Background
Summary of Council decision:
Two issues were investigated both of which were Upheld.
Ad description
A website for an iPhone unlocking service, www.officialiphoneunlock.co.uk, stated "Having made payment, we process your IMEI within Apple's iTunes database by marking it as unlocked ... Don't forget we offer a 100% no quibble money back guarantee". The web page also included a function that allowed consumers to enter their iPhone model and the location and network the handset was currently locked to, in order to see how much it would cost. When the iPhone 4S was selected and locked to the Orange UK network the price stated "19.99 Unlock available again soon, pre-order unlock now to get in the queue for immediate delivery". Terms and conditions stated "We offer pre-orders for unlocks - this is a service where you get placed on a mailing list in order to get notified about when an unlock and/or pricing changes are available for your network. It is NOT an unlock order. The unlock order will require an additional purchase, although we will deduct the amount you paid for the pre-order". It also stated ""Pre-orders" are not covered by our money back guarantee. You are paying to be placed on our mailing list service. If, however, you manage to unlock your iPhone with an alternative IMEI unlock service prior to ours resuming, we will refund you in full".
Issue
The complainant challenged whether:
1. the price displayed when the phone model and network and location was selected was misleading, because it was a "pre-order" fee and the final price could exceed this by between £29 and £119; and
2. the claim "Don't forget we offer a 100% no quibble money back guarantee" was misleading, because it did not clarify that the "pre-order" fee was excluded from this guarantee.
Response
1. Official iPhone Unlock Ltd (Official iPhone Unlock) referred to a page on their website which they said clearly explained what a pre-order was and made clear which unlocks were on a pre-order and which were currently available.
2. Pre-orders were clearly marked on the pricelist page which stated "Please note that pre-order means that those unlocks are currently offline whilst we are in negotiations to confirm a price with the carrier and Apple. Hence why the price is always £19.99 + VAT. Expect a final price for pre-orders between £29 and £119." Their terms and conditions provided information on refunds for pre-orders.
Assessment
1. Upheld
The complainant submitted correspondence from Official iPhone Unlock, in response to his query to them about the pre-order fee and no quibble money-back guarantee. It stated "If you go to the FAQ's page it states A pre-order simply means that those unlocks are currently offline whilst we are in negotiations to confirm a price with the carrier and Apple. Hence why the price is always £19.99. Please note this isn't the final unlocking price which may be substantially more expensive - see the pricelist for typical unlock prices, they vary between £29 and £119 so expect something in this region ... You can of course wait for the cheaper service which should be resuming in April/May, or you can transfer the cost towards a different unit. Yes we can cancel for you but unfortunately as per our terms and conditions we can't refund a pre-order as the service has been delivered (informing about when the unlock is available and a place reserved in the priority unlocking queue)".
The ASA considered Official iPhone Unlock's response to the complainant suggested that £19.99 was a pre-order fee and that the final unlocking price for the phone varied between £29 and £119. The ad stated "Having made payment, we process your IMEI within Apple's iTunes database by marking it as unlocked, and then email you when its [sic] done ... £19.99 Unlock available again soon, pre-order unlock now to get in the queue for immediate delivery". We considered consumers would understand from this that payment of "£19.99" would put them in a queue that would unlock their phone, however we understood this was not the case and that further payment would be required. Because the stated price did not relate to the advertised service, we concluded that it was misleading.
On this point the price breached CAP Code (Edition 12) rules
3.1
3.1
Marketing communications must not materially mislead or be likely to do so.
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.
and
3.4.3
3.4.3
the price of the advertised product, including taxes, or, if the nature of the product is such that the price cannot be calculated in advance, the manner in which the price is calculated
(Misleading advertising),
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
3.17
3.17
Price statements must not mislead by omission, undue emphasis or distortion. They must relate to the product featured in the marketing communication.
(Prices)
2. Upheld
The ad did not make clear that some prices were pre-order fees only and that further payment was required to complete the unlock. In that context, we considered consumers would understand from the claim "Don't forget we offer a 100% no quibble money back guarantee" that a refund of any payments would be issued to them if they were not satisfied with the service. Because Official iPhone Unlock did not clarify that the "pre-order" fee was excluded from this guarantee, we concluded the claim was misleading.
On this point the claim breached CAP Code (Edition 12) rules
3.1
3.1
Marketing communications must not materially mislead or be likely to do so.
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
3.9
3.9
Marketing communications must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify.
(Qualification).
Action
The claims must not appear again in their current form. We told Official iPhone Unlock to ensure their price statements clearly related to the advertised service. We also told them to make clear that their money-back guarantee did not apply to pre-order fees.
