The UK advertising watchdog has cracked down on marketing campaigns by telecoms companies including BT, EE, Virgin Media and O2 for misleading consumers about price rises added to their bills during their contracts.
The Advertising Standards Authority (ASA) has issued a batch of rulings against ads run by BT, its subsidiaries EE and Plusnet, as well as TalkTalk, O2 and Virgin Media broadband.
In each case, ad campaigns run by the telecoms companies have fallen foul of new guidance added to the UK advertising code, implemented in December to help curb “greedflation” in the sector.
The guidance sets stricter rules on the prominence that must be given to important information about future price rises when customers sign up.
The ASA ruled that the ads must not appear again and told all six providers to ensure they make sufficiently clear that broadband contracts would be subject to mid-contract price increases, and that information about the nature of such rises is presented prominently.
The ad watchdog launched the crackdown after the media regulator, Ofcom, moved in January to ban the widespread practice of broadband and mobile operators implementing mid-contract price rises linked to inflation to consumers’ bills without them being aware.
Research by the consumer group Which? estimates that telecoms firms will generate £488m from mid-contract price rises in 2024.
Telecoms companies have moved to stop the practice, which is not allowed in other utility sectors such as electricity and gas. However, the UK ad watchdog has found that they are still not being clear and upfront about real “pounds and pence” changes to bills.
“All of the companies have fallen foul of guidance that sets stricter standards on the prominence advertisers must give to important information about future price rises,” said the ASA.
“Marketers are required to ensure that advertising for services that include mid-contract price increases … is presented clearly and prominently. The guidance also states that asterisks or links, which linked to information more than one ‘step’ below the price claim, were unlikely to give adequate weight to the significance of material information. We concluded that the ads are likely to mislead.”
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Most mobile and broadband companies added mid-contract price increase clauses in 2021, at a time when inflation was running at only 1.5%.
However, the surge in inflation to a 41-year high in October 2022 caused a significant impact on household finances amid the cost of living crisis, prompting the media regulator and ad watchdog to crack down on the practice.