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CAB accuse broadband providers of making money from false promises
Wednesday 22 July 2015 13:19:01 by Andrew Ferguson

Broadband advertising is once more back in the bright white light of transparency as Citizens Advice is trying to highlight the extra costs that need to be added when people see adverts suggesting broadband is free or at an amazingly low price.

"Hidden charges such as line rental, starter fees for a new contract and delivery costs mean on average monthly costs are over three times the initial price advertised.

Citizens Advice finds people are still paying as much as £20 more a month for their broadband package than advertised, even after factoring in the average monthly costs once promotional rates end, usually after six or 12 months of low cost broadband.

Citizens Advice analysed adverts from the six main broadband providers over the promotional period broadband was advertised as costing from zero up to £20 per month. But the full cost ranged from £20 to £45 per month.

Line rental can add as much as £16.99 to the advertised monthly fee, making it the most expensive additional cost.

Extract from CAB release

Our regular readers will probably be very aware of the bundles that require voice line rental to be added to any broadband price offer and certainly we do our best to always include the voice line rental requirement in any of the offers we highlight and our package listings that are vastly more extensive than the majority of sites trying to sell you broadband.

The prominence of voice line rental costs appears to have increased in areas like TV adverts and when we have seen some new entrants try to take a moral high ground and roll in the price after a few months they often seem to adopt the same approach as everyone else.

So while the CAB calling for transparent pricing and new rules from the ASA it may on one hand simplify things but on the other may introduce new problems and might undermine the ability for savvy consumers to chase the best deals.

TalkTalk is held up as a good example with the scrapping of voice line rental in its York FTTP roll-out, but the overall price is actually no lower. Relish is an interesting one, as they provide no voice service since they are a 4G LTE provider, but other issues such as CGNAT on the consumer service are not highlighted. Relish does not appear to list upload speeds for its packages, but one of the 25% of tests that exceed the up to 50 Mbps advertised speed in the last year shows uploads of 6.2 Mbps around the Shoreditch/Old Street area where everyone complains about BT speeds. Relish mean download for Q2/2015 was 14.1 Mbps (upload 2.1 Mbps - download speed for the fastest top 10% in the quarter started at 47.4 Mbps).

"Many providers deliberately confuse consumers, using jargon to win their custom and offering ‘free services’ that disguise hidden costs and charges for routers and delivery - on top of this, customers are forced to pay a monthly line rental fee of up to £16.99 for a service that most people do not want or need. These costs are rarely included by price comparison round–ups, so when it comes to the true cost of their broadband, people are being left in the dark.

There is a clear and intentional lack of transparency in the broadband industry and this needs to change, starting with advertising that clearly explains the monthly costs and lengthy contracts associated with broadband packages. At Relish, we’re concerned that this ambiguity is breeding severe distrust in Internet Service Providers, similar to what we’ve seen with utility services and banks."

Will Harnden, Chief Marketing Officer at Relish

Our advice is to always to and check the full product basket as this usually lists every cost including things like a router P&P charge and is how we verify some of the more complex bundles when editing our listings, it is also worthwhile keeping a copy of the page either printed or a screenshot for comparison with any bills you get.

Any rules to force providers and package listings to roll voice line rental into the broadband price may sound good, but as some providers still allow you a choice of voice line rental provider there will be on-going confusion as to what price you pay, and marketing people always trying to steal a lead on the competitor will find new ways to bend the rules.

One irony is that the new Ofcom migration rules that stop a losing provider doing any retention marketing means that people who may be easily mislead by shiny deals will not have an existing provider calling to ask why a customer is moving and what deal they are getting and sometimes highlighting a cost that the customer may not have noticed when handing over their payment details.

Comments

Posted by chilting about 1 year ago
What ever happened to the principal of caveat emptor.
Posted by zhango about 1 year ago
BT offer £10/month for 12 months but don't make it obvious what the charge is after that - perhaps they should?
Posted by philipd about 1 year ago
It should be against advertising rules (surely it already is) to advertise a product at a price you can't actually buy it for without compulsory extras! The question to check if a company complies is "Can a person actually buy said product or service for the price advertised?". All these offers for broadband the answer is no. In addition the normal price after any introductory offer must be given equal prominence to any special offer price on any advert. Anything else is just misleading, the reason they do it of course!
Posted by ayeomans about 1 year ago
It's even worse than that. Here's an extract from my penultimate bill from Sky.

02/05/2014 - 01/06/2014 Supplement for not having Sky Talk £5.00
15/04/2014 - 01/05/2014 Supplement for not having Sky Talk £2.83
15/04/2014 - 01/05/2014 Supplement for not having Sky TV £1.42
02/05/2014 - 01/06/2014 Supplement for not having Sky TV £2.50

That's right, pay extra for *NOT* receiving a service.

To add insult to injury when I transferred, they needed to be nagged to refund my final overpayment.
Posted by comnut about 1 year ago
Also what about 'locked into a contract' ??

If you have VERY limited cashflow, and your cheque is late, this could mean ISPs penalising you for non-payment, meaning you have EVEN LESS cash!! :( :(
It is actually easier to use a Mobile phone pay as you go contract, to get the very small bit of internet you need, and NO problem is you run out of cash!! :)

How about it, BT etc, a PROPER payg land line BB???
Posted by andrew (Favicon staff member) about 1 year ago
A firm tried that with payg usage allowances and they vanished

One month contract options are available in the marketplace though
Posted by zhango about 1 year ago
Freeola website still shows dial-up internet access. Does that still work?
Posted by andrew (Favicon staff member) about 1 year ago
Dial-up will still work, i.e. some providers still offer it
Posted by jrawle about 1 year ago
They should only be able to show headline prices for which you can actually receive a product. If the ISP's line rental is compulsory, they shouldn't show prices without it (e.g. Virgin). If there's a supplement for not taking their line rental or TV, the headline prices must show this higher price (e.g. Sky). But if you can take just broadband at the price shown, but need to provide your own phoneline, it's not unreasonable to advertise that, as long as it says "Phone line required" or similar.
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