ASA Adjudication on Dell Computer Corporation Ltd

Ad

An insert in the national press, for computers, showed a picture of the Inspiron 1300 lap top computer with 14.1" widescreen. The text underneath the computer stated " ... 512 MB (Was 256 MB) 553MHz DDR2 SDRAM ... AMAZING VALUE! £249 Excl. VAT & Shipping £353 Inc. VAT & Shipping E-VALUE CODE ... ". In the top right-hand corner text stated “SMALL AND MEDIUM BUSINESS SEPTEMBER 2006” and at the bottom of the page text stated “Desktops from £199 Excl. VAT & Shipping Servers from £339 Excl. VAT & Shipping ... “.

Issue

1. The complainant challenged the availability of the Inspiron 1300 with 512 MB RAM, because when he tried to purchase, he was told an extra charge applied to receive 512 MB.

2. The ASA challenged the prominence of the VAT-exclusive price compared with the VAT-inclusive price.

CAP Code (Edition 11)

Response

1. Dell Computer Corporation Ltd (Dell) explained that the information about the Inspiron 1300 offer with 512MB RAM was incorrect: they said it had been carried over into September's ads from August's copy by mistake.  They apologised for any inconvenience caused by the error.

2. Dell said it was their practice to give prominence to VAT-exclusive and VAT-inclusive prices when advertising was directed at both the general public and businesses.  They pointed out that only two products in the ad were displayed without a VAT-inclusive price.  They asserted that one of the products displayed was a server, which was a business product, and therefore could be shown with a VAT-exclusive price only. They pointed out that the ad claimed "desktops from £199" and therefore believed readers would understand that £199 was the lowest price at which a desktop could be purchased.

Assessment

1. Upheld

The ASA noted Dell's apology.  Because the Inspiron 1300 with 512 MB RAM offer was not available as advertised, we concluded that the ad was misleading.

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

2. Upheld

The ASA noted the insert targeted both the general public and businesses.  We also noted Dells assertion that most of the products in the ad were shown with both a VAT-inclusive and VAT-exclusive price and it was acceptable to show the two products advertised with a VAT-exclusive price only because servers would interest business users only and the reference to desktops used a "from" price for a non-specific product.  We nevertheless considered that, because the insert targeted both the general public and businesses, the VAT-inclusive prices should have been given at least equal prominence to the VAT-exclusive prices.  We also considered that, because the desktops could be of interest to non-business users who would be unable to get a desktop for £199, the approach of using a "from" price excluding VAT was misleading.  

On this point, the ad breached CAP Code clauses 15.1 (Price claims) and 15.2 (VAT).

Action

We told Dell to ensure that greater care was taken in future to avoid errors that could lead to consumer disappointment. We also told them to ensure that VAT-inclusive and VAT-exclusive prices were quoted with equal prominence in ads that targeted a general readership.

Adjudication of the ASA Council (Non-broadcast)