ASA Adjudication on Vonage Ltd

Ad

A TV ad for a telecoms service showed images of a boy throwing a paper plane and a man releasing birds from a cage as a voiceover stated "Change your home phone company ... Why? You want freedom of choice. Not a long term contract. You want a great range of call features". The ad then showed images of marbles falling from hands, a couple kissing and a weathervane as the voiceover continued "You want to call - day or night - for as long as you like. So, demand more from your home phone ... choose Vonage on 0808 xxx xxxx". The ad showed a woman on the phone and an image of a revolving globe, as the voiceover stated "There are no tie-ins, just unlimited calls to the UK and countries like the USA, Australia and Spain for just £7.99 a month". On-screen text stated "Ethernet modem required. Adapter included. Terms and Conditions apply. UK landlines starting with 01, 02 & 03. Excludes non-geographical numbers. Unlimited international landline calls. £18.98 start up fee. Disconnection fee applies in first year. See website for full details".

Issue

One viewer challenged whether the on-screen text that stated "disconnection fee applies", contradicted the voiceover claim that "there are no tie-ins".

BCAP TV Code

Response

Vonage Ltd (Vonage) said, unlike the other mainstream telecommunications providers with whom they competed, they provided a service on rolling 30 day billing cycles. They explained that, during the first 30 days, customers were permitted to trial the service and seek a full refund if they were not satisfied with the service for any reason. They explained that, thereafter, customers were only committed to rolling 30 day billing cycles, with no fixed-term renewable tie-ins, and were free to cancel their service at any time. Vonage said that was in contrast to other telecommunications providers, who tied their customers into lengthy fixed-term contracts.

Vonage said they reserved the right to charge a disconnection fee when a customer cancelled their service within the first year. They explained that they charged a disconnection fee because they provided customers with kit to enable them to access the network. They said that piece of kit was heavily subsidised, and that their monthly tariff rate alone was not designed to subsidise the cost of the apparatus in the case of early cancellation within the first 12 months. Vonage said that full details of their tariff and disconnection fees were explained clearly to customers, both on their website and by customer service staff, before any commitment was made.

Vonage said they explained the details of their tariff to Clearcast, and that together the decision was taken to add the on-screen text "disconnection fee applies" in order to be fully transparent.

Clearcast said they believed the terms "no tie-ins" and "disconnection fee applies" related to two different aspects of the terms and conditions offer by Vonage for their internet phone service. Clearcast explained that the "no tie-ins" element referred to the contractual term, which could be cancelled at any time. They said that was distinct from the "disconnection fee may apply", which was a fee levied in the first 12 months if a customer wished to leave Vonage, in order to cover the cost of the subsidised hardware supplied to customers at the start of the service.

Clearcast said they included the on-screen text "disconnection fee applies" in order to clarify for the viewer that, while there were no long-term contracts, a fee for hardware may apply should the person cancel their contract with Vonage.

Assessment

Upheld

The ASA noted Vonage's and Clearcast's argument that the disconnection fee was levied to cover the cost of the subsidised hardware supplied to the consumer, and was distinct from the "no tie-ins" claim, which referred to the fact that there was no fixed-term contract. We acknowledged that it was possible to use Vonage's service on a month to month basis without the need to sign up to a minimum-term contract. We considered, however, that the claim "no tie-ins" implied that consumers would be able to cancel the advertised service at any time without obligation. We also considered that the £23.99 fee for disconnection during the first 12 months, which was equivalent to three months charge for the service, was a significant obligation. Although we noted that on-screen text stated "disconnection fee applies in first year", we concluded that in this instance the on-screen text contradicted rather than clarified the "no tie-ins" claim.

The ad breached CAP (Broadcast) TV Advertising Standards Code rule 5.1(Misleading advertising).

Action

The ad must not be broadcast again in its current form.

Adjudication of the ASA Council (Broadcast)