The website www.opodo.co.uk promoted an online travel agent and provided facilities for consumers to search for and purchase flights. A search results page viewed on 14 January 2015 displayed prices for the various options from London to Mumbai, which consumers could then purchase.
The complainant challenged whether the ad was misleading, because the prices displayed included a pre-applied discount that was only available for those paying via Entropay, a pre-paid visa card.
Opodo Ltd said their aim was to offer consumers the best travel and flight availability and the most competitive prices. They said, to their price-sensitive customers, what mattered most was the best price for the flights on offer. They believed that their pricing was open and transparent and instantly told consumers what the full and final price was for each flight that matched their chosen criteria.
They said the final price to be paid by consumers comprised the cost of the flight, taxes, Opodo's service charge and the cost of the payment method. They said the final price varied depending on the payment method used because the use of any particular payment method was passed on to consumers. They said in appropriate cases that included a discount applied to the service charge.
They said the search facility on the home page offered consumers the ability to specify the payment method or to ask to see the cheapest payment method. They said consumers saw, by default, only four fields: destination, dates, passenger age and payment method, with an additional option to tick for direct flights and another to extend their search criteria. They said the reason payment method was one of the four search criteria was so that consumers could be certain as to the final price they would have to pay for every flight that corresponded with their search criteria.
They said the first results page of a search would include explanatory text detailing any service charges and other fees that were included in the price. They said that information was included below each flight result, and that consumers were told against each result that they could calculate the price for other payments, without having to return to the home page. They said that a similar recalculation facility was available on the payment page, and consumers could therefore amend the method of payment at that stage. They also said that the price consumers would be asked to pay on the payment page would be identical to the price displayed in the chosen flight result on the search results page, and that there were no hidden extras or last-minute additions. They said bank charges were applied in some form or other to all types of credit card payment methods and that Entropay card fees were not paid to Opodo.
Opodo said if consumers carried out a search with the "Cheapest method" selected, the search results would show the cheapest payment method, which might be as a result of a discount applied to the service charge by Opodo. They said on the first results page, the explanatory text for each listing detailed service charges and specified to consumers whether a discount applied and, if so, any conditions associated with that promotion. They said consumers were explicitly told: how to select and view other options; that the offer applied to a particular card, which might be Entropay or others depending on the circumstances; and that the offer might be limited, and what those limitations were.
They said their charges for the use of particular payment methods did not exceed the cost borne by Opodo for each particular means of payment (in compliance with the Consumer Protection (Payment Surcharges) Regulations 2012), and that, although those regulations did not refer to discounts, they had followed the suggestions given by guidance issued by the Department of Business Innovation and Skills in 2013. They said that they had also discussed with the Civil Aviation Authority (CAA) how their prices should be shown, culminating in an undertaking from Opodo to the CAA in 2014. They understood that the CAA had no outstanding issues with Opodo in connection with their website or advertising.
Notwithstanding that, they acknowledged that the claim “Cheapest method” in the drop-down menu could suggest to consumers that a search would result in the payment method which was the cheapest for them to use, rather than the cheapest price on the website, and were willing to make changes on that basis.
The ASA acknowledged Opodo’s acceptance of the potential for the “Cheapest method” claim to mislead and welcomed their willingness to make changes to their advertising.
We noted that the Opodo home page included a drop-down menu for "Payment method", for which the default setting was "Cheapest method". At the time the ad appeared, choosing that option would always return a price using “Entropay” as the payment method.
We noted the payment method option was less prominent than the other search options on the home page, which we considered meant consumers could inadvertently choose that method of payment. Those who did so would assume the price displayed on the results page would be for a debit card, unless it was made immediately clear that that was not the case. We considered that those consumers who deliberately chose from the payment options were likely to leave the menu defaulted to the cheapest method of payment, especially given Opodo's comment that the best price of the flights on offer was most important to their customers. Consumers would not know from the information provided on the home page what payment method that "cheapest" option related to, but we considered that they would expect that it would return the payment method result which would cost them the least to use.
We considered that in either case, consumers were likely to be concerned foremost with the final amount payable by them when considering price claims. Details of any costs charged by third parties relating to the payment method were therefore likely to be material information which they would need in order to make an informed decision, particularly given the fact that the prices displayed were shown as the result of a search for the cheapest method of payment.
We understood that an Entropay card was a virtual visa card for which consumers were required to register, providing their personal data, and which funds had to be loaded onto before it could be used. We understood that the fee for loading funds onto an Entropay card from a credit or debit card was 4.95%, or 3.9 3.9 Marketing communications must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify. % via a bank transfer.
It would therefore be material to consumers to know that they would be charged for pre-loading the card, and how much that charge would be. We noted that text under each flight result stated, “… The best price available includes a discount and is available when paying with Entropay …”. However, no information about the rate payable amount of the fees was presented either on the home page or on the results page. We therefore considered that the omission of Entropay’s fees was likely to mislead consumers.
We also considered that consumers were likely to understand from the "Cheapest method" claim on the home page that the payment method returned from that search would be the one which would cost them the least overall. However, we considered that the proportion of consumers with an existing Entropay account was likely to be small, and of those who did have an account, the proportion who would already have funds pre-loaded onto the card was in turn likely to be small. Therefore, the average consumer was unlikely to be able to purchase a flight at a stated Entropay price without incurring the additional cost of loading funds onto the card.
We understood that there were instances where adding the Entropay fee onto the total price would mean that it would not be the cheapest payment option for the consumer. Because the charges for pre-loading the card meant that, in effect, it was not the cheapest payment method in those instances, we considered that the claim “Cheapest method” was misleading.
We noted in addition that Opodo had provided undertakings to the CAA in 2014 concerning the price transparency requirements of the Consumer Protection from Unfair Trading Regulations 2008 and of Regulation EC No 1008/2008 on common rules for the operation of air services in the Community, in relation to the layout of the website, including the existence of the "cheapest method" option in the drop-down menu. We understood, however, that those discussions had not taken into consideration the fees charged by Entropay to add funds to the 'card'.
Because the omission of the amount of the Entropay fees was likely to mislead consumers, and because in some instances the existence of those fees meant that the claim “Cheapest method” was likely to mislead, we concluded that the ad breached the Code.
The ad breached CAP Code (Edition 12) rules
Marketing communications must not materially mislead or be likely to do so.
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. and 3.4.3 3.4.3 the price of the advertised product, including taxes, or, if the nature of the product is such that the price cannot be calculated in advance, the manner in which the price is calculated (Misleading advertising), 3.9 3.9 Marketing communications must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify. (Qualification), and 3.17 3.17 Price statements must not mislead by omission, undue emphasis or distortion. They must relate to the product featured in the marketing communication. and 3.19 3.19 If a tax, duty, fee or charge cannot be calculated in advance, for example, because it depends on the consumer's circumstances, the marketing communication must make clear that it is excluded from the advertised price and state how it is calculated. (Prices).
The ad must not appear again in its current form. We told Opodo Ltd to ensure that they did not claim that the Entropay payment method was the cheapest if that was not the case, and to ensure that they did not omit material information relating to fees associated with the Entropay payment method from their ads.