BT, EE, Plusnet, TalkTalk, O2 and Virgin ‘misled’ customers over price hikes

The advertising watchdog has ruled against six of the UK’s biggest broadband providers after they all failed to make mid-contract price increases clear to consumers.

The Advertising Standards Authority (ASA) said that BT, EE, Plusnet, TalkTalk, O2 and Virgin Media Broadband misled consumers by placing important information about price rises separately to headline prices and in areas of less prominence on their websites.

The ASA ruled the ads must not appear again and told all six providers to ensure they make sufficiently clear that their broadband contracts would be subject to mid-contract price increases, and that information about the nature of such rises is presented prominently.

The rulings are part of wider work by the regulator on mid-contract price rises and follows guidance for firms that sets stricter standards on the prominence advertisers must give to important information about future increases.

The new advertising guidance, which came into force in December after a six-month grace period, advises that information about any price increase should be “up front and prominent”, and that the full future price the consumer will pay should be included in pounds and pence.

Many of the biggest broadband firms raise monthly bills every April during the term of contracts in line with the Consumer Price Index (CPI) or the Retail Price Index (RPI) plus an additional set amount of around 3% to combat rising business costs.

This usually means a price increase of about 4% to 5% each year, regardless of the original cost of the deal. However, since the inflation rate is still stabilising after a 30-year high in 2023, price hikes remain higher than normal.

As a result, many providers raised prices by up to 7.9% in April. Virgin Media increased its prices by 8.8%.

Customers wanting to avoid these hikes can be charged punitive exit fees to leave their contract early.

However, this is set to change from next year after Ofcom banned broadband providers from linking their annual price hikes to inflation, meaning new customers may start to see a fixed yearly increase when they are signing up instead.