Ad description
A page on Axis Telecom's website in May 2011 was headlined "Cheaper home phone bills guaranteed". Small text below stated "Axis Telecom offers our customers landline, mobile and broadband packages specifically designed to suit your needs. All these services allow you to keep your existing telephone line and number but with the benefit of significant cost savings on your current phone bill. We are so confident that you will save money on your BT bills that if you don't make a saving on your bills in the first year we'll refund double the difference! What's more if another provider contacts you and offers what they believe is a better price we'll not just match it - we will beat it".
Text in six boxes below explained the details of the various service packages. Text in the first box stated "Home User Option 1 Unlimited Evening & Weekend Calls only £6.38 per month plus line rental". Text in the second box stated “Home User Option 2 Unlimited Local & National Calls only £9.52 per month plus line rental”. Text in the fifth box stated "Home User Lowest UK Line Rental from only £6.71 per month".
Text on a separate page headlined “Contract Conditions for the Supply of Telephone Services to Residential Users”, in a section entitled “PAYMENT”, stated “Your agreement with us is at all times subject to the condition that our charges to you for our services supplied will be in a minimum sum of £24 per month”.
Issue
1. Two complainants challenged whether the stated prices were misleading because they understood that the advertiser levied a minimum charge of £24 per month.
2. One complainant challenged whether the claim "Cheaper home phone bills guaranteed" was misleading and could be substantiated.
Response
1. Axis Telecom (Axis) said they had changed their operating terms and conditions in April 2011 to incorporate a minimum bill spend of £24 and acknowledged that the prices on their website had not been corrected to take that into account. They said the minimum spend was introduced as the low cost prices they offered were only achievable if a customer agreed that they would spend a minimum amount each month. Axis said new customers were informed of the minimum bill spend at the time that their agents spoke to customers and customers therefore had the option not to continue. They said they had now removed the minimum charge and provided figures for the number of customers affected by it for the four months when it was in effect.
2. Axis did not respond on this point.
Assessment
1. Upheld
The ASA noted that Axis’s website stated that line rental was priced from £6.71 and that call packages were an additional £6.38 or £9.52. We therefore considered that readers would infer that Axis’s services could be purchased for those prices.
We noted, however, that in April 2011 Axis had introduced a minimum monthly charge of £24 which applied to all existing and new customers and we understood that the complainants, who were both existing customers paying approximately £13 per month each, had seen abrupt and significant increases in their bills as a result. We understood from the figures provided by Axis that a significant proportion of their customer base had also been affected in this way. We were also concerned that, in the act of implementing the minimum charge, but not amending the prices on their website, Axis had immediately rendered those individual prices, which were below £24, unobtainable by any customer.
We noted that Axis had amended the terms and conditions on their website to include an explanation of the charge and had informed existing customers of the minimum charge when they contacted Axis. However, we considered that a minimum charge was a significant condition and that inclusion on the terms and conditions page alone was not sufficient to counter the misleading impression given by the headline prices on the main page. Nor did we consider it appropriate for customers to have to respond to the ad before they were told that the prices it featured were only attainable upon a £24 minimum spend.
Although we noted that the minimum charge had been withdrawn we concluded that, at the time it was applicable, the ad was misleading.
On this point the ad breached CAP Code (Edition 12) rules
3.1
3.1
Marketing communications must not materially mislead or be likely to do so.
3.3
3.3
Marketing communications must not mislead the consumer by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that the consumer needs to make informed decisions in relation to a product. Whether the omission or presentation of material information is likely to mislead the consumer depends on the context, the medium and, if the medium of the marketing communication is constrained by time or space, the measures that the marketer takes to make that information available to the consumer by other means.
(Misleading advertising),
3.17
3.17
Price statements must not mislead by omission, undue emphasis or distortion. They must relate to the product featured in the marketing communication.
and
3.18
3.18
Quoted prices must include non-optional taxes, duties, fees and charges that apply to all or most buyers. However, VAT-exclusive prices may be given if all those to whom the price claim is clearly addressed pay no VAT or can recover VAT. Such VAT-exclusive prices must be accompanied by a prominent statement of the amount or rate of VAT payable.
(Prices).
2. The ASA considered that the claim "Cheaper home phone bills guaranteed" would be interpreted by readers as a claim that Axis offered the lowest price home phone bills. We considered that that was an objective claim capable of substantiation with robust and recent market monitoring data that showed that that was the case.
We noted that Axis had not responded to this point of complaint and that we had therefore not seen evidence that supported the claim that they offered the lowest prices. In the absence of such evidence, we concluded that the claim had not been substantiated and was misleading.
On this point the ad breached CAP Code (Edition 12) rules 3.1 3.1 Marketing communications must not materially mislead or be likely to do so. (Misleading advertising) and 3.7 3.7 Before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers are likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation. (Substantiation).
Action
We told Axis to ensure that prices featured in their marketing communications were not misleading and to make clear if minimum charges applied.
