Ad description
Text on a section of the website www.virginactive.co.uk headed "THE TWICKENHAM CLUB" listed membership options for a health club in Twickenham. Each option was accompanied by a price in the format "£x per month" and a link labelled "Enquire now". The final membership option, which was titled "PRUHEALTH PRUPROTECT Full Flexi" and was available to PruHealth and some PruProtect members, was accompanied by text stating "A separate joining fee may apply".
Text at the bottom of the page, under the heading "Your questions answered", stated "Are there any costs other than the membership fee? - There is a one-off joining fee, which varies per club. Your Membership Team will let you know what this is."
Issue
The complainant challenged whether the price claims were misleading because they did not display the cost of the joining fee.
Response
Virgin Active Ltd stated that, whereas the cost of each of the membership options offered by individual clubs remained fairly stable over time, they used joining fees as a tool to influence membership sales and therefore those fees would be changed, or even waived, at very short notice on a club-by-club, option-by-option basis. They said if joining fees were stated on their website it would not be possible to update them across all of the different clubs and membership options with the speed and frequency that would be necessary to ensure that the website accurately reflected the fee a new customer would pay if they visited a club to become a member. They noted that their website did not offer the option to join a club online.
Virgin Active pointed out that the bottom of the web page stated that a one-off joining fee would apply, but said they would be happy to repeat that information at the top of every membership page. They considered that that amendment would be sufficient to ensure that the web page did not mislead. They also noted that the CAP Code stated that where a tax, duty, fee or charge could not be calculated in advance, the marketing communication must make clear that it was excluded from the advertised price and state how it was calculated. They commented that the variable nature of the joining fee meant that it could not be calculated in advance and it was not possible to state how it would be calculated.Iinstead, the web page directed consumers to contact them to find out the amount of the joining fee at the club in which they were interested.
Assessment
Upheld
The ASA noted that the monthly membership prices stated on the web page were subject to the payment of a joining fee. We understood that the amount of that fee varied according to the individual health club and membership option selected and was in all cases subject to frequent change, including that it could sometimes be entirely waived. We understood, however, that whenever the club in question had decided to charge a joining fee, that fee would be non-optional.
We considered that the existence and amount of a non-optional joining fee was material information to a consumer viewing the monthly membership price for a health club and was likely to influence their decision as to whether, and how, to respond to the price claim. The CAP Code required that quoted prices must include non-optional fees and charges that applied to all or most buyers. We noted that in this case the joining fee was a one-off, up-front charge that could not be incorporated into the quoted monthly price because the latter would be an ongoing cost. We therefore considered that, where each monthly price was first shown to consumers on the website and a joining fee was payable, that price needed to be immediately qualified with a reference to the amount of the joining fee applicable to that particular membership option at that club.
We noted Virgin Active's comment that the joining fee could not be calculated in advance. We considered, however, that marketers had a responsibility to ensure that their claims, including their price claims, complied with the CAP Code whenever they were made. Marketers making claims on websites should therefore ensure appropriate mechanisms were in place to update price claims wherever necessary. We understood that the amount of the joining fee bore no relation to the individual circumstances of the consumer, and were therefore satisfied that it could be calculated in advance of the consumer's interaction with the web page.
We acknowledged the possibility that, if current joining fees were quoted alongside each membership option, consumers seeing the price claims on one day could be quoted a different joining fee if they visited the club on a later date to enquire further about becoming a member. Whilst, in general, consumers were likely to understand price claims to relate to the cost of a product at the time that they were seen, we considered that the particularly variable nature of the joining fee price model could usefully be stated on the web page.
Because the monthly prices quoted on the web page were usually subject to the payment of a non-optional joining fee, but those price claims were not immediately qualified with a reference to the amount of the joining fee where one existed, we concluded that they were misleading and breached the Code.
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), and
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).
Action
The price claims must not appear again in its current form. We told Virgin Active Ltd to ensure that the first references to monthly membership prices were immediately qualified with a reference to the amount of the joining fee where one was payable.
