ASA Adjudication on Localphone Ltd
4 Paradise Street
4 July 2012
Internet (search engine)
Computers and telecommunications
Number of complaints:
A Google sponsored search result for Localphone Ltd, a telecoms company, stated "Call Peru for 0.8p/min ... Cheap Calls to Peru - Try a Free Test Call Today!"
The complainant challenged whether the ad was misleading, because the price quoted was exclusive of VAT.
CAP Code (Edition 12)
Localphone Ltd (Localphone) said their ads were in line with those of their competitors and that, when consumers clicked through to their website, the VAT inclusive price was shown. They told us that they had amended the search listing to show the VAT inclusive price but that they felt this put them at a disadvantage compared to their competitors
The ASA noted the ad quoted a VAT exclusive price and that the Code made clear that VAT exclusive prices may be given only if all consumers to whom the price claim is addressed pay no VAT or can recover VAT. Because we understood that was not the case, we concluded that it was misleading for Localphone to quote a VAT exclusive price in sponsored search results.
The ad breached CAP Code (Edition 12) rules 3.1 (Misleading advertising), 3.3 (Misleading advertising) and 3.18 (Prices).
The ad must not appear again in its current form. We told Localphone not to state VAT exclusive prices unless all consumers to whom the price claim is addressed pay no VAT or can recover VAT.