Mid-contract price increases in telecoms


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Published
Nov 22nd '23
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Committee of Advertising Practice’s (CAP) new guidance on the advertising of telecoms contracts with mid-contract price increases comes into force on 15 December 2023, following a six-month grace period. It sets stricter standards on the prominence advertisers must give to important information about future price rises.

 

Don’t phone it in – here are some dos and don’ts to help you avoid getting called out:

 

  • Don’t give the impression that prices are fixed if they are not

Some mobile and broadband contracts do offer fixed monthly prices, which will not change throughout the minimum term of the contract. However, if your contract includes a tiered price rise (whether linked to inflation or not), or may be subject to price variation, then stating it is fixed is highly likely to mislead. In addition, claims like “£20 a month for 18 months” are very likely to mislead, if the price is due to rise before the 18 months is up.

 

  • Don’t rely on contradictory qualifications

…and in this case, small print stating the price rise will be unlikely to make your claim compliant – it will contradict rather than clarify.

 

  • Do make sure information about the price increase is up front and prominent

This is more likely where information flagging the increase appears at the same level of text as the monthly price claim – for example, “£20 per month until April 2024”, if that accurately reflects the time when the price rise will kick in.

 

Information about the details of the price is more likely to be in line with the guidance where it is no lower than one ‘step’ below the price itself – for example, if it is in the heading, then the price increase information would be in the sub-heading. Linking to information more than one step below the price claim using an asterisk is unlikely to give it sufficient prominence in this case.

 

  • Do make sure that references to inflation are clear and simple to understand.

This is more likely when terms such as “Retail Price Index” are written out in full the first time they appear and followed by “rate of inflation”.

 

  • Do make sure that you include the full future price the consumer will pay, once it is known, in pounds and pence

With inflation-linked increases, once the rate that the price rise will be based on is published, advertisers should ensure the actual price consumers will pay is reflected in their advertising in a timely manner.

 

  • Do make clear if terminating a variable contract will have knock-on effects for other linked services

Where a contract includes the right for the provider to raise the price during the contract at their discretion, the customer has the right to exit without paying a penalty. Where mobile or broadband contracts with this characteristic are sold together with other services, such as content streaming or device payment, terminating a variable contract might have implications for the status of those other products. Consumers should be made aware of this as it may also be material to their decision to choose a particular product package.

 

Read the full guidance here.

 

Source: CAP

 

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