make clear that if consumers exit the contract for the variable product due to a price rise:

• They will lose a linked product;
• The price of a linked product will increase; and/or
• They will incur charges as a result of terminating a linked product

➤ For ads for variable contracts, where a product listing is included on a webpage with multiple other listings, then it may be sufficient to link each price statement to one or more qualifications providing further information, further down the page – provided the qualification is sufficiently prominent and visible at all times without having to scroll down the page.