Ad description
An email sent on 7 June 2016 by UK Energy Watch Ltd, a company offering free LED replacement lighting, had the subject line “Fully Funded LED Lighting - Save up to 80% on energy costs”. Text within the body of the email stated “UK Energy Watch are pleased to offer your business a FREE replacement of the lighting across your office, property or estate, helping you to reduce your electricity bill by up to 80%. Our LED lighting is installed with ZERO capital outlay. There is no survey fee, no admin or setup costs. Free LED lighting is a fully funded flexible lease to suit your cash flow needs, where you choose the term”. It went on to state “What have you got to lose? It costs you nothing. You never get a bill from us. Challenge UK Energy Watch to reduce your bills …”.
Issue
The complainant, who enquired about the offer, challenged whether the ad was misleading because they understood that costs were, in fact, payable.
Response
UK Energy Watch Ltd (UKEW) explained that the advertised offer meant they changed all of the customer’s existing lighting to LEDs. Once that replacement had been completed, they then restructured the amount that the customer paid for the lighting element of their electricity usage. They provided the following example: if a customer had been using £500 per month of electricity and, as a result of their new LED lighting, their usage reduced to £200 per month; that change led to a saving of £300 per month.
UKEW said that, on average, two-thirds of that saving was used to cover the cost of the LED lighting upgrade they had undertaken, the cost of which was normally spread over a period of up to 5 years. After that period, they said that the lighting upgrade was fully paid for and therefore, at that time, the customer began to benefit from not only a reduced electricity payment but also the full amount of savings on their electricity payments. As a result, they said the customer was better off because they had a new LED lighting, a reduced energy bill and no maintenance, which they said was the same model as the government’s ‘Green Deal’.
UKEW believed their advertising accurately reflected how the scheme worked because they felt it was true that the customer did not pay for the installation. Rather, what they did was to restructure an existing outgoing that the customer already had, made them an immediate cost saving as well as giving them a larger, long-term cost saving.
Assessment
Upheld
The ASA considered claims in the ad such as “Fully Funded LED Lighting”, “FREE replacement of the lighting across your office”, “Our LED lighting is installed with ZERO capital outlay. There is no survey fee, no admin or setup costs. Free LED lighting …” and “It costs you nothing. You never get a bill from us” were likely to be understood by a trader to mean that they would not incur any costs when taking up UKEW’s offer of free replacement LED lighting.
We considered marketing communications should not describe a product or service as “free” if the consumer – in this case, a trader – had to pay anything other than the unavoidable cost of responding to the offer and collecting or paying for delivery of the item. We understood that, while there was no initial outlay, traders were required to repay the cost of the installation of the lighting over a set time period. We understood further that those repayments were to be taken from the “savings” seen in the trader’s energy bills following the installation of the LED lighting system.
We considered that the condition that traders would have to pay for the LED lighting installation, albeit in monthly instalments over a set time period, was information likely to affect their decision to take up the offer. In its absence, we considered the ad was likely to mislead traders. Moreover, we considered that requirement contradicted UKEW’s claims that the replacement lighting was “free”. We therefore considered it was misleading to describe the LED replacement lighting as free. For those reasons, we concluded the ad breached the Code.
The ad breached CAP Code (Edition 12) rules
3.1
3.1
Marketing communications must not materially mislead or be likely to do so.
and
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).
Action
The ad must not appear again in its current form. We told UK Energy Watch Ltd not to describe the scheme as “free” and to ensure that ads for the scheme made clear significant conditions.
