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.
Following the deregulation of the gas and electricity industry, the ASA upheld many complaints against utilities marketers who had made misleading price statements or price comparisons.
Savings claims (General)
Savings against a competitor’s price
Dual fuel offers
Regional/local suppliers
Switching Sites
The following advice relates to the key areas that marketers should be mindful of:
Savings claims (General)
Savings claims should not exaggerate the availability or extent of any benefits likely to be attained by consumers. Additionally, claims should be qualified, where necessary, to refer to the conditions that affect it.
Advertising claims that state or imply that all consumers will save are unlikely to be acceptable if consumers do not achieve that saving. This is even if a qualification to that effect is made elsewhere in the marketing. This is because the qualification would likely contradict the overall impression given by the ad (Rule 3.9).
Marketers would also need to be mindful of the prominence of any qualifying claims to ensure they can easily be read and understood in the medium in question (Rule 3.10).
Savings against a competitor's prices
Comparisons should not mislead or be likely to mislead. Marketers making tariff comparisons should assume that customers act rationally when selecting the best service available to them. When comparing, they should compare their tariff with their competitor's equivalent or most similar tariff; normally based on frequency of payment, payment method, dual fuel discount (where applicable) and tariff ''bands''. It is acceptable to compare dissimilar tariffs only if it is stated prominently that the competitor offers a tariff cheaper than that featured.
Marketers are reminded that they would need to hold documentary evidence to support the claims being made in the comparisons and that comparisons against identifiable competitors need to be verifiable
See CAP Advice on Comparisons: General, Comparisons: Identifiable competitors and Comparisons: Verifiability.
Dual fuel offers
Marketers who offer savings to customers dependent on the supply of more than one type of fuel should clarify this prominently; they should not imply that customers taking only one type of fuel can benefit from those savings when that is not the case.
Regional/local suppliers
If marketers refer to either themselves or their competitors as the regional/local/existing supplier, they should supply a reasonable proportion of consumers at whom the marketing is directed
Switching Sites
Marketing communications should not mislead by omission or otherwise in relation to the nature of a switching site. Special care should be taken with the use of claims such as “Independent” and “Comprehensive.” The presence of a commercial relationship between a switching site and a provider does not necessarily preclude descriptions of such a site as impartial or independent unless the commercial relationship influences the recommendations made by it. To legitimately claim that a site is comprehensive it should compare all of the prices available at any given time
See also entry on: Claims that require qualification and Prices