Mobile networks and broadband ads which which do not clearly show future price rises risk having their ads banned from December under new rules by the Advertising Standards Authority Code Advertising Practise.
Many providers have contract clauses that annually increase monthly costs based based on inflation plus an additional percentage.
“That means the initial price consumers are paying will go up in future by an unknown amount. Sometimes this is only a few months from when they take out the contract, depending on the time of year –and often more than once. It is therefore crucial that information about the future price increase is clear to consumers in the ad itself, to avoid creating a misleading impression that the initial stated price will remain the same throughout the contract period.” said the ASA.
Other contracts include clauses that allow providers to raise the price during the contract at their discretion.
“In those cases the customer has the right to exit without paying a penalty fee, however it is still important for them to be aware of the possibility when selecting a contract. Where mobile or broadband contracts with this characteristic are sold together with other services, such as content streaming or device payment, terminating a variable contract might have implications for the status of those other products. Consumers should be made aware of this as it may also be material to their decision to choose a particular product package”.
The guidance makes clear that ads should carry details of what the increase will be based on featured prominently relative to the advertiised price. Inflation terminology must clear and simple to understand and include the full amount the consumer will pay after the increase,They make clear where terminating a variable contract due to a price increase will impact other linked services.
Providers have until December 15 to ensure their ads confirm to the new CAP guidance.
