Broadband ethernet cable
Broadband companies will have to abide by new rules when advertising prices.iStock

Broadband companies have been told to make their pricing easier to understand, after the UK advertising regulator accused suppliers of misleading customers. The Advertising Standards Authority (ASA) said consumers found it difficult to calculate the true cost of a contract, especially when taking into account hidden charges found in line rental and one-off installation costs.

New advertising rules, coming into force on 31 October, mean broadband suppliers will have to make their pricing less confusing in any adverts. This includes showing all up-front and monthly costs, as well as making clearer the contract length and post-discount pricing.

Chief executive of the ASA, Guy Parker, said: "We recognise the importance of broadband services to people's lives at work and at home. The findings of our research, and other factors we took into account, showed the way prices have been presented in broadband ads is likely to confuse and mislead customers.

"This new tougher approach has been developed to make sure consumers are not misled and get the information they need to make well-informed choices."

A survey conducted by the ASA and Ofcom, published in January, found most customers were being duped into how much broadband services actually cost. The research saw 300 participants watch typical adverts offering broadband packages before being asked a series of questions.

Less than a quarter could correctly identify the total cost per month after the first viewing of the ad – a proportion that dropped only slightly after viewing it a second time. Some 81% of participants were unable to calculate correctly the total cost of a broadband contract when asked to do so.

The ASA said: "Participants found it difficult to calculate the true cost of a contract when presented with these ads where the different elements – broadband, introductory offer, line rental, contract length and one-off costs – were presented separately and some elements given greater prominence than others."

This is not the first time broadband companies have been criticised for their advertising. In 2014, consumer group Which? called on regulators to clamp down on the way broadband firms advertise their connection speeds to customers. It said companies were promising "up to" speeds that are guaranteed for just 10% of customers.