Background
Summary of Council decision:
Four issues were investigated, all were Upheld.
Ad description
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*". The ad also included the text "'TRIPLE VALUE' GUARANTEE Guaranteed savings wherever you live - thanks to our 'Triple Value' guarantee" and “Want a fair deal ALWAYS? If you’re tired of short-term energy offers followed by big price rises, switch to us for your gas and electricity. We don’t do gimmicks, we just offer you a fair deal always 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.
Response
1. The Utility Warehouse said they had not received complaints about the 'triple value guarantee’ claims before. They considered the challenged claim 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 it 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, despite not having received any complaints directly from consumers.
The Utility Warehouse said the guarantee was intended to relate to dual fuel contracts and the wording was both specific and accurate in relation to the component parts of the dual fuel offer. The three aspects of the guarantee, which they considered to be clearly set out, were that they were cheaper than British Gas for gas, cheaper for electricity than the regional provider in the area in which the customer lived and also competitive for dual fuel. The small print explained that basis of the comparison was against standard tariffs. They believed the claim as it originally appeared was not misleading and, although they had voluntarily changed it, they believed it was also not unclear or ambiguous.
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. They also pointed out that the claim appeared with an asterisk and the text “(see below)”, which made very clear to consumers that they should read the below small print, which in turn expanded on the claim.
The Utility Warehouse said that, in general, suppliers that offered the cheapest gas prices were among the most expensive for electricity and vice-versa, which highlighted the competitive nature of the energy market and the different pricing policies adopted. However, dual fuel customers were more likely to be concerned with the total cost of their energy use than with the component costs. It was only in relation to that total cost that The Utility Warehouse guaranteed to be (and were) competitive and that was why their prices were not always closely comparable to, or cheaper than, all of their competitors for single fuels and why they did not make the claim to be “competitive” in relation to each component part of the dual fuel deal. Their combined gas and electricity prices were, however, competitive, because the total payable for both fuels was always closely comparable with, and in some instances cheaper than, the cost of taking dual fuel from the ‘big six’ suppliers. They submitted a table that compared their competitors’ prices for low, medium and high tariff users in one region each and included a column related to dual fuel prices.
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!", because 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 who received the advertised 10% discount. 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 the challenged claims would not therefore be interpreted as relating to dual fuel and emphasised that dual fuel tariffs did not exist as such, because providers did not operate separate tariffs for customers that received both gas and electricity from them. Instead, the customer paid for each type of fuel at the supplier’s standard tariff rate for the relevant region and then a small retrospective discount was applied. They said some suppliers offered other tariffs for gas and/or electricity that had a fixed price for a fixed period and, while it could be difficult for consumers to compare prices in an environment where there were so many different factors, all providers had standard tariffs which formed the basis of most bills. The Utility Warehouse said a report from Ofgem confirmed that standard tariffs remained the most popular and, for those reasons, it was fair and objective to present a comparison between providers’ standard tariffs. They emphasised that there was no such thing as a dual fuel tariff, because the providers’ standard tariff rates applied to each element of the service. They submitted the Ofgem report and an explanation of dual fuel tariffs from an online energy price comparison site as well as information on energy contracts from Citizens Advice.
The Utility Warehouse pointed out that the claims each appeared with an asterisk, which was a generally accepted method of indicating to the average consumer that there was qualification or further explanation to the statement and would lead them to the wording that appeared in the ‘footnote’. They said that wording made clear that their comparisons were based on the Ofgem standard domestic usage profiles and not with any other type of tariff. It also made clear that any type of discount, whether from them or their competitors, was excluded from the comparison. They said the text was in a reasonable sized font and was only a short scroll away from the claim. In addition, they believed the text headed “Want a fair deal ALWAYS?” made clear that they were not claiming their dual fuel deals would always offer savings compared to other providers’ bills, rather that they offered a fair deal. They said there was no contradiction between the small print and any of the primary claims or any inconsistency between them. Similarly, the pop-up text related to the ‘triple value guarantee’ set out separate and accurate statements about individual gas and electricity payments and stated that their dual fuel prices would remain competitive, which was very different to claiming they would always have the lowest prices.
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. The Utility Warehouse said those claims were absolutely accurate and were substantiated by the data they had submitted. They believed it was clear from both the wording and the presentation of the claims that they related to the two separate elements of a dual fuel contract, however they were also true for those consumers who took only one service.
The Utility Warehouse said the data was equally applicable to the claim "we guarantee our prices will always remain competitive compared with the cheapest standard tariffs available from the 'Big 6' suppliers*" and to the claims about the separate gas and electricity elements that made up their dual fuel proposition. That was because their gas prices were cheaper than British Gas on a region by region basis and their electricity prices were cheaper than the relevant regional provider, so they were by definition also cheaper for both the gas and electricity elements of the dual fuel offering. They said that would be true for every customer and believed the way in which dual fuel tariffs worked was implicit in the evidence they had provided. The Utility Warehouse said they had not received any complaints from their customers and that the claims were not misleading.
Assessment
THIS ADJUDICATION REPLACES THAT PUBLISHED ON 26 SEPTEMBER 2012. THE WORDING HAS BEEN REVISED BUT THE DECISION TO UPHOLD ALL FOUR POINTS OF COMPLAINT REMAINS.
1., 3. & 4. Upheld
The ASA acknowledged that The Utility Warehouse had amended their advertising. We also acknowledged their explanation that the claims that they were guaranteed cheaper than British Gas and also cheaper than regional electricity suppliers were intended to relate to comparisons with their competitors' standard tariffs and, similarly, to the two separate elements of a dual fuel package. We understood from their explanation that the claims were intended to communicate two of the three separate aspects of the guarantee: a comparison with British Gas for gas and with the consumer’s local provider for electricity.
We considered, however, in particular because they appeared in a box 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", "Guaranteed cheaper than British Gas*" and "Guaranteed cheaper than your local provider*" were all likely to be interpreted as relating to savings available in comparison with their competitors' dual fuel tariffs, which we understood were usually ‘bundles’ that included a discount for taking two services from one supplier. We therefore considered the claims would be understood to refer to the prices of dual fuel tariffs, whereby the total cost of the two services, also taking into account any related discount, was the relevant point of comparison. In the context of the prominent heading "Powerful savings on Dual Fuel Plus the convenience of Gas and Electricity from one supplier", we considered all of the challenged claims were likely to be interpreted as suggesting The Utility Warehouse offered guaranteed savings on dual fuel tariffs as a whole, not that they would be the cheapest after the advertised 10% discount, which we understood took effect only after 12 months of custom, was taken into account. We considered the text "Gas & Electricity With a 10% extra discount after 12 months!" was likely to be interpreted as referring to a discount available in addition to savings that were generally guaranteed for dual fuel customers.
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" and considered it was clear when they were considered in isolation that they were intended to refer to guarantees that The Utility Warehouse would be cheaper than British Gas for gas and cheaper than the local supplier for electricity. We considered, however, in the context in which they appeared, the claims were likely to be interpreted to mean that savings could be achieved with The Utility Warehouse when compared to competitors’ dual fuel packages. However, we considered it was not relevant to compare the price of gas from one supplier with electricity from another when making claims that appeared under the sub-heading “Dual Fuel”, and which were therefore likely to be interpreted as relating to guaranteed savings on the total dual fuel bill, because it was generally understood that consumers who took a dual fuel package would not take the two elements from two different suppliers.
We noted that text in a pop-up box 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, which was linked to the claims "Guaranteed cheaper than British Gas*" and "Guaranteed cheaper than your local provider*" by asterisks, 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, the text in the pop-up box might be missed and that, nevertheless, both that text, which referred to “standard tariffs” and the explanatory small print, which referred to the exclusion of dual fuel discounts, contradicted the impression that the claims, in the context in which they appeared, related to those dual fuel tariffs offered as bundles by competitors of The Utility Warehouse. We also considered the text under the heading “Want a fair deal ALWAYS?” did not make clear that the claims "'TRIPLE VALUE' GUARANTEE Guaranteed savings wherever you live - thanks to our 'Triple Value' guarantee", "Guaranteed cheaper than British Gas*" and "Guaranteed cheaper than your local provider*" were not intended to refer to guaranteed savings on dual fuel.
We considered the spreadsheet submitted, which appeared to relate only to separate gas, standard electricity, and Economy 7 electricity tariffs for one year, was not relevant to claims that were likely to be understood as relating to dual fuel bundles, for which the price of the overall package including any applicable discount was the relevant point of comparison. We also noted the table that included a sample of the standard tariff comparisons, as well as a column that related specifically to dual fuel. However, we considered that a sample of comparisons was not sufficient to substantiate claims that were likely to be understood to mean that savings were guaranteed with The Utility Warehouse for dual fuel customers wherever they lived. For the reasons given, we concluded that the claims were misleading.
On these points, the ad breached CAP Code (Edition 12) rules
3.1
3.1
Marketing communications must not materially mislead or be likely to do so.
and
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),
3.7
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),
3.9
3.9
Marketing communications must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify.
(Qualification) and
3.33
3.33
Marketing communications that include a comparison with an identifiable competitor must not mislead, or be likely to mislead, the consumer about either the advertised product or the competing product.
(Comparisons with identifiable competitors).
2. Upheld
We noted The Utility Warehouse’s explanation that the claim text "we guarantee our prices will always remain competitive compared with the cheapest standard tariffs available from the 'Big 6' suppliers*", which appeared in a pop-up box when the "'TRIPLE VALUE GUARANTEE'" was clicked on, was intended to refer to their being competitive when compared to the ‘big six’ suppliers’ dual fuel prices. We considered, however, the claim, which appeared one click away from the main claims, was instead alone likely to be interpreted as suggesting their standard tariff prices were always competitive compared with all of the 'big six' suppliers, in particular because it included the words “standard tariffs”.
We noted the headline claim “Powerful savings on Dual Fuel” continued to be visible when the separate pop-up box and acknowledged it was possible that the claim would be read in the context of the headline but considered that, even if that was the case, the claim "we guarantee our prices will always remain competitive compared with the cheapest standard tariffs available from the 'Big 6' suppliers*" was ambiguous and contradictory. We considered “cheapest standard tariffs” was very specific and that it was therefore more likely the claim would be understood as a reference to standard single, as opposed to dual fuel, tariffs. We acknowledged that the claim appeared with an asterisk and the text “(see below)” and noted that the small print it linked to explained that the claim was 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”. However, we considered, because it referred to the exclusion of dual fuel discounts, that reinforced the impression that the claim was based on a comparison of standard tariffs. We considered the claim would be understood to mean that, as well as being cheaper than British gas for gas and cheaper than the relevant regional provider for electricity, The Utility Warehouse’s standard tariff prices were competitive when compared with the cheapest of each of the ‘big six’ suppliers’ standard gas tariffs and also with each of those suppliers’ cheapest standard tariff prices for electricity. We therefore assessed the evidence we received on that basis.
We noted the spreadsheet submitted, which again appeared to relate only to separate gas, standard electricity, and Economy 7 electricity tariffs for 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. We also noted the table that included a sample of those comparisons, as well as a column that related specifically to dual fuel. However, we considered the claim was not likely to be interpreted as referring to being competitive on dual fuel and that the evidence was not therefore relevant to the claim in the form in which it appeared. Nevertheless, we considered that a sample of comparisons would in any case not be sufficient to substantiate a comparison if it was clearly based only on dual fuel tariffs.
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 included the words “cheapest standard tariffs” and 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. Given that the evidence submitted showed that, when compared against each of the ‘big six’ suppliers for gas, and each of those suppliers for electricity, The Utility Warehouse’s prices were not always closely comparable or cheaper, we concluded that the claim 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.
and
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),
3.7
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),
3.9
3.9
Marketing communications must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify.
(Qualification) and
3.33
3.33
Marketing communications that include a comparison with an identifiable competitor must not mislead, or be likely to mislead, the consumer about either the advertised product or the competing product.
(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 in future that their prices were more competitive than was the case.
