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ASA Ruling on Virgin Media Ltd

Virgin Media Ltd

Media House
Bartley Wood Business Park
Hook
Hampshire
RG27 9UP

Date:

10 December 2014

Media:

Regional press, National press

Sector:

Leisure

Number of complaints:

1

Complaint Ref:

A14-265509

Background

The ASA received a complaint from BT about a series of ads that appeared in the period June 2013 to March 2014.

Summary of Council decision:

Three issues were investigated all of which were Upheld.

Ad

Five national press ads and a website for Virgin Media Ltd:

a. The press ad dated 13 June 2013 featured text that stated "Cut the cost of TV, broadband and calls (with our half price Collections) ... Don't forget to quote your half price code". The ad included a voucher that stated "Save £54 Starter Collection ... Half price for 6 months ... £9 a month for 6 months then £18 ... Cut out and call today ... ". Small print at the foot of the ad stated " ... Offer available until at least 30th June 2013 ... ".

b. The press ad dated 2 July 2013, which featured the same offer and was presented in the same format as ad (a), featured text in the small print that stated " ... Offer available until at least 31st October 2013 ... ".

c. The press ad dated 30 October 2013 was headed "Red Hot Sale". An icon beside the "Starter Collection" package information stated "£18 £10 a month for six months then £18 ... ". Further text stated "Don't miss out on these sizzling savings". Small print at the foot of the ad stated "... Offer available until at least 5th January 2014 ...".

d. The press ad dated 13 January 2014 was headed "January Sale". An icon beside the "Starter Collection" package information stated "£20 £10 a month for six months, then £20 ... ". Further text stated "Don't miss out on these sizzling savings". Small print at the foot of the ad stated "Offer available until at least 26th February 2014 ... ".

e. The website, www.virginmedia.com, viewed on 27 February, featured text on the home page that stated "Last chance to get 6 months Netflix on us! Hurry - must end 27th February". Further text stated "The UK's lowest price for fibre optic broadband, TV & calls Plus NETFLIX free for 6 months - must end 27th February". An icon beside the "Starter Collection" package information stated "£20 £10 a month for six months ... ". The terms and conditions for the offer stated "Offer available until at least 5 January 2014 ... ".

f. The press ad dated 10 March 2014, was headed "Red Hot Sale now on". An icon beside the "Starter Collection" package information stated "£20 £10 a month for six months, then £20 ... ". Further text stated "Don't miss out on these sizzling savings". Small print at the foot of the ad stated " ... Only available until at least 30th June 2014 ... ".

Issue

BT challenged whether:

1. the savings claims in the ads were misleading and could be substantiated, because they understood that new customers had not been charged the higher reference prices of £18 and £20 per month for the 'Starter Collection' on initial registration in the previous nine months;

2. the ads were misleading, because they understood that Virgin had extended previous offers relating to its 'Starter Collection'; and

3. the ads were misleading, because the claim "Offer available until at least ..." did not make the closing dates sufficiently clear.

CAP Code (Edition 11)

8.17.4a

CAP Code (Edition 12)

Response

1. Virgin Media Ltd said they offered a number of time limited discounts to new customers. They said those discounts were for a period of three, six or 12 months dependent on the service being offered.

Virgin Media said the higher reference prices, referred to in the ads, had been paid by various customers and therefore believed the higher reference price had been established. They said that, in addition to offering services at discounted rates, they sold their collections, including the 'Starter Collection' at full price to customers who signed up to a 12-month contract. They therefore said there were always new customers signing up to the 'Starter Collection' at the full price, which they believed established the non-discounted monthly price. They said all existing customers, outside of the time limited discount period, were establishing the price of the service by paying the full amount and that existing customers who upgraded their service or switched from one package to another were not entitled to the time limited discount and would pay the full price.

Notwithstanding their belief that the higher reference price had been established by customers paying that price, they believed the presentation of the price comparisons was not misleading. They said the ads did not display a comparison against Virgin Media's previous selling price; rather they were a comparison against the price that a customer would pay at the end of the discounted period.

They said the BIS Pricing Practices Guidance established that a price against which a savings claim was made must be a genuine selling price and that the information provided to customers regarding the calculation of the price comparison should be clear and not misleading. They believed the ads satisfied both criteria.

2. Virgin Media Ltd believed an ad was not misleading purely because an offer had been extended. They said that the ads did not make the same offer and pointed out that there were price differences between the advertised offers. They also said that ad (e) differed because it was for an amended "Starter Collection" package that included a six-month subscription to Netflix.

3. Virgin Media said the claim "Offer available until at least" was not intended as a definitive end date for the offer shown in the ads, rather it was intended to communicate that the services advertiser could be purchased for the advertised price until at least the date shown. They said the statement was intended to avoid disappointment on the part of customers who attempted to purchase the services after the price or "Starter Collection" had been amended.

Assessment

1. Upheld

The ASA noted ads (a) and (b) stated prominently "Save £54". They also stated "Don't forget to quote your half price code", "Cut out and call today" and "Half price for 6 months". Ad (c) stated "Red Hot Sale" "Don't miss out on these sizzling savings"; ad (d) stated "January Sale" and "Don't miss out on these sizzling savings"; ad (e) stated "Last chance to get 6 months Netflix on us! "; and ad (f) stated "Red Hot Sale now on" and "Don't miss out on these sizzling savings". In that context, we considered consumers would understand each ad to mean that the advertised offer was a time limited promotion.

We noted Virgin Media's view that the ads made clear that the saving related to a comparison with the price that consumers would pay for the package after a period of six months. However, that information was given less prominence than the quoted prices and savings claims, such as, "Save £54" in ads (a) and (b), "Red Hot Sale" in ad (c), "January Sale" in ad (d), "Last chance to get 6 months Netflix on us!" in ad (e) and "Red Hot Sale now on" in ad (f). We considered the overall impression of the ads was that the lower price applicable to the first six months of the contract represented a saving by comparison to the price paid by new customers who signed up to the advertised Starter Collection.

We noted Virgin Media's belief that the higher reference prices had been established by customers paying those prices for the Starter Collection. We understood that the higher reference price was paid by customers who chose to sign up to a 12-month contract. However, the advertised offer related to a minimum contract of 18 months. We therefore considered the higher reference price had not been established through customers paying that price for the Starter Collection with a shorter contract.

We understood that all existing customers, outside of the time limited discount period paid the higher reference price and that existing customers who upgraded their service or switched from one package to another paid the higher reference price. However, the ads were targeted at new customers and presented the savings claims as relating to the price paid by new customers who signed up to the advertised Starter Collection. In that context, we considered the fact that existing customers would pay the higher reference price was not sufficient to establish the higher reference prices quoted in the ads.

Because we had not seen evidence that new customers had paid the higher reference prices of £18 and £20 per month for the advertised 'Starter Collection' on initial registration, we considered the higher reference prices had not been established sufficiently. We therefore concluded that the presentation of the advertised offers was misleading.

On this point, ads (a), (b), (c), (d), (e) and (f) breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising), 3.17 (Prices) and 3.40 (Comparisons).

2. Upheld

Ads (a) to (f) formed a sequence of promotions of the "Starter Collection", which included TV with TiVo, broadband and calls. As noted in point 1, we considered consumers would understand the presentation of the ads to mean that the advertised offers were time limited promotions. The initial ad − ad (a) − referred to by BT, offered the Starter Collection for £9 a month for 6 months before increasing to £18 per month for the remainder of the contract.

Ad (b) offered the Starter Collection on the same terms as ad (a) and therefore extended the offer promoted in ad (a). We therefore considered the significant saving promoted in ad (a) encouraged consumers to make a transactional decision within a limited time period, despite the subsequent offer being the same.

Ad (b) featured prominent text that stated 'Save £54' and further text that stated 'with our half price Collections'. In that context, we considered consumers would interpret the ad to mean that the advertised offer was available at a reduced, promotional price for a time limited period, after which it would return to a full, non-promotional price, without a saving of £54. However, we understood that the subsequent offer did not return to a full, non-promotional price. We therefore considered the presentation of ad (b) was likely to mislead consumers.

Ad (c) was headed "Red Hot Sale" and included prices that had been crossed out and replaced with lower prices. In that context, we considered consumers would interpret the ad to mean that the advertised offer was available at a reduced, promotional price for a time limited period, after which it would return to a full, non-promotional price, without the saving quoted in the ad. However, we understood that the subsequent offer did not return to a full, non-promotional price. We therefore considered the presentation of ad (c) was likely to mislead consumers.

Ad (e) offered the Starter Collection and Netflix for six months on the same terms as ad (d). We considered ad (e) denoted an extension of the offer in ad (d). We therefore considered the prominent promotion of a "January Sale" in ad (d) encouraged consumers to make a transactional decision within a limited time period, despite the subsequent offer being the same.

Ad (f) offered the Starter Collection for £10 a month for six months before increasing to £20 per month for the remainder of the contract. Unlike ad (e), the Starter Collection offered in ad (f) did not include Netflix for six months. Ad (f) offered a Starter Collection that included a broadband service with up to 50Mb; ad (e) included a broadband service with up to 30Mb speeds. We understood that, at the time ads (e) and (f) appeared, the broadband service offered was the entry-level broadband service offered by Virgin Media and that, at the time ad (f) appeared, all existing Starter Collection customers were either upgraded to, or in the process of being upgraded to the 50 Mb service. We therefore understood that those customers who had signed up to the Starter Collection offered in ads (a) to (e) would receive the same broadband services as those customers who had signed up to the Starter Collection offered in ad (f). We therefore considered the Starter Collection offered in ads (e) and (f) was the same.

Ad (e) promoted the opportunity for customers to receive Netflix free for six months and made clear that that offer would end soon. We therefore considered the ad encouraged consumers to make a transactional decision within a limited time period. We understood that Virgin Media's subsequent offer included the same Starter Collection, but did not include Netflix free for six months. We therefore considered the promotion of the advertised offer of the Starter Collection with Netflix free for six months, in ad (e), as time limited was not likely to mislead consumers on this specific point of complaint.

We considered ads (a), (b), (c) and (d) encouraged consumers to make a transactional decision within a limited time period. However, ads (a) and (d) were followed by offers that were the same and ads (b) and (c) were followed by offers that did not revert to a full, non-promotional price, as the ads implied. In that context, we considered ads (a), (b), (c) and (d) were likely to mislead consumers.

We considered ad (e) promoted the Starter Collection with Netflix free for six months as a time limited offer. We understood that the subsequent offer made by Virgin Media did not include Netflix free for six months. We therefore considered the promotion of the advertised offer in ad (e) as time limited was not likely to mislead consumers on this specific point of complaint.

On this point, ads (a), (b), (c) and (d) breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising) and 3.17 (Prices). We investigated ad (e) under CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising) and 3.17 (Prices) but did not find it to be in breach on this point.

3. Upheld

As noted in point 1, we considered consumers would understand the ads to mean that the advertised offers were time limited promotions. The small print in ads (a), (b), (c), (d) and (f) stated "Offer available until at least ... ". However, we considered that wording was ambiguous and did not make the duration of the advertised offers clear, particularly in the context of ads that included prominent text that implied the offer was time limited. We therefore considered that the text "Offer available until at least ...", in those ads, did not make the closing dates sufficiently clear by when consumers would need to respond to the ad.

Ad (e) stated "Last chance to get 6 months Netflix on us! Hurry - must end 27th February " and "Plus NETFLIX free for 6 months - must end 27th February". We therefore considered the text in the body of ad (e) made clear that the promotion would end on 27 February.

For the reasons given, we concluded that ads (a), (b), (c) and (d) breached the Code on this point of complaint, but ad (e) did not.

On this point, ads (a), (b), (c), (d) and (f) breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising) and 8.17.4.a (Significant Conditions for Promotions). We investigated ad (e) under CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising) and 8.17.4.a (Significant Conditions for Promotions), but did not find it to be in breach.

Action

The ads must not appear again in their current form. We told Virgin Media Ltd to ensure ads did not mislead consumers about the time limited nature of advertised offers. We also told Virgin Media to ensure that closing dates were made sufficiently clear and to ensure that savings claims were not likely to mislead consumers.

How to comply with the rules

For advice and training on the Advertising Codes please visit the CAP website.

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