CAP and BCAP are today publishing an updated version of their existing guidance on the presentation of mid-contract price increases in telecoms ads. Amendments have been made to reflect changes to Ofcom rules that will have the effect of banning inflation-linked and percentage-based price increases in new contracts from 17 January 2025. The amended CAP and BCAP guidance will also come into force from that date.

Amendments to Ofcom's General Conditions[1], introduced in July 2024 require providers to set out at the point of sale what the changed monthly price of a contract will be, if it is to change during the commitment period, and from when the changed price will apply, in pounds and pence. In effect, this change to Ofcom's rules prohibits providers from offering contracts that provide for inflation-linked price rises, or price rises set out in percentage terms, to the monthly price during the contract period.

The CAP and BCAP guidance on presentation of mid-contract price increases in telecoms contracts sets out that information about the presence and nature of a mid-contract price rise should be clear and prominent to avoid misleading consumers. The guidance was originally written in a context in which the market featured many contracts that included a set percentage-based increase, plus an inflation-linked increase that could only be calculated shortly prior to the increase taking effect.

The guidance already provided that if the amount by which the customer’s monthly contract price would increase was known in advance, then it should be stated in full. The proposed amendments clarify that the full future monthly price and when it will rise are likely to constitute material information that the consumer needs to make an informed transactional decision. Because the means to calculate the future price will always be known in advance, percentage-based presentations of the price are unlikely to be sufficient to avoid misleading the consumer.

The prominence principles set out in the guidance remain the same. In short, ads for telecoms contracts that include (or have the potential to include) a mid-contract price rise are less likely to mislead if:

• Information indicating the presence or (in the case of variable contract) possibility of a price rise has equal prominence with the initial price claim
• Information on the nature of the price rise (the full future price in pounds and pence) is prominently featured within the main ad copy – no lower than one ‘step’ below the initial price claim

Several other changes have been made to remove references to inflation-linked increases that will no longer be relevant and to contextualise the guidance in relation to the Ofcom rule changes.

The guidance refers to underpinning law in the form of the Consumer Protection from Unfair Trading Regulations 2008 (the CPRs). This legislation will be replaced from April 2025 by the Digital Markets, Competition and Consumer Act 2024. However, this will not affect the content of this guidance. For more information about what the ASA system is doing to amend the advertising rules in line with the new legislation, please see here.

The amended guidance will take effect on 17 January 2025, accessible here. It will replace the version of the guidance found here from that date.

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