ASA Adjudication on Telecom Plus plc
Telecom Plus plc t/a
The Utility Warehouse
Network HQ
333 Edgware Road
London
NW9 6TD
Date:
26 September 2012
Media:
Internet (on own site)
Sector:
Utilities
Number of complaints:
1
Complaint Ref:
A12-197504
Background
Summary of Council decision:
Four issues were investigated, all were Upheld.
Ad
The website www.utilitywarehouse.co.uk, for a utilities service, included a "Gas & Electricity" page, which was headlined "Gas & Electricity With a 10% extra discount after 12 months!". Directly below was a section that was headlined "Powerful savings on Dual Fuel Plus the convenience of Gas and Electricity from one supplier". Further text included, under the heading "The Gas bit", "Guaranteed cheaper than British Gas*" and, under the heading "The Electricity bit", "Guaranteed cheaper than your local provider*" as well as the text "'TRIPLE VALUE' GUARANTEE Guaranteed savings wherever you live - thanks to our 'Triple Value' guarantee". Additional text was shown when the "'TRIPLE VALUE GUARANTEE'", was clicked on; it included "For your peace of mind, we guarantee our prices will always remain competitive compared with the cheapest standard tariffs available from the 'Big 6' suppliers* (see below)". The ad repeated claims such as "We guarantee we're cheaper than British Gas* wherever you live", in relation to gas, and "We guarantee we're cheaper than your regional electricity supplier* wherever you live".
Small print stated "* 'Big 6' means the six major energy companies who currently supply over 98% of UK households, comprising: British Gas, E.ON, npower, EDF (London Electricity, Seeboard and SWEB), Scottish Power and Scottish & Southern Energy. Guarantees and price comparisons are based on the OFGEM standard domestic usage profiles for low, medium and high users on a like-for-like basis and exclude Club membership fee, surcharge for gas customers using an Independent Gas Transporter, dual-fuel discounts and online tariffs. Only applies to direct debit customers. During periods when retail prices are changing, we typically announce our new prices after most of the 'Big 6' have set their new prices in order to ensure our new prices are competitive and in line with our 'Triple Value' guarantee. Therefore when energy prices are falling, there may be a short period before our new prices take effect when our prices may be higher than those available from certain other suppliers. The reverse will however generally be true during periods when energy prices are rising".
Issue
The complainant challenged whether the claims:
1. "'TRIPLE VALUE' GUARANTEE Guaranteed savings wherever you live - thanks to our 'Triple Value' guarantee";
2. "we guarantee our prices will always remain competitive compared with the cheapest standard tariffs available from the 'Big 6' suppliers*";
3. that The Utility Warehouse were guaranteed cheaper than British Gas; and
4. that they were guaranteed cheaper than regional suppliers
were misleading and could be substantiated, in particular because he believed the ad implied the claims applied to all tariffs whereas he understood that was not the case.
CAP Code (Edition 12)
Response
1. The Utility Warehouse said they had not received any complaints about the 'triple value' guarantee claims before and considered they would be interpreted as suggesting that savings were available to a substantial number of households in each region. They acknowledged, however, that it might be possible to misinterpret them and had therefore removed the wording "Guaranteed savings where-ever you live thanks to our Triple Value Guarantee" from their website. They said they believed the small print, which was linked to the claims using several asterisks, made clear which tariffs the guarantee applied to but they had also amended the small print to refer to standard tariffs to avoid any possibility of misinterpretation.
2. The Utility Warehouse said that "competitive" did not mean the same as "cheapest" and could, for example, be interpreted as relating to quality or offering an attractive value for money proposition. They said many factors supported their claim to be competitive, including their superior customer service, additional discounts offered to energy customers who chose to also use telephony services and additional savings for customers who used their cash back card, a 10% energy discount available to new customers, the simplicity of their bills and convenience of a single monthly bill for all services as well as the fact that they were generally one of the last suppliers to raise their energy prices, giving customers the benefit of lower prices for longer. In addition, they were competitive because their standard dual fuel prices were never more expensive than the average of the 'big six'. They were sometimes cheapest, or among the cheapest, but never more expensive. They said they were therefore very competitive as a dual fuel supplier and the claim was not misleading.
3. & 4. They said the text "Powerful savings on Dual Fuel" was intended to be read in conjunction with the headline "Gas & Electricity With a 10% extra discount after 12 months!"; after that discount had been included they were demonstrably the cheapest supplier of standard dual fuel for all customers in the UK for low, medium and high consumption. They said that fully justified the claim "Powerful savings on Dual Fuel", which was targeted at new customers. They pointed out that the claims "Guaranteed cheaper than British Gas*" and "Guaranteed cheaper than your local provider*" each appeared under the subheadings "The Gas bit" and "The Electricity bit". They believed they would not therefore be interpreted as relating to dual fuel.
The Utility Warehouse submitted spreadsheets, which related to their price monitoring for their competitors' published tariffs and showed calculations for low, medium and high users for each region. They said they made whatever necessary adjustments to their tariffs to ensure the claims made in the 'triple value' guarantee were accurate. They believed the evidence supported the clear, unambiguous claims that they were cheaper than British Gas for gas and cheaper than local providers for electricity. They said they had not received any complaints from their customers and that the claims were not misleading.
Assessment
1., 3. & 4. Upheld
The ASA acknowledged that The Utility Warehouse had amended their advertising. We understood the savings claims were intended to relate to comparisons with their competitors' standard tariffs. We considered, however, in particular because they appeared under the heading "Powerful savings on Dual Fuel Plus the convenience of Gas and Electricity from one supplier", the claims "'TRIPLE VALUE' GUARANTEE Guaranteed savings wherever you live - thanks to our 'Triple Value' guarantee", that The Utility Warehouse were guaranteed cheaper than British Gas and that they were guaranteed cheaper than regional electricity suppliers were likely to be interpreted as relating to savings they offered in comparison to their competitors' dual fuel tariffs.
While we acknowledged the claims "Guaranteed cheaper than British Gas*" and "Guaranteed cheaper than your local provider*" each appeared under the subheadings "The Gas bit" and "The Electricity bit", we also noted the subheadings, and therefore the claims, appeared under the larger text "Powerful savings on Dual Fuel Plus the convenience of Gas and Electricity from one supplier". We therefore considered the subheadings were likely to be interpreted as relating to the two aspects of a dual fuel package and that the claims would therefore be understood to mean that The Utility Warehouse were guaranteed cheaper than British Gas and local electricity providers for the relevant aspects of that package, rather than as distinct comparisons with standard gas and electricity tariffs. We considered all of the challenged claims were likely to be interpreted as suggesting The Utility Warehouse always offered savings on dual fuel tariffs, not that they would be the cheapest after the advertised discount, which we understood took effect only after 12 months of custom, was taken into account.
We noted that text one click away from the claim "'TRIPLE VALUE GUARANTEE'" stated "For your peace of mind, we guarantee our prices will always remain competitive compared with the cheapest standard tariffs available from the 'Big 6' suppliers*" and that small print included the text "Guarantees and price comparisons are based on the OFGEM standard domestic usage profiles for low, medium and high users on a like-for-like basis and exclude Club membership fee, surcharge for gas customers using an Independent Gas Transporter, dual-fuel discounts and online tariffs. Only applies to direct debit customers". We considered, however, that might be missed and, nevertheless, that it contradicted rather than clarified the impression that the claims related to savings on dual fuel tariffs. We therefore concluded that the claims were misleading.
On these points, the ad breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising), 3.9 (Qualification) and 3.33 (Comparisons with identifiable competitors).
2. Upheld
We considered the text "we guarantee our prices will always remain competitive compared with the cheapest standard tariffs available from the 'Big 6' suppliers*", which appeared one click away from the main claims, did not imply that The Utility Warehouse offered savings on dual fuel tariffs and was alone likely to be interpreted as suggesting their standard tariff prices were always competitive compared with all of the 'big six' suppliers. We noted the evidence submitted, which appeared to relate to standard tariffs for only one year, showed that The Utility Warehouse were, in the vast majority of cases for low, medium and high users in each region, more expensive than at least one and up to five of the competitors for gas, standard electricity and Economy 7 electricity. Whilst in some instances the difference between the price offered by The Utility Warehouse and the cheapest competitor was small, it others in was much greater and was up to almost £90. We acknowledged that "competitive" would not necessarily be interpreted as meaning that The Utility Warehouse were always cheaper than all of the 'big six' suppliers but considered the claim, which was clearly based on prices and not any other element of competitiveness, was likely to be understood to mean that they offered always closely comparable, and in many instances cheaper, tariffs. We noted that was not the case and therefore concluded that the claim was misleading.
On this point, the ad breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising), 3.7 (Substantiation), 3.9 (Qualification) and 3.33 (Comparisons with identifiable competitors).
Action
The ad must not appear again in its current form. We told The Utility Warehouse to ensure their future advertising did not include claims, implied or otherwise, that they had the lowest dual fuel prices if that was not the case. We also told them not to imply their prices were more competitive than was the case in future.
