TalkTalk – the Salford-based telephone company with more than four million broadband customers – has been ticked by the UK’s Advertising Standards Authority (ASA) following nine separate complaints about misleading advertising.
Initial objections focus on two advertisements – on TV and email – that aired in early 2020 that spoke of a 24-month broadband offer that was “fixed until 2022” or promised “no increase to mid-contract “.
The ASA intervened when the plaintiffs signaled that the price of their broadband plans would “increase during the term of the fixed contract” despite assurances given in the announcement.
Following its investigation, the ASA sided with concerns that the ads were “misleading” and banned them.
“We told TalkTalk Telecom Ltd not to pretend the prices were ‘fixed’ or that there wouldn’t be a mid-contract price increase if that wasn’t the case,” said the advertising watchdog today.
While this may be seen by some as another criticism of the ASA, the decision has broader implications.
The ASA based its decision on guidance issued by the telecommunications regulator Ofcom on “price increase at mid-contract. “
“He made it clear that if a communications provider wished to increase the price (or prices) of the basic monthly subscription agreed by the customer at the point of sale, Ofcom was likely to view it as a materially prejudicial contract.” , explained the ASA.
As such, any change would require the client “to be given at least one month’s written notice of the increase and the right to terminate their contract without penalty,” he said.
This customer protection is important because the rapid deployment of full fiber is likely to result in a substantial churn rate among consumers as they search for the best deals available. And anything that could impede competition in the communications market is unlikely to be well received by consumers or regulators.
Just yesterday, Ofcom unveiled plans to make it easier to switch between broadband providers despite a number of concerns raised by some service providers.
In its defense, TalkTalk told the ASA that it viewed the COVID-19 pandemic as an “exceptional” case and that the pricing “under their plans was based on a certain level of use and incremental usage, but not to the extent that this usage increased during the deadlocks. “
He further told the ASA that he “did not believe consumers expected to pay a fixed price for the level of use observed during the shutdowns.”
No one from TalkTalk was available to comment on the Reg on today’s decision. They were also not on hand to comment on their deal with the Department for Work and Pensions (DWP) to offer free broadband to people looking for work.
The voucher system gives job seekers six months of free broadband – with no contracts or credit checks – and is designed to help people looking for new jobs.
It has already been tested in Greater Manchester and Cheshire and is now being rolled out across the UK with the aim of tackling the ‘UK digital divide’.
It will be up to the DWP to identify and refer potential clients for the free service “on the basis of their need”.
TalkTalk last year agreed to a £ 1.1 billion takeover led by its second shareholder, Toscafund. ®