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Hyperoptic hits out at mid-contract broadband price hikes

UK ISP Hyperoptic says ‘big broadband providers’ are taking advantage of inflation rates to boost their revenues, and that is eroding trust in the industry.

Hyperoptic has taken a swipe at rival broadband providers, claiming new rules are required to change the way broadband plans with mid-contract price rises can be advertised, as the Committee for Advertising Practice prepares to close its consultation on the matter tomorrow.

Its CEO Dana Tobak has apparently written to the heads of Ofcom, DCMS, and the ASA and CAP to encourage emergency measures to ‘protect consumers during the cost-of-living crisis.’ Specifically, he has called for ‘an immediate requirement that advertised price claims must clearly set out any mid-contract price rises, that advertising includes a clear explanation of the calculation, and the real impact it will have on what customers are going to have to pay.’

To buff up its point, Hyperoptic commissioned a survey of 1,000 UK broadband bill payers, of which 48% said they wouldn’t have signed up for their current deal if they realised it would go up mid-contract, while 43% said the price rises risk making broadband impossible to afford during the cost-of-living crisis.

Half apparently said they felt confident about working out a percentage rise to their bill, though only 23% got the figure right when trying to calculate it. 27% just said they didn’t know or that it was too complicated, and 80% thought ‘giant internet providers’ are ‘taking advantage’ during the cost-of-living crisis.

“The big broadband providers are taking advantage of inflation rates to boost their revenues, at the expense of people already struggling to cope with the cost-of-living crisis. This behaviour is eroding trust in the industry,” said Dana Tobak, CEO of Hyperoptic. “The practice of forcing mid-contract price rises on people is causing real consumer harm, and we want to see big changes so that broadband users are better informed and protected.

“At the very least, the price you pay throughout the contract should be transparent in all advertising. We also want Government and Ofcom to go further, so that if a price increases mid-contract, you should be able to turn to a new provider without paying early termination charges.”

The consultation by the CAP and BCAP is tasked with looking at whether information about mid-contract prices ‘should be more prominently stated in telecoms ads across media, to avoid misleading consumers.’

The website states: “Telecoms contracts are often complex products, and there are a range of factors to consider in determining what is likely to constitute sufficiently prominent presentation of information about mid-contract price rises in ads for such services. Drawing on previous ASA casework in this area, CAP and BCAP are examining the issue in the round through a consultation process. While a change to the advertised price during the term of the contract would be material information under any circumstances, in the current climate, rises in the cost of living mean that such increases are likely to have an even greater impact on consumers.”

There’s the obvious element of self-interest to point out whenever a firm gets on its soapbox about something it claims its direct competitors are doing, while gently reassuring everyone it would never do any such thing itself – but that doesn’t mean they can’t simultaneously have a point.

While it’s not being alleged any broadband providers are doing anything against the current rules, it probably is a bit disingenuous to make a big show of specific pricing within your advertising which will only be relevant for a part of the contract, whether that’s because of inflation or something else.

In more general terms, some consumers will pour over the small print for any subscription service, get their calculators out and make an informed decision on what they’ll actually be paying out over a contract period, and others won’t. Whether it is fair to expect people to do so at all seems to be the point of the CAP consultation, which is presumably a precursor to some potential rule changes by the ASA.

 

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