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ASA Ruling on TalkTalk Telecom Ltd

TalkTalk Telecom Ltd t/a TalkTalk

11 Evesham Street
London
W11 4AR

Date:

9 July 2014

Media:

Direct mail, Internet (on own site)

Sector:

Computers and telecommunications

Number of complaints:

2

Complaint Ref:

A14-260109

Background

Summary of Council decision:

Three issues were investigated, all of which were Upheld.

Ad

A mailing, the website www.talktalk.co.uk and a press ad, promoted a broadband package.

a. The mailing stated "Britain's lowest priced totally unlimited broadband Just £2.50 a month plus line rental ... At TalkTalk we believe in saving you money all year round. That's why we're offering you Britain's lowest priced totally unlimited broadband package for just £2.50 a month plus £15.40 line rental. Make your home better off today and save up to £260 vs BT". Features of the package were listed in a box and included "Totally unlimited", "Britain's safest connection", "Free advanced wireless router" and "No calls package". The ad also included a graphic with text stating "SAVE UP TO £260 vs BT". Footnote text on the bottom of the reverse of the mailing stated "Britain's lowest priced totally unlimited broadband: 18 month cost comparison of standard online price of Simply Broadband (£2.50/month unlimited broadband, plus £15.40/month line rental, and 18 month min term) router: D-Link 3680 compared to BT Unlimited at £16/month, plus £15.45/month line rental, 18 month min term, £6.95 hub delivery (incl. unlimited wi-fi, weekend calls); Sky Broadband unlimited at £10/month plus £15.40/month line rental, 18 month min term and £2.18 router delivery (incl. weekend calls); Virgin Media Broadband unlimited at £25/month, 18 month min term. PlusNet Unlimited Broadband at 9.99/month plus £14.50/month line rental, 18 month min term and £5.99 router delivery Prices exclude new line installation and connection charges. Current BT online promotion: Half Price for 6 Months, BT Sport App & Online Player & £25 Sainsburys Gift Card. Current Sky online promotion: Half price for 12 Months & Free Sky Wireless Booster & £25 M&S Voucher Current Virgin Media online promotion: 5 off for 3 months then £25 thereafter. Current Plusnet online promotion: £7.49 off for 12 Months then 9.99 thereafter".

b. The website promoted the package "Simply Broadband" and stated "Britain's lowest priced totally unlimited broadband only £2.50 A MONTH + £15.40 monthly line rental". The page also featured a corner graphic that stated "SAVE £260 vs BT*". Further text mid-way down the page stated "Totally unlimited broadband at a permanently low price" alongside hyperlinked text which stated "See how we compare", and various competitors' logos. Upon clicking on that link, a pop-up appeared which featured a price comparison table setting out competitors' prices. Below the table, further text under the heading "The small print", stated "Price comparison uses standard online pricing only and excludes all promotions".

c. The press ad was headed "Britain's lowest priced packages from TalkTalk". The ad included a box which promoted "Totally unlimited broadband" at "£2.50 a month Plus £15.40 monthly line rental". The box also featured a graphic that stated "SAVE UP TO £260 vs BT". Footnote text stated "Britain's lowest priced packages from TalkTalk; Simply Broadband: 18 month cost comparison of Simply Broadband (£3.50/month unlimited broadband, plus £15.40 line rental, and 12 month minimum term) compared to BT Unlimited at £16/month, plus £15.99/month line rental, 12 month min term, £6.95 hub delivery (incl. unlimited wi-fi, weekend calls); Sky Broadband unlimited at £10/month plus £15.40/month line rental, 12 month min term and £2.18 router delivery (incl. weekend calls); Virgin Media Broadband unlimited at £25/month, 12 month min term. PlusNet Unlimited Broadband at 9.99/month plus £14.50/month line rental, 12 month min term and £5.99 router delivery. (Current BT online promotion: Half Price for 6 Months, BT Sport App & Online Player & £50 Sainsbury's Gift Card. Current Sky promotion: Half Price for 12 Months & £25 M&S Voucher. Current Virgin Media online promotion: £5 off for 3 months then £25 thereafter. Current PlusNet online promotion: £7.49 off for 12 Months then 9.99 thereafter.) Prices exclude new line installation and connection charges".

Issue

1. One complainant, who understood that a cheaper deal was available with a different provider, challenged whether the claim "Britain's lowest priced totally unlimited broadband", was misleading and could be substantiated in ad (a);

2. and ad (b);

3. BT challenged whether the claim "Britain's lowest priced packages from TalkTalk" in relation to TalkTalk's "Totally unlimited broadband" package, was misleading and could be substantiated, for the same reason.

CAP Code (Edition 12)

Response

1., 2. & 3.

TalkTalk Telecom Ltd t/a TalkTalk explained that the claim "Britain's lowest price", was based upon a comparison of standard online pricing on a like for like basis against competitor "unlimited" broadband packages. They stated that the comparative basis was clear in all ads and the claim true, as no other service provider had a lower priced package. They said in all their ads, they made clear that the comparison was based on standard pricing and excluded promotions, and they detailed the comparator packages. They said that information was typically in the first line of the small print of the ads and so it was the most prominent caveat line, which usually read "18 month cost comparison of standard online price of [TalkTalk Simply Broadband]". They highlighted that they had chosen to compare their usual prices to the usual price of competing products, but that, as their competitors ran many promotions, they ensured that the basis of the comparison was clear and the details of the relevant competitor promotions were always fully set out. They did not believe it was appropriate to compare their products against promotional prices, but instead thought that using a fixed standard price allowed transparency and ensured that consumers could measure the value of the package they were considering purchasing. They also highlighted that competitor promotions changed so rapidly that any comparison against a promotion would soon be out of date and then potentially misleading.

TalkTalk said checks and updates to their comparisons against competitors were made on a frequent basis as different ads were produced and released. They said standard online prices and promotions were checked on at least a weekly basis for any updates that might invalidate the claim. They provided examples of their latest comparison calculations, and a weekly document detailing the most recent competitor promotions.

With regard to the providers the complainant and BT had highlighted, which they believed offered a lower price, TalkTalk believed that both products were materially different as, unlike TalkTalk's package, both had traffic management policies in place that slowed down particular users. They also highlighted that both prices were promotional offers, and not the providers' standard prices, and so they did not consider that the packages were comparable. Finally, TalkTalk stated that they had been using the claim "Britain's lowest price" since November 2013 without previous challenge.

Assessment

1. Upheld

The ASA considered that, given the frequency at which prices fluctuated and the prevalence of promotional offers in the telecommunications sector, the fact the claim related to TalkTalk's and the selected competitors' standard prices was significant information which should have been clearly presented in the ad. We noted that footnote text at the bottom of the reverse of the mailing explained that the claim "Britain's lowest priced totally unlimited broadband" was based on TalkTalk's standard, non-promotional, price for an 18-month minimum-term contract for their Simply Broadband package, compared to the online, non-promotional prices of four competitors whose products were deemed equivalent. We considered, however, that that text was not sufficiently prominent, and that in the absence of any further explanatory text, most consumers would believe that, at the time the ad appeared, TalkTalk offered the cheapest unlimited broadband package in Britain, in comparison to both their competitors' standard and promotional prices. Because that was not the case, we concluded that the claim was misleading.

On that point, ad (a) breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising), 3.7 (Substantiation), 3.38 (Other comparisons) and 3.39 (Price comparisons).

2. Upheld

We noted that when the complainant viewed the web page, there was no additional text in either the body of the site, or in footnote text, to explain the basis of the comparison. Whilst we appreciated that further information regarding the competitors and specific products included in the comparison was available via the "See how we compare" hyperlink, we noted that information explaining that the claim was based on TalkTalk's and selected competitors' standard prices did not appear until the small print at the bottom of the pop-up page, and considered that a number of consumers might not click through to the comparison pop-up, let alone read the small print at the bottom of the page. Therefore, we considered that the information setting out the basis of the comparison was not prominent enough, and that consumers reading the claim would understand that, at the time the claims appeared, TalkTalk offered the cheapest package in comparison to their competitors' standard and promotional prices. Because that was not the case, we concluded that the claim was misleading.

On that point, ad (b) breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising), 3.7 (Substantiation), 3.38 (Other comparisons) and 3.39 (Price comparisons).

3. Upheld

We acknowledged that the ad had footnote text that set out the basis of the claim, including information relating to TalkTalk's and their competitors' standard online prices for a minimum-term contract. However, we considered that that text was not sufficiently prominent and that consumers reading the ad could easily overlook it and believe that, at the time the ad appeared, TalkTalk offered the cheapest broadband package in comparison to their competitors' standard and promotional prices. Therefore, we concluded that the claim was misleading.

On that point, ad (c) breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising), 3.7 (Substantiation), 3.38 (Other comparisons) and 3.39 (Price comparisons).

Action

The ads must not appear again in their current form. We told TalkTalk to make clear the basis of their comparisons in future, and to ensure that significant information relating to those comparisons was given sufficient prominence.

How to comply with the rules

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

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