Note: This advice is given by the CAP Executive about non-broadcast advertising. It does not constitute legal advice. It does not bind CAP, CAP advisory panels or the Advertising Standards Authority.
Rule 3.18 of the CAP Code states that quoted prices must include non-optional taxes, duties, fees and charges that apply to all or most buyers. However, VAT-exclusive prices may be given if all those to whom the price claim is clearly addressed pay no VAT or can recover VAT. Such VAT-exclusive prices must be accompanied by a prominent statement of the amount or rate of VAT payable.
If it is not possible to include a charge in the quoted price, for example, a delivery charge that depends on the number of items ordered, the charge should be stated prominently (Rule 3.20). If it is not possible to calculate the charge in advance, for example because it depends on the consumer’s circumstances, the advertisement must make clear that the charge is excluded from the advertised price and state how it will be calculated (Rule 3.19). The ASA does not ask for all compulsory charges to be included in prices: one-off and periodic charges may be presented separately. Rule 3.21 states that, if the price of one product depends on another, marketers must make clear the extent of the commitment the consumer must make to obtain the advertised price. It allows for promotional offers such as “Buy one get one free” and messages such as “Become a member for £12 a month and get 20% off our usual ticket prices”. Rule 3.21 applies when the prices relate to separate products that have value in their own right for which consumers would generally expect to pay. Charges that have no intrinsic value and are inseparable from the advertised product must be included in the advertised price.
In 2013, the ASA examined a complaint about an administration fee that did not appear next to price listings on an estate agent’s website; the fee depended on the location of the property as well as the consumer's individual circumstances. Although it accepted that the fee was not always calculable in advance, the ASA ruled that the ads should have indicated clearly that the administration fee was not included in the quoted prices and should have provided enough information to allow the consumer to establish easily how further charges would be calculated. Because the ads did not include this information, the ASA concluded that they had breached rule 3.19 of the Code (Your-move.co.uk Ltd, 6 March 2013).
Marketers who advertise prices that are available only to consumers who buy another, separate, product should ensure that the prices of both items are stated clearly. For example, in 2012 the ASA ruled that the price of line rental should be clearly stated alongside the most prominent price claim for other telecoms services if consumers are required to take line rental from the marketers (Virgin Media Ltd, 4 July 2012). More details are given in this, and the ‘Prices’, section but, in brief, examples of where advertisers have fallen foul of the Code for omitting or misleadingly presenting compulsory charges include: a promoter who charged a competition winner £140 for the delivery of her prize (3D Cakes, 11 April 2012); the quotation of an annual price when consumers had to buy the product for a minimum of two years (Webfusion Ltd, 13 July 2011); the introduction of a minimum spend requirement (Axis Telecom Ltd, 14 October 2011); a complaint about a holiday supplement of £386 which was not disclosed at the time of booking (Page & Moy Ltd, 7 December 2011) and complaints about a compulsory online check in charge (Ryanair Ltd, 27 April 2011). Marketers are reminded of the need for transparency when quoting prices.