The Carphone Warehouse Group plc t/a Talk Talk Telecom Ltd Support Centre 1 Portal Way London W3 6RS Number of complaints: 1

Date: 12 December 2007 Media: Brochure Sector: Computers and telecommunications Agency: WDMP Ltd

Ad
A brochure ad, for TalkTalk, was headed "FREE Broadband" and claimed " ... This year, why not join our Talk3 call plan and get up to 8 Meg (speed depends on proximity to exchange) broadband free!  All you pay is £8.99 per month plus TalkTalk line rental at £11 per month (the same as you'd pay BT)".  A footnote stated "When you take calls, broadband and line rental together there is a minimum contract term of 18 months".

Issue
British Telecommunications plc (BT) believed the claim "FREE Broadband" was misleading, because the minimum term contract on the pre-existing Talk 3 call plan was 12 months, whereas the contractual period for 'Talk 3 with free broadband' was 18 months; the package advertised involved an increased burden on the consumer than that previously offered and was, therefore, classed as a new package of which broadband was an intrinsic, not free, element.

The CAP Code:

7.1;32.3

Response
TalkTalk (TT) pointed out that, prior to the launch of free broadband with Talk 3, provision had been made in TT's terms and conditions for a reasonable length of time, which clarified that a contract with a minimum period of 18 months applied to customers taking calls, line rental and broadband together.  TT submitted a copy of their terms and conditions from April 2006 to show that the provision had been in place seven months prior to the launch.  

They argued that the minimum period was not in any way dependent on any particular charge applying or not applying and pointed out that, conversely, customers did not become subject to a longer minimum period simply because one of the services (broadband) became free.  

TT explained that, after the launch of the broadband promotion with Talk 3, providing the customer was in an unbundled area (an area where BT had made its network available to other providers), or an area scheduled to be unbundled, an existing Talk 3 customer could opt in to the promotion to take calls and line rental with Talk 3 at £8.99 per month plus free Local Loop Unbundling (LLU) broadband, providing they signed up for a new 18-month minimum term.

TT clarified that from April 2006, following the introduction of their LLU service, customers who were in an area of a local exchange which was not due to be unbundled could take calls, line rental and broadband from TT, with the broadband element subject to a charge of £10. They said this charge applied because the broadband was provided through a non-LLU service supplied to TT by a third party provider. Under those circumstances, a customer could take and pay for the broadband service only as part of a bundle with calls and line rental, which, in accordance with the terms and conditions that had been in place since April 2006, was subject to a contract with a minimum term of 18 months.

TT pointed out that, prior to the launch of free broadband with Talk 3, and in accordance with a previous ASA adjudication, they had sought guidance from the CAP Copy Advice team on the ad.  They believed, therefore, the ad was compliant with the CAP Code and ASA guidelines and did not mislead.  They said, apart from this complaint from BT, they received no other complaint.

TT added that free broadband with Talk 3 was no longer available to new or existing customers; the free promotion ended after six months.

Assessment
Upheld
The ASA understood that, before the introduction of TT's 'free' broadband element on Talk 3, customers were able to select a combination of services, which included line rental, a call plan and broadband, with the broadband element being supplied either through TT's LLU service or from another provider, and that customers could qualify for that combination of services only if they subscribed to a contract with a minimum 18-month term.  We noted that provision had been in place for at least six months prior to the launch of Talk 3 with 'free' broadband.  

We also noted, however, prior to the launch of the 'free' broadband element, Talk 3 customers who selected only line rental and a call plan from TT were subject to a minimum term contract of three months, whereas the package offered in the ad, Talk 3 with 'free' broadband, involved a minimum term contract of 18 months from the date of commencement, or, in the case of existing customers, upgrade.

We recognised that customers would be made aware of the terms of any contract they embarked upon prior to acceptance.  We also understood that TT had sought advice prior to the ad's publication and had used the term "free" in good faith.  We considered, however, that in order to describe the broadband element added to Talk 3 as "free", TT would have to be able to demonstrate that they had added it as an extra element to an existing product at no extra cost or burden on the consumer.  Because the contractual agreement of 'Talk 3 with free broadband' was more onerous than that of its call plan only predecessor Talk 3, we considered that that package should be classed as 'new'. The broadband element was, therefore, an intrinsic element of a new package with an 18-month contract obligation. We concluded, therefore, despite the fact that broadband had been available separately at an extra cost in combination with Talk 3 beforehand, and that combination had a contractual period of 18 months, because TT had not demonstrated that they had added broadband to their existing product Talk 3, but had instead launched a new package of which broadband was an integral part, the broadband element of the new Talk 3 package was not 'free' and the ad was likely to mislead.  

The ad breached CAP Code clauses 7.1 (Truthfulness) and 32.3 (Free offers and free trials).

Action
We told TT to ensure that, in future ads or promotions, the use of "free" was appropriate.  We advised them to seek guidance from the CAP Copy Advice team before making similar claims in future.


Adjudication of the ASA Council (Non-broadcast)