ASA Adjudication on Npower Ltd

Ad

A national press ad for Npower, that appeared on 10 March, was headlined “npower cheaper than British Gas". Text stated "We’re dropping our gas prices, so that npower’s standard gas will soon be cheaper than British Gas’s for the average Direct Debit customer". A footnote stated: “Based on average annual consumption figures of 20,500kWh of mains gas, paid by Direct Debit. Excludes customers who are on an Independent Gas Transporter’s Network. All prices are effective from 26/03/10 and are correct as at 9/03/10. Domestic customers only. Terms and conditions apply. See npower.com for full details.”

Issue

British Gas (BG) thought the ad was misleading, because:

1. it implied the price drop had already taken place or was imminent, whereas it would happen 16 days from the date the ad appeared;

2. the basis on which the price comparison had been made was unclear; and

3. the price comparison was unfair.

CAP Code (Edition 11)

Response

1. Npower disagreed with BG that the ad gave an overall impression that their price drop had already taken place or was imminent. They believed the body copy "Were dropping our gas prices, so that npowers standard gas will soon be cheaper than British Gass for the average Direct Debit customer" made the situation clear and was further clarified by the footnote. They pointed out that the ad did not state "npower is now cheaper than British Gas", which they thought would have been misleading, because Npower's prices were not lower than BG's on the date the ad was published. They believed the complainants, who had argued that the ad used the present tense to imply the price comparison was correct on the date the ad was published, instead of some time in the future, were inappropriately drawing out certain words and reading them in isolation, instead of reading them in conjunction with other words in the ad which provided the clarity required.

Npower disagreed with BG's suggestion that the headline and body copy implied the price drop had already taken place or was imminent and were therefore contradicted by the footnote, which stated that the price drop was effective from 26 March 2010. Npower argued that the footnote clarified the body copy and did not contradict it. It was not necessary to rely on the footnote for the knowledge that Npower would be cheaper than BG at some later date, because that was clearly stated in the body copy. They believed it was also unnecessary to link the body text to the footnote in order to flag the date the price drop would become effective to readers.

Npower also disagreed with BG's argument that the footnote's statement "prices ... are correct as at 9/03/10" caused confusion by suggesting the reduced prices were in place on 9 March. Npower argued that statement clarified that the contents of the ad were based on information known as at 9 March. The footnote distinguished between the date the new prices became effective (26 March) and the date when the prices were known to be correct (9 March); the latter date was the day before the ad was published.

2. & 3. Npower said it was clear that the ad was comparing Npower's prices, which were known on 9 March and which would become effective on 26 March, with those of BG, known and effective on 9 March. They stated that Npower's standard gas was indeed cheaper than BG's for the average Direct Debit customer on 26 March and was still cheaper in mid May. They said any customer signing a contract with Npower in response to the ad would have paid Npower's new lower gas prices from the commencement of their supply and would not have experienced any interim higher priced period of supply. They said it was important to note that no one other than BG had raised a complaint against the ad, which they believed supported their view that readers did not find it misleading.

Assessment

1. Not upheld

The ASA considered the headline claim "npower cheaper than British Gas" was immediately qualified by body copy text, which made clear that Npowers standard gas would soon be cheaper than BGs for the average Direct Debit customer. The footnote clarified the message further by stating the date on which Npower's standard gas would be cheaper. We considered consumers were unlikely to infer from the ad that the price drop had already taken place. Although they would infer from the headline in conjunction with the body copy that the price drop would take place soon (as opposed to imminently), they were unlikely to find the information in the footnote that it was scheduled for 16 days from the date of the ad's appearance a contradiction.

We considered the footnote's statement "All prices are effective from 26/03/10 and are correct as at 9/03/10" was not confusing and would be interpreted to mean that the price drop would take effect on 26 March and all the price information in the ad was correct as at 9 March. We thought the footnote was unlikely to suggest that the lower prices were already in place on 9 March. We considered that the ad's message about the timing of the price drop was clear, adequately qualified and not contradictory. We concluded that the ad was unlikely to mislead on this point.

On this point, we investigated the ad under CAP Code clauses 7.1 (Truthfulness), 18.1 and 18.3 (Comparisons with identified competitors and/or their products) but did not find it in breach.

2. Not upheld

The complainants had argued that it was unclear whether Npower were comparing their future prices against BG's current prices or BG's future prices. We considered that readers were likely to infer that Npower were comparing their future prices with what they understood their competitor's future prices would be on 26 March, and that was indeed what Npower were doing. We considered that the basis on which the price comparison had been made was therefore likely to be clear.

On this point, we investigated the ad under CAP Code clauses 7.1 (Truthfulness), 18.1 and 18.3 (Comparisons with identified competitors and/or their products) but did not find it in breach.

3. Upheld

Although the basis on which the price comparison had been made was likely to be clear, and we understood Npower had used their competitor's most up-to-date prices as the basis of the comparison at the time the ad was published, we considered the comparison was nevertheless problematic, because Npower had no means of knowing what prices BG would charge in the future. We also considered that consumers were likely to interpret the ad as making a promise that Npower would be cheaper than BG for the average Direct Debit customer from 26 March. Although fortuitously it transpired that the claim proved to be correct, it could equally have proved to be incorrect, because Npower were making claims about circumstances over which they had no control. We considered that at the time of the ad's appearance, Npower were making a claim they could not substantiate, because they had no way of knowing what BG would be charging a couple of weeks in the future. We concluded that the price comparison was unfair.

On this point, the ad breached CAP Code clauses 3.1 (Substantiation) and 18.3 (Comparisons with identified competitors and/or their products).

Action

The ad must not appear again in its current form. We told Npower not to make definitive, objective claims about future prices if those claims depended on circumstances that were out of their control.

Adjudication of the ASA Council (Non-broadcast)