Broadband providers 'cashing in on false promises'

Price promises made by broadband providers are misleading customers and costing them up to six and a half times more than adverts imply, reveals Citizens Advice.

New research from the national charity finds that many broadband adverts draw 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.

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.

One offer for broadband at £9.95 for 6 months, worked out as £35.79 per month, once installation fees and line rental were factored in - over £25 more than advertised. Over the duration of the contract the customer will have paid £465 more than the advert suggest

Citizens Advice is highlighting how misleading broadband adverts can make it harder for consumers to shop around to get the best deal.  The consumer charity is calling on broadband providers to be upfront about the price consumers will actually pay, and is asking the Advertising Standards Authority to introduce new rules ensuring broadband deals are transparent.

Gillian Guy, Chief Executive of Citizens Advice, said:

“Broadband providers are cashing in on false promises. With some people paying up to six and a half times more a month for broadband than advertised, customers are being sold one thing and charged another.

“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.”

Citizens Advice finds 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. and is only available in that area.

• Virgin media also offer an ‘all in’ price in some areas.

Citizens Advice believes price comparison websites also have a part to play in helping people understand the true cost of broadband deals. While some already compare the actual costs of the broadband contract - including line rental - others focus on the more the misleading headline prices, provided by broadband providers, meaning ‘all in’ packages fall to the bottom of the list.

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Notes to editors

To calculate the price a consumer would pay we take the approach of an informed but non-expert consumer, drawing the information from the broadband providers' promotions. We choose the simplest broadband option available and calculated what this costs, first under the headline price advertised and, second, once fees from the small print are included. We then compare these two prices.  The analysis only looks at broadband deals, so does not include bundles, which means cheaper options may be available from suppliers.

The table below shows the different broadband from the six main internet providers and Relish, which were advertised on 13th July 2015.    

*PlusNet Unlimited Broadband is provided as a 'broadband only' option allowing a consumer to bring their own line rental from another provider. For simplicity, to represent the total cost paid by the consumer we have taken an assumed line rental price from PlusNet themselves. In practice the total price could vary depending on the cost of line rental with the consumer's other provider.

1. The small print in the table only relates to the promotion on the internet provider's website. It does not include other charges which can be found in terms and conditions which can be found elsewhere. These are different for each advert but are likely to include activation fees, delivery costs and line rental.

2. EE Standard broadband cost 656% more than the advertised price of £2.95 a month. This was down to line rental which cost line rental which cost £19.35

3. The figures in the research were found by going to the six main broadband providers' websites (BT, Virginmedia, EE, Plusnet, Sky and TalkTalk) and analyzing their most prominently displayed tariff/offers. Bundled tariffs, which offer additional services such as TV or mobile, were excluded from the analysis

4. TalkTalk deal includes £75 voucher which 'are exclusive to new customers who order online, switch from BT, Sky or Plus.net and keep their existing landline number.' Citizens Advice have excluded them from this analysis because they are not available to all consumers.

5. The Citizens Advice service comprises a network of local Citizens Advice, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
6. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
7. To get advice online or find your local bureau in England and Wales, visit citizensadvice.org.uk
8. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.
9. Local Citizens Advice in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full service statistics see our publication Advice trends.
10. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 2,500 service outlets across England and Wales.