Ad description

A four-page wraparound press ad, for a mobile phone contract provider, stated "Exclusive to Virgin Media customers - SAFESATIONAL - With insurance included on all our sensational tariffs, your phone's covered. So there's no need to worry ... even if you leave it on the train". Small print on the interior pages stated "... Terms and conditions apply, see virginmobile.co.uk/insurance for details".

Issue

The Financial Services Authority (FSA) challenged whether the claim "... there's no need to worry ... even if you leave it on the train" was misleading because, having read the relevant terms and conditions, they understood that unattended phones were not covered by the insurance policy unless they were locked securely out of sight, and that cover was dependent upon customers having activated the Mobile Rescue security app on their handset.

Response

Virgin Media Ltd (Virgin) responded that the insurance was administered by NEWAsurion Europe Ltd (Asurion), who would not cover any loss which came from a customer having left their phone at risk of loss by leaving it unattended, unless it was locked out of sight and there were signs of forced entry. However, they stressed that all instances of accidental loss were covered by the policy. They stated that an instance of a customer accidentally leaving their phone on a train was distinct from their having made a conscious decision to leave the phone at risk of loss or theft. They said if the customer had activated the Mobile Rescue security app on their phone and had subsequently left it on public transport by accident, it would be covered by the insurance policy. They also said the small number of phones which weren't compatible with that app would be automatically covered.

Virgin explained that the Mobile Rescue security app was designed to help customers locate a misplaced phone and was used by Asurion as part of the claims administration process to check the location of the handset at the time the claim was reported to them. They stated that that could result, on some occasions, in the identification of fraud or in the retrieval of a lost or stolen phone. They said the terms of the policy clearly set out that customers must activate the Mobile Rescue security app in order to benefit from cover for loss or theft. They also stated that new customers were sent text messages on two occasions during the 14 days after the policy start date to advise them of that condition of cover; that an activation link was provided in each message; that if the message was not successfully delivered it would be re-sent to the customer; and that cover would apply where the app had been only partially downloaded. They said it was also possible to activate the app at any time over the internet or by calling the insurer, and every customer would automatically be covered for loss or theft for the first 14 days of their policy, which allowed them time to set up the app.

Virgin provided information relating to the number of claims made under the insurance policy since 2010 by people who had lost their phone on public transport, and the proportion of those claims that had been accepted. They also provided examples of successful claims made around the time of the ad and since it had appeared. This demonstrated that some customers had been able to obtain replacement handsets after inadvertently leaving theirs in taxis, on trains or on the London Underground.

Assessment

Not upheld

The ASA considered that consumers would be likely to understand from the claim "... there's no need to worry ... even if you leave it [the phone] on the train" that their phone would be covered under the insurance policy if they inadvertently left it on public transport.

At the time of the complaint to the ASA, the terms and conditions of the policy (which were available from the website listed in small print in the ad and which had subsequently been updated) stated that "Loss*" was included under the policy. That linked to text which stated "Only if the free Mobile Rescue app is installed on your phone (assuming your phone is compatible). Terms apply". Further down the page, text under the heading "What's not included?" stated "Any loss or theft after 14 days, unless the free Mobile Rescue app is installed on your phone" and "Any phone left unattended, unless it's locked securely out of sight".

We understood from Virgin that all handsets would be covered against loss or theft for the first 14 days of the policy, and that after that period the customer had to have activated the Mobile Rescue app in order to benefit from that cover. We further understood that the app was compatible with the majority of handsets, but that in instances where it was not, the customer would automatically receive cover against loss and theft. We noted that Virgin drew a distinction between a customer accidentally leaving their phone in a public place and knowingly doing so, and that the handset would be covered in the former instance and not in the latter (unless it was locked securely out of sight). Although we acknowledged the FSA's view that the terms and conditions on the website were confusing on that point, we considered that Virgin had demonstrated, by means of the claims data sent to the ASA, that they provided cover for the accidental loss of handsets on public transport, and that that cover was consistent with the message of the ad.

We noted that, in order to benefit from cover against loss and theft beyond the first 14 days of the policy, the Mobile Rescue security app had to be activated on the handset if the two were compatible. We considered that, in view of the fact that the app was free and easily accessible, knowledge of the activation requirement was unlikely to affect the consumer's decision-making process regarding the product on offer, and that it was therefore not material information which needed to be included in the ad.

Because we were satisfied that the implementation of the insurance policy matched the impression most consumers would gain from the ad regarding loss on public transport, and because in our view the requirements surrounding the Mobile Rescue app were not material information, we concluded that the claim "... there's no need to worry ... even if you leave it on the train" was not misleading.

We investigated the ad under 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) and  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), but did not find it in breach.

Action

No further action necessary.

CAP Code (Edition 12)

3.1     3.3     3.7     3.9    


More on