ASA Adjudication on Digital Equipment Communication Maintenance Ltd

Ad

A mailing for Digital Equipment Communication Maintenance (DECM) stated “You will already know that Digital Equipment Communication Maintenance Ltd have taken over responsibility of servicing and maintaining the facsimile machines and printers previously covered by Ceefax Systems Ltd. We understand that you could have paid for a service agreement in August last year, which covered you for twelve months; should this be the case, we would appreciate it if you would kindly fill in the number of machines on the enclosed document in the space marked with a cross, sign it and return it to us within the next few days …”. The second page of the mailing, which took the form of an invoice, was headed “BUSINESS EQUIPMENT MAINTENANCE AGREEMENT … THE EQUIPMENT Fax machines and printers”. Text stated “number of machines” followed by a handwritten cross and a space for recipients to fill in and “Cost of the first 12 months per machine exclusive of VAT £90 VAT £15.75 PAID”. Smaller text stated “Subject to the terms and conditions set out overleaf …” and there was a box at the bottom of the invoice for the recipient to sign. Text overleaf stated “TERMS AND CONDITIONS … 6. The service agreement shall continue for a minimum period five years from the commencement date and thereafter from year to year until terminated as provided hereafter …”. The third page of the mailing was a carbon copy of the second.

Issue

The complainant, who had not entered into a service agreement with Ceefax Systems, believed the mailing was misleading because:

1. it implied that recipients had previously entered into a service agreement with Ceefax Systems and

2.  two pages, which were designed to look like an invoice that had already been paid, were blank contracts that tied signatories to a five-year service agreement.

CAP Code (Edition 11)

Response

DECM said they did not advertise.  They explained that, if callers requested help with office equipment problems, they were told assistance could not be provided unless a service agreement was in place; sometimes the callers claimed that they had already paid for a service agreement, in which case the agreement would be sent to them on the assumption that recipients would sign it only if they had already paid.  They said if the complainant had not contacted them, someone representing him must have done so.  They said they did not put any pressure on recipients to sign service agreements they sent.  They said recipients would read the terms and conditions on the reverse of the service agreement and pointed out that the second page of the mailing stated "subject to terms and conditions set out overleaf".

Assessment

1. Upheld

The ASA noted the complainants assertion that he had never had a contract with Ceefax Systems.  We considered that the mailing implied recipients could have  previously entered into a service agreement with Ceefax Systems and noted DECM had not sent evidence to substantiate that that was the case.

On this point the mailing breached CAP Code clauses 3.1 (Substantiation) and 7.1 (Truthfulness).

2.  Upheld

We noted the complainants assertion that he had not contacted DECM and had not made any payments for servicing office equipment.  We understood that an invoice was a document, issued by a seller to a buyer, listing the goods and services supplied and stating the sum of money due.  We noted the second page of the mailing stated "Invoice address" followed by the recipients address and the text "Cost of the first 12 months per machine exclusive of VAT ?90 VAT ?15.75 PAID".  We considered that the second page of the mailing suggested that it was an invoice that had already been paid.  Because it was in fact a contract, we concluded that the mailing was misleading.

We noted recipients who signed and returned the mailing would enter into a contractual relationship with DECM for five years.  We considered that the text at the bottom of the second page of the mailing "Subject to the terms and conditions set out overleaf, Digital Equipment Communication Maintenance Limited agrees to maintain the equipment in good working order, to make service calls for such purpose and fit parts and accessories as are necessary for the efficient working of the equipment" did not make clear the contracts duration or total cost, which we considered were significant conditions, and that the mailing was therefore likely to mislead.  Although we noted text in the terms and conditions stated the length of the contract, we considered that it was not prominent enough.

On this point the mailing breached CAP Code clauses 7.1 (Truthfulness) and 22.1 (Identifying marketing communications).

Action

We told DECM not to repeat the approach and to ensure that they held substantiation for all claims made in their marketing communications.

Adjudication of the ASA Council (Non-broadcast)