ASA Ruling on Virgin Media Ltd
Virgin Media Ltd
Bartley Wood Business Park
4 July 2012
National press, Television, Circular
Number of complaints:
A press ad, circular and TV ad for a telecoms company promoted a telecoms package.
a. The press ad was headlined "Free for 3 months on selected bundles" and text stated "Pick your mix of TV, broadband and calls". Four available bundles were described. The first, for TV and calls, stated "£7 a month". The second, for broadband and calls stated "£14.50 a month". The third, for TV, broadband and calls stated "£20 a month". The fourth, for a more inclusive bundle including TV, broadband and calls stated "£44.50 a month". Text below the four bundles stated "All prices are when you take a Virgin Phone line for £13.90 a month".
b. The circular stated "Dear Householder. Build your perfect bundle from £7 a month". Text included information about channels available. At the bottom of the letter, text stated "TV, broadband, calls and mobile. Pick 2, 3 or all 4. Prices from £7 a month". Small print below stated "Virgin Phone line required". Text at the end of the letter, in the small print, stated "VIRGIN MEDIA LINE RENTAL £13.90 A MONTH".
c. The TV ad featured Usain Bolt sitting at a desk and talking to the camera, he said "Hi, I'm Richard Branson and I want everyone to say 'bye-bye' to buffering and 'hello' to superfast broadband". A roundel appeared with text which stated "£5 a month". A voiceover stated "Right now, with Virgin Media, you could enjoy up to 30 Mb fibre-optic broadband and calls, for just £5 a month". On screen text stated "Cabled areas only. Subject to survey and compatibility. New customers only". The voiceover said "And with broadband that's 4 times faster than the UK average, everyone at home could be online at the same time… with fewer interruptions". On screen text stated "Up to 30Mb download speeds. Minimum contract. Virgin Phone line required". The voiceover continued "Which means we could all say 'bye-bye' to buffering". On screen text stated "Up to 30Mb broadband. Unlimited calls. £5 a month". The voiceover stated "So that's up to 30meg broadband and unlimited UK weekend calls, all for just £5 a month for the first 3 months and £18.50 after that". On screen text stated "That's 01, 02, 03 numbers. Installation fee applies. Direct Debit & eBill price. Details at virginmedia.com" "Offer ends 31/03/12".
18 complainants challenged whether the ads were misleading, because the cost of the Virgin phone line was compulsory, but was not included in the most prominently stated price.
CAP Code (Edition 12)
Virgin Media Ltd (Virgin) said they received CAP advice in respect of the positioning of the requirement for customers to pay line rental. They considered that ad (a), the press ad, was in line with the advice received, and included information in the body copy, and not in a footnote, which set out the requirement to take line rental and the price.
Regarding ad (b), the circular, they said that their usual practice was to include the line rental requirement and price within the first paragraph, e.g. "…you can get your first 3 months free with selected bundles when you take a Virgin phone line for £13.90 a month." They said they had re-briefed the relevant teams to ensure that this was included in future copy.
Regarding ad (c), the TV ad, they said the requirement to take a phone line was set out in the supers.
Accordingly, they believed that the extent of the commitment a consumer must make to obtain the advertised price was made clear. They said that, in addition, this was in line with standard industry practice. However, in light of the number of complaints about the ads, they accepted that the line rental pricing information should have been presented more prominently in at least some of the ads.
They said that line rental was a distinct product, rather than a non-optional charge. They said they had a number of customers who only paid for phone line rental and any usage-based call charges and some further customers who wanted a phone line purely for incoming calls, which they were able to get for the £13.90 monthly line rental fee, without having to take TV, broadband or any other services, and without being committed to any other payment. They added that, similarly, customers could choose to take standalone broadband and/or TV services without a Virgin phone line. They stated that if a customer chose not to take a Virgin phone line when they signed up to other Virgin services, the price of the other services might differ. They therefore considered that line rental was a conditional charge, rather than an intrinsic charge. They noted that CAP rule 3.21 and BCAP rule 3.23 allowed for conditional purchases where customers were required to buy other items in order to receive the product or service advertised at the relevant price.
Clearcast did not think the ad was misleading to the consumer. They said the voiceover talked about the broadband and the unlimited UK weekend calls and the discounted price only. They said the superimposed text then made clear that a phone line was required. They said that was standard practice for the industry and consumers were well aware of how those services worked and that if consumers signed up, the phone line cost would need to be added on to any deals they might take on.
THIS ADJUDICATION REPLACES THAT PUBLISHED ON 9 MAY 2012. THE WORDING OF THE ASSESSMENT AND ACTION SECTIONS HAS BEEN CHANGED BUT THE DECISION TO UPHOLD THE COMPLAINTS REMAINS, ALBEIT UNDER DIFFERENT RULES.
The ASA acknowledged that the cost of phone line rental was included in the body copy in ad (a) and in the small print at the end of the letter in ad (b). In ad (c), on screen text stated "...Virgin Phone line required" but did not specify the monthly cost. We noted that that line rental cost was not included in the monthly bundle price advertised at "£7 a month" in ads (a) and (b) and “£5 a month” in ad (c).
We understood that some consumers purchased line rental as a separate standalone service, for receiving incoming calls only, and therefore considered that line rental had a value associated with it in its own right, for which some consumers would generally expect to pay. On that basis, we considered that line rental was a non-optional, conditional service, as opposed to a charge with no intrinsic value which formed an inherent and inseparable part of the advertised bundled products, and did not need to be included in the overall price.
However, because line rental had some of the characteristics of a charge, we considered it was particularly important that its cost was stated sufficiently prominently. The line rental cost was not presented clearly alongside the most prominently stated bundle prices in ads (a), (b) and (c). In light of that, we considered that the ads did not make sufficiently clear the extent of the commitment consumers must make to obtain the advertised bundles and were therefore misleading.
We investigated ads (a) and (b) under CAP Code (Edition 12) rules 3.1, 3.3 (Misleading advertising), 3.17, 3.18 and 3.21 (Prices). The ads breached CAP Code (Edition 12) rules 3.1, 3.3 (Misleading advertising), 3.17 and 3.21 (Prices), but were not found in breach of 3.18 (Prices).
We investigated ad (c) under BCAP Code rules 3.1, 3.3 (Misleading advertising), 3.18, 3.19 and 3.23 (Prices). The ad breached BCAP Code rules 3.1, 3.3 (Misleading advertising), 3.18 and 3.23 (Prices) but was not found in breach of 3.19 (Prices).
The ads must not appear again in their current form. We told Virgin to ensure that the line rental cost was presented clearly alongside the most prominently stated bundle prices.
Mindful of this ruling’s impact on the industry, the ASA Chairman, on behalf of the ASA Council, granted a three month grace period for the sector to bring their marketing communications in to line with the requirements of the adjudication. The period of grace ends at midnight on 4 October 2012.
ASA/CAP will then take action against any marketing communications in breach of the position established by the adjudication.