ASA Adjudication on Virgin Mobile Telecoms Ltd

Ad

A regional press ad for Virgin Mobile was headed "SAVE UP TO £20 OFF ONE OF THESE PAY AS YOU GO PHONES" - Hurry, offer ends on Sunday." The ad showed pictures of three models of phone with their promotional prices in bold and their higher, normal prices crossed through in smaller text underneath. One of the phones was the Nokia 6300. The price was shown as "NOW £69.99 - WAS £89.99/£74.99" (the two higher prices were crossed through). Further details of the offer and contact details were shown underneath. At the foot of the page, footnote text stated further conditions relating to the promotion.

Issue

A reader challenged whether the savings claim for the Nokia 6300 was misleading and could be substantiated because it did not state that the previous, £74.99 price included £20 of airtime.

CAP Code (Edition 11)

Response

Virgin Mobile (Virgin) said the price of the Nokia 6300 (the 6300) was reduced to £69.99 as part of a promotion that ran between 10 and 20 July. At other times in July, they said the price of the handset was £74.99. They said that, during July, customers who purchased £20 of airtime as an airtime "top up" at the same time as they purchased a new handset received £20 discount off the price of certain handsets, including the 6300. They said this meant the "package price" of the 6300 and £20 airtime was £74.99, bringing the cost of the handset down to £54.99. They sent a copy of a leaflet that had been in circulation before the promotion which showed the 6300 priced at £54.99 "when you top up with £20." They also sent a month-by-month breakdown of the pricing of the 6300 between March and August 2008. The breakdown showed it had been sold on a handset-only basis, without airtime, for £89.99 in March and April. In May and June, the price for the handset only was reduced to £79.99, but it was also available for the same price including £10 and £20 of airtime in May and June respectively. In July and August, apart from the promotional period, the price for the handset only was reduced to £74.99, but it was also available for the same price including £20 of airtime. They said customers were free to purchase the handset without airtime, however, in which case it cost £74.99. Virgin said they therefore did not agree that the ad was misleading for stating a previous selling price of £74.99.

Assessment

Not upheld

The ASA noted that Virgin had previously sold the 6300 for £89.99, £79.99, £74.99 and - during the promotion - £69.99. We noted that when it had sold at £79.99 and £74.99, customers were offered airtime vouchers of £10 or £20 (depending on which offer was running at the time). At the same time, the handsets were still offered at that price without the airtime. Regardless of whether the customer took up the airtime voucher offer, the price they paid was the same. Although being given a voucher effectively reduced the price of the handset by that amount, we noted that it was never possible to buy the handset on its own at that reduced price. If either of the crossed-through prices had been available only as part of a package that included airtime, then we would not have considered it valid to compare them with a price that did not include airtime. Because that was not the case, we considered it was reasonable for the ad to claim that the £69.99 price was reduced from the crossed-through prices that preceded it and that it was not necessary to state that they included £20 (or £10) of airtime.

We investigated the ad under CAP Code clauses 3.1 (Substantiation), 7.1 (Truthfulness) and 15.5 (Prices) but did not find it in breach.

Action

No further action necessary.

Adjudication of the ASA Council (Non-broadcast)