Price promises made by broadband providers are misleading customers and costing them up to six and a half times more than adverts imply, new research from Citizens Advice reveals.
The charity looked at broadband adverts from seven major internet providers – BT, EE, Plusnet, Relish, Sky, TalkTalk and Virgin Media – and found that some are drawing people in with attractive discounted 'teaser deals', which last for a limited period, and mask the real long-term costs.
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. See our Cheap Broadband guide for the best deals.
One offer for broadband at £9.95 for six months for example, worked out as £35.79 per month, once installation fees and line rental were factored in – over £25 more than advertised. Citizens Advice says this means that over the duration of the contract, customers will have paid £465 more than the advert suggests.
The charity is now calling on both broadband providers and price comparison sites to be upfront about the price consumers will actually pay, and is asking the Advertising Standards Agency to introduce new rules ensuring broadband deals are transparent.
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'The word simplicity is missing from their vocabulary'
Guy Anker, managing editor at MoneySavingExpert.com, says: "Broadband providers have turned the market into a confusing minefield of difficult-to-deduce deals – the word simplicity is seemingly missing from their vocabulary.
"The biggest crime is marketing deals as 'free' when they're anything but. Quite often, an ad screams 'free broadband' when in the rather important small print it states you also need to get its costly line rental, so it's not free.
"Then there are firms that trap customers into pricey deals by having a 12-month contract for either the line rental or broadband and an 18-month contract for the other. That gives them the six months after the year-long deal is up to raise prices, yet the customer is still forced to stick with it due to the longer 18-month contract."
'Some firms starting to accept prices need to be clearer'
But Citizens Advice says some providers are making efforts to improve their advertising:
- Relish, a newcomer to the industry, offers customers a clear 'all in' price. It runs on 4G which means there are no line rental costs.
- TalkTalk recently announced it was scrapping line rental fees for its own broadband network, offering customers in York an ultrafast connection at a single "all-in" price. This doesn't however include other charges, such as delivery costs, and is only available in York.
- Virgin Media also offers an "all in" price in some areas.
Gillian Guy, chief executive of Citizens Advice, says: "Confusing teaser rates and hidden costs make it difficult to work out whether you're getting a good deal. Internet providers need to be upfront about broadband costs, ensuring adverts are transparent and people know what they're signing up to.
"Some broadband firms are starting to accept that prices need to be clearer. Now the whole industry needs to up its game – and the Advertising Standards Authority should help by setting new, clear rules."