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ASA Tightens Rules on Telco Mid-Contract Price Changes

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Starting immediately, the Advertising Standards Authority (ASA) has pledged to enforce more stringent guidelines on mid-contract price changes in the telco industry. This move arrived following a six-month grace period which took effect in June.

The enforcement of these new rules heightens the responsibility of the operators when it comes to advertising potential future price fluctuations. The core of these rules emphasize that operators should not give the impression of fixed prices when there are potential fluctuations in the cost.

Hence, the operators should ensure that the information about possible price increases is clearly shown in the foreground. As it stands, operators often advertise contracts in a fashion that understates the possibilities of a price hike. For instance, a typical advertisement may read ‘£30 per month for 18 months’ leaving the consumer uninformed about the potential of this amount being subject to amendment within this period.

This confusion is furthered by disorienting statements frequently embedded in the fine print, causing misunderstanding rather than clarity. This is recognized by the ASA as a concern requiring attention.

The ASA further states that for broadband and mobile contracts with anticipated price rises, the providers must clearly indicate these changes to consumers. It’s worth noting that most broadband and mobile providers make annual price adjustments up to 4%, often adding an inflation-based measurement such as the Consumer Price Index (CPI) or the Retail Price Index (RPI). Often these indices are least understood by customers, resulting in misleading communication passed to consumers through fine print in contracts.

Adding fuel to the fire, uninformed consumers get hit by a secondary financial blow when they attempt to exit the contract prematurely due to unexpected price changes.

Earlier in the year, a regulatory body known as OFCOM investigated the clarity of mid-contract price changes. The findings disclosed that over one-third of consumers surveyed were unclear about their provider’s stance on this issue.

Falling under the broadcasting regulations in the UK, Ofcom serves as a co-regulator for broadcast advertisements and communication regulations. If a company fails to adhere to ASA guidelines, Ofcom is authorised to take legal action.

This news is an essential development for all industry stakeholders, from pioneers to early technology adopters, and everyone needs to stay updated in these rapidly evolving sectors.
Also, conversely exciting is Broadcom finalising the VMware acquisition deal, launching an ultra-modern submarine cable infrastructure in the Cayman Islands, and Navigating the Optical fibre frontier in Europe and beyond.

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