ASA Non-broadcast Adjudication: Vonage Ltd

Complaint

An ad for Vonage Ltd claimed "Save 65% on your phone bill Unlimited* calls through your broadband £7.99 Noticed anything different about your BT phone bill? The line rental has gone up. Vonage gives you unlimited landline calls for just £7.99 a month. That's it. No call charges to landlines. No hidden costs and no extra line rental. Just £7.99 a month. Flat. That's a big saving." The ad showed a table comparing Vonage's costs per year with Telewest, BT and NTL. The table stated that various features including "Caller display" were free with Vonage's service. The footnote stated "*UK landline numbers starting with 01 and 02. For full details and terms and conditions, please visit www.vonage.co.uk. The figures for Telewest Talk Unlimited, BT Option 3 and NTL Talk Unlimited 24 are taken from their website and call centre, and are believed to be correct at the time of going to press. Weekly usage figures - 43 minutes Local and 18 minutes National (UK landline calls), 13.9 minutes Non-Geographic and 7 minutes Mobile († Other is defined as mobile and non-geographic i.e. 0845/0870 numbers), 2.5 minutes International. Source - OFCOM The Communications Market 2005 3. Telecommunications International rates have been based on costs to call the following counties: France, USA, Australia, India and South Africa." British Telecommunications Plc (BT) challenged:

1. the headline claim "Save 65% on your phone bill" and "That's a big saving" because they constituted absolute savings claims which could not be substantiated;

2. whether the claims "unlimited calls …unlimited landline calls …no call charges to landlines" were misleading because they were contradicted by the qualifications in the footnote;

3. whether the claim "Noticed anything about your BT phone bill? The line rental has gone up" was misleading because they referred to BT's option 1 tariff only and the price comparison in the ad was based on BT's option 3 tariff;

4. the price comparison because it did not compare like with like. BT complained that the comparison was misleading, unfair and gave Vonage an artificial advantage by comparing their service with BT Option 3 rather than their most similar service, BT Broadband Talk Anytime Plan;

5. whether the price comparison was misleading and unfair because the call pattern used as the basis of comparison was particular, peculiar and not described in the ad;

6. whether the price comparison was misleading and unfair because BT don't necessarily charge for caller display;

7. whether the price comparison was misleading because many of Vonage's customers paid for landlines and the ad did not make clear that the comparison referred to Vonage users without landlines;

8. whether the features claimed as "FREE" for Vonage customers in the comparison table were misleading because they were inclusive, not free and

9. whether the ad was misleading because it did not make clear that a customer's broadband service could be depleted by using Vonage's telephone service.

CAP Code (Edition 11)

Adjudication

Vonage Ltd (Vonage) said they had created the ad to comply with the Code and the CAP Help Note on Price Claims in Telecommunications Marketing. They said they had not intended to mislead customers and they did not believe the ad was misleading. Vonage said the comparisons were objective, fair and clearly presented. They said the footnote explained the basis of the comparison by referring to the comparable tariffs and qualifying the usage pattern.

1. Complaint upheld

Vonage said they had stated the amount typically saved on consumers' total bills based on weekly usage figures from an Ofcom report. They pointed out that the footnote specified the source of their competitors' figures and referred to the Ofcom report. Vonage provided us with the Ofcom report "Ofcom The Communications Market 3. Telecommunications" to substantiate their figures.

The ASA acknowledged that the footnote stated the source of their competitors' figures and the weekly usage figures. We noted that the Ofcom Report contained the weekly usage figures as stated in the footnote. We noted that the figures were the average use per residential fixed line and did not contain any meaningful call pattern data such as the time of day the calls were made. Because the overall cost comparison was not based on specific call pattern data and there was no generally accepted call pattern data, we concluded the savings claims were misleading. We advised Vonage to amend the claims with the help of the Copy Advice team.

On this point, the ad breached CAP Code clauses 3.1 (Substantiation), 7.1 (Truthfulness), 18.1 and 18.3 (Comparisons with identified competitors and/or their products).

2. Complaint upheld

Vonage said the claims "unlimited calls ... unlimited landline calls ... no call charges to landlines" were not misleading. They pointed out that the main claim "Unlimited calls" was linked by an asterisk to the footnote qualification which explained the type of calls available to customers at no additional charge.

We acknowledged that the claim "Unlimited* calls through your broadband £7.99" was linked to a footnote which stated "*UK landline numbers starting with 01 and 02." We noted that the main body of the text stated "Vonage gives you unlimited landline calls for just £7.99 a month." However, we noted that VoIP services were often purchased to make international calls. We considered that the exclusion of international calls was a significant condition likely to affect a reader's interest in the package and that the prominent claim "Unlimited* calls through your broadband £7.99" contradicted the qualifications given in the footnote. We concluded that the ad was misleading.

On this point, the ad breached CAP Code clause 7.1 (Truthfulness).

3. Complaint upheld

Vonage said the claim was factually accurate because the line rental for BT's option 1 had increased. They said they had compared their service to BT Option 3 because it was the most similar and they did not want to mislead customers. Vonage said the increase in line rental and the comparison to BT Option 3 package were two separate and unconnected points.

We acknowledged that the line rental with BT option 1 had increased. However, we noted that the table of comparison in the ad was based on BT option 3 and considered the ad did not make it clear that BT's line rental increased with BT option 1 only. We concluded the ad was misleading.

On this point, the ad breached CAP Code clauses 7.1 (Truthfulness), 18.1, 18.2 and 18.3 (Comparisons with identified competitors and/or their products).

4. Complaint upheld

Vonage believed they had made a like for like comparison and had chosen BT Option 3 as the most similar service to their own. They said their service provided all the features of a traditional primary line supplier and it was packaged as a substitute for BT customers. Vonage said the BT Broadband Talk Anytime Plan was not the most similar service to their own because it was an add-on to the BT broadband service and not a stand alone service. They said that BT Broadband Talk Anytime Plan offered non-geographic numbers to its customers which incurred a premium charge to call, were not often included in bundled packages and were not capable of being called across all of the UK. Vonage pointed out both BT Option 3 and their service offered geographic numbers. They also pointed out that BT Broadband Talk Anytime Plan did not offer Call minder or access to non BT directory enquiries or operator calls but their service did. They said broadband was a means of access to any number of applications and their service and BT Broadband Talk Anytime Plan were examples of different applications that could be accessed across a broadband connection. Vonage argued that the fact both services were accessible via broadband was not a reason to treat the services as like for like.

We noted the BT Broadband Talk Anytime package offered consumers a Voice over Internet Protocol (VoIP) service and customers could use BT Broadband Talk Anytime with broadband service providers other than BT. We noted that the Vonage Broadband service also required broadband in order to use its service. We noted Vonage's comments about broadband being only a means of access. However, we considered that the main and most comparative feature was the nature of Vonage's VoIP service and that the predominant message of the comparison was to attract customers from fixed line services to a new kind of service. We noted BT Broadband Talk Anytime Plan offered non-geographic numbers that could not be called by Telewest customers but we understood that was a technical problem that BT and Telewest were working to resolve. We noted that the cost of calling a BT Broadband Talk Anytime Plan was the same as calling a geographic number on BT Option 1 but that Call minder and access to non BT directory enquiries or operator calls were not provided. However, we considered that, in the context of an ad for a service that offered internet calls only, the BT Broadband Talk Anytime package was more comparable than the BT Together Option 3. We concluded that, in the absence of a clear and prominent statement that BT offered a more comparable internet phone service, recipients could wrongly infer that BT Together Option 3 was the BT package most comparable to Vonage. We told Vonage to ensure future similar comparisons included a qualifying statement about the most comparable phone service both near to the savings claim or comparison table and in similar size text. We advised them to seek help from the CAP Copy Advice team.

On this point, the ad breached CAP Code clauses 7.1 (Truthfulness), 18.1, 18.2 and 18.3 (Comparisons with identified competitors and/or their products).

5. Complaint upheld

Vonage said the table of comparisons was clearly presented to enable customers to make a rational choice. They said they made it clear in the table and footnote to which call pattern their price and savings claims applied. Vonage said the call pattern used as the basis of comparison was fully described in the ad.

We acknowledged that the footnote stated the comparison was based on "Weekly usage figures" from Ofcom. We noted that the Ofcom figures specified the amount of minutes per week only and did not refer to other variables such as the time of day. We did not consider that the Ofcom figures were a generally accepted call pattern. We noted also that the footnote in the ad defined Other "... as mobile and non-geographic i.e. 0845/0870 numbers) ..." whereas the Ofcom report stated that Other calls included "... freephone, special local and national rate, premium rate, directory enquiries and all other call types." Because there was no generally accepted call pattern data and because Vonage had not defined the individual call pattern adequately or used the Ofcom definition of "Other" calls, we concluded that the price comparison was misleading.

On this point, the ad breached CAP Code clauses 3.1 (Substantiation), 7.1 (Truthfulness), 18.1 and 18.3 (Comparisons with identified competitors and/or their products).

6. Complaint upheld

Vonage said they never charged for caller display whereas BT charged for caller display for its landline services. They argued that, because they were comparing the Vonage service against BT option 3, their statement was not misleading.

We noted Vonage's comments. Because BT offered caller display with BT Privacy at no cost to customers who made calls on the BT network which included the BT Together Option 3 package, we concluded the claim was misleading.

On this point, the ad breached CAP Code clauses 7.1 (Truthfulness), 18.1 and 18.3 (Comparisons with identified competitors and/or their products).

7. Complaint upheld

Vonage said the text "no extra line rental" made it clear that customers had to continue to pay BT's line rental chargers. Vonage said the ad was clearly targeted at BT customers and therefore customers with landlines.

We considered that, at present, most consumers were likely to use landlines to access the internet. We acknowledged that the ad stated "…no extra line rental." However, we noted that BT customers paid line rental charges and the BT figures in the comparison chart included landline rental costs. Because the Vonage figures did not include line rental charges we concluded the comparison was misleading.

On this point, the ad breached CAP Code clauses 7.1 (Truthfulness), 18.1, 18.2 and 18.3 (Comparisons with identified competitors and/or their products).

8. Complaint upheld

Vonage apologised for describing the inclusive features in the comparison table as free. They said it was an oversight on their part and they had introduced internal management controls to ensure it would not happen again.

We acknowledged that the inclusive features were described as free by mistake but reminded Vonage to ensure future similar ads were accurate and did not describe as free products or services that were an inclusive part of a package.

On this point, the ad breached CAP Code clauses 7.1 (Truthfulness) and 32.3 (Free offers and free trials).

9. Complaint not upheld

Vonage said that it was implicit in any sort of reference to broadband connection that the amount of usage determined the amount of bandwidth available. They said that the amount of bytes per voice call would have a minimal effect on the overall availability of capacity. Vonage said that the average customer used the Vonage phone service for 65 minutes a week and that usage would deplete 3% of a capped service only. They maintained that they had not stated that their broadband service could be depleted because voice calls would not have any noticeable impact on capacity availability.

The ASA noted Vonage's comments. We noted that a significant number of ISPs offered capped services, with an average minimum allowance of about 2GB per month. However, we understood that an allowance of that size would not be significantly depleted by making 260 minutes worth of VoIP calls a month. We did not object.

On this point, we investigated the ad under CAP Code clauses 3.1 (Substantiation) and 7.1 (Truthfulness), but did not find it in breach.