Telecoms firms have been told they should stop advertising broadband as "free" if it comes with a hefty price tag for line rental attached, under tighter rules being brought in to ensure companies aren't "confusing and misleading" customers about the true cost of deals.

The Advertising Standards Authority (ASA) says from 30 May companies will likely to be breaking its rules if they separate broadband costs from line rental costs when advertising products.

Currently broadband is often promoted as "free" despite users being forced to sign up to a costly line rental package in order to get the deal.

MoneySavingExpert has long campaigned for greater clarity on broadband prices, and when we cover broadband deals we always factor in all related costs to the overall price – see the Cheap Broadband guide for our current top picks.

Today's announcement comes after joint research by the ASA and industry regulator Ofcom found that ads currently screening for fixed broadband are likely to confuse customers over a deal's actual cost.

The study found 81% of viewers were unable to correctly work out the total cost of a broadband contract, and 22% were still unable to tell the total cost after a second viewing – suggesting that around 4.3 million UK households are potentially unable to work out what they would be paying.

The ASA says the research shows the current approach typically taken by advertisers "is likely to mislead consumers and therefore, from May 30, will in all likelihood break the rules".

How will broadband be advertised?

The ASA says it remains open-minded about how pricing should be advertised in future, but it will suggest providers stop separating line rental costs and also that they give greater prominence to contract length, any post-discount pricing and upfront costs.

ASA chief executive Guy Parker says: "It's essential we make sure people aren't misled by pricing claims in broadband ads. That obviously wouldn't be good for them, nor would it benefit broadband providers, because advertising works better when it's trusted.

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

Clampdown on 'misleading' broadband ads which don't factor in line rental costs
Clampdown on 'misleading' broadband ads which don't factor in line rental costs

What do the providers say?

A spokesperson for TalkTalk said the company "absolutely supports" the ASA's findings.

She added: "We've already called on Ofcom to bring in all-in pricing. 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. 

“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. We want Ofcom to be bold and tackle this problem in their strategic review and we would absolutely support them in doing so.”

Additional reporting by the Press Association.

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