Broadband firms face new advert rules in the UK

Broadband firms may be told to make it clearer how costs will rise after an introductory period

The UK's broadband providers have been told to expect tougher rules on how they advertise their services.

The UK's Advertising Standards Authority said it was considering the step to ensure people "aren't misled by pricing claims".

It follows a study that indicated most users could not correctly calculate bills based on the information given in a selection of broadband ads.

The ASA said it would make a final decision before June.

A lobby group representing the broadband industry has suggested more research is needed before any changes are imposed.

But one of the internet service providers has already said it supports reform.

"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," said a spokesman for TalkTalk.

"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."

The announcement comes a month after the charity Citizens Advice called on the ASA to review its code of practice because it said consumers were being misled by attractive-sounding broadband offers.

'Better when trusted'

The ASA has suggested it will call on ISPs to follow three new guidelines:

• they should stop stripping out the price of line rentals and instead give all-inclusive monthly costs

• they should give greater prominence to the length of the initial contracts, and how much more expensive the deals will get after an introductory period

• they should better flag up any additional up-front costs

"Advertising works better when it's trusted," said the ASA's chief executive Guy Parker.

"We'll now be moving quickly, working alongside broadband providers, to clarify the presentation of price information."

Many customers do not realise advertised prices often do not include the cost of a line rental

Confused consumers

The move follows a study carried out on behalf of both the ASA and the communications regulator Ofcom in June.

It involved 300 home broadband "decision makers" being shown adverts that had been made for TV, newspapers, websites and outside billboards.

The research firm Futuresight then quizzed them about their recall of the details.

Its findings suggest:

• 81% of the sample could not correctly calculate the total cost of the broadband contracts when asked to do so

• 64% of those who failed to calculate the monthly cost did not realise that line rental prices needed to be added to the advertised broadband charge

• 74% said they thought the information given about one-off and ongoing costs was unclear

"Many people are confused by complicated adverts and offers, so we welcome the ASA's plans to simplify broadband advertising," said Ofcom's chief executive Sharon White.

However, the Internet Services Providers' Association has raised concerns.

"[We] believe that more detailed research is needed to corroborate the survey findings," said Nicholas Lansman, the industry group's secretary general.

"Beyond adverts, ISPs provide clear information if consumers engage more closely with them, for example by going to their website, visiting a shop, working with comparison and consumer websites or by calling the providers.

"This has not been reflected in the survey, which is based on a small sample size with some of the reviewed adverts only being shown to eight participants."