Background
Summary of Council decision:
Two issues were investigated, both of which were Upheld.
Ad description
A TV ad, for a company providing boiler maintenance and service contracts, featured a voice-over that stated, "Get an A rated Vaillant gas boiler free with a hasslefreeboilers.com maintenance and service plan. A twelve-year guarantee and savings on your gas bill give you total peace of mind ...” On-screen text stated "Free boiler & guarantee backed by 12 year service plan. Prices start £39.95 /month. T&Cs apply. Source: EST".
Issue
The ASA received two complaints:
1. both complainants challenged whether the claim that the boiler was "free" was misleading, and could be substantiated; and
2. one of the complainants challenged whether the ad was misleading, because it did not make clear that customers were required to sign up to a fixed 12-year contract, which could only be ended by the payment of a significant termination fee, even if the customer moved home.
Response
1. Ecovision Group Ltd t/a Hassle Free Boilers said the boiler was free to consumers who took out their service and maintenance plan and that there was no obligation for consumers to take it if they did not wish to. They told us that they had started the business within the last year and that they had two customers who were interested in taking the service plan without the free boiler and that 1,246 customers had opted to take it, but they considered that that pattern may change over time.
Hassle Free Boilers explained that the ‘free boiler’ process was covered at every stage of contact with a potential customer; through the Hassle Free Boilers website and in discussion with Customer Care advisors after which they would receive a copy of Frequently Asked Questions and the contract to review at leisure. They pointed out that the contract made clear that the boiler was free and also that there was no obligation for a customer of the service and maintenance plan to take the boiler. They could, if wished, use the Service Plan for the maintenance and service of an existing boiler and were not actually committed to the contract terms until a successful survey had been completed. There were no hidden charges and everything was made totally transparent for customers. Hassle Free Boilers submitted a copy to the ASA of the contract provided to customers.
Hassle Free Boilers also submitted a letter from their legal representatives, which explained their view that the use of the term “free” in this context was fully compliant with the Consumer Protection from Unfair Trading Regulations 2008, the Business Protection from Misleading Marketing Regulations 2008 and other consumer and advertising-based regulations and codes. It explained that the boiler was genuinely separate from, and supplied in addition to, the Service Plan a customer was required to pay for, insofar as a customer was entitled to purchase the Service Plan without a ‘free’ boiler if preferred. The Service Plan had a genuine, stand-alone price. Customers were able to exercise choice about whether to take the Service Plan with or without the ‘free’ boiler.
Clearcast said they had seen evidence to show that the service plan was available for the same price with or without the boiler and, as such, they were satisfied that consumers were receiving something for nothing and the boiler could be referred to as "free".
2. Hassle Free Boilers said they considered that the ad made clear that consumers would be signing up to a 12-year contract, and that the terms and conditions were explained fully to anyone who was interested in taking out the service plan, prior to a commitment being made. They said the termination fee was covered in the contract itself, along with other customer communications and that it was reasonable in the context of the cost of supplying and installing a boiler.
Clearcast said they had required Hassle Free Boilers to spell out the extent of the commitment necessary to obtain the free boiler, but that they did not consider it necessary for details of the termination fee to be included, because they felt that point was adequately covered by the general reference to terms and conditions.
Assessment
THIS ADJUDICATION REPLACES THAT PUBLISHED ON 5 MARCH 2014. THE WORDING HAS BEEN CHANGED BUT THE 'UPHELD' DECISION REMAINS THE SAME.
1. Upheld
The ASA acknowledged that consumers were able to opt out of receiving the boiler and simply sign up for the service plan if they wished, although we noted that in practice only two customers had expressed an interest in doing so, and that that option was not actively advertised. Because Hassle Free Boilers only provided one product, we were unable to compare the cost of the service plan and free boiler, to other similar products which did not include a free boiler in order to determine whether the price was similar. However, we noted that boiler service and maintenance plans were widely available from other providers for significantly less than the price charged by Hassle Free Boilers. In an assessment of 10 boiler and maintenance plans from other providers, which offered a level of cover similar to that of Hassle Free Boilers, we found the annual cost to be approximately £200. The cost of the plan from Hassle Free Boilers ranged from £431.40 in the first year to £597.24 in the twelfth. We acknowledged, however, that there were excess fees to be paid in some cases, whereas we understood that, with Hassle Free Boilers, no excess fees applied.
We also noted Hassle Free Boilers applied a significant termination fee for early cancellation, from £2,999 for cancellation within three years of installation, to £749 for cancellation on or after the seventh anniversary of the agreement. We understood that it was not standard practice for such contracts to have such a long fixed term, and although some other providers did apply a cancellation fee, it was not such a significant sum. We also noted that when explaining the level of the fee, Hassle Free Boilers had referred to the cost of providing and installing a boiler, which suggested that that cost had been included in the price of the service plan and that Hassle Free Boilers intended to recover that cost from consumers over the 12-year term of the contract. We therefore concluded that it was misleading to describe the boiler as ‘free’.
On this point, the ad breached BCAP Code rules 3.1 3.1 Advertisements must not materially mislead or be likely to do so. (Misleading advertising), 3.9 3.9 Broadcasters must hold documentary evidence to prove claims that the audience is likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation. (Substantiation) and 3.26 3.26 Advertisements must not describe an element of a package as "free" if that element is included in the package price, unless consumers are likely to regard it as an additional benefit because it has recently been added to the package without increasing its price. (Free).
2. Upheld
We noted the voice-over referred to the maintenance and service plan, without stating its term, which was only mentioned in on-screen text that stated "free boiler & guarantee backed by 12 year service plan". We considered that the use of the phrase "backed by", which was more commonly used when referring to guarantees, obscured the fact that consumers were signing up to a 12-year fixed-term contract. We understood that if a consumer wished to terminate their contract early, they would have to pay a termination fee, which amounted to around £3,000 if the contract was terminated within the first three years, even if they were moving home. We understood that this was not standard practice amongst providers of boiler service and maintenance plans and considered that it was material information that should have been made clear in the ad.
Because material information was omitted, we concluded that the ad was likely to mislead.
On this point, the ad breached BCAP Code rules
3.1
3.1
Advertisements must not materially mislead or be likely to do so.
and
3.2
3.2
Advertisements must not mislead consumers 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 consumers need in context to make informed decisions about whether or how to buy a product or service. Whether the omission or presentation of material information is likely to mislead consumers depends on the context, the medium and, if the medium of the advertisement is constrained by time or space, the measures that the advertiser takes to make that information available to consumers by other means.
(Misleading advertising) and
3.25
3.25
Advertisements must make clear the extent of the commitment consumers must make to take advantage of a "free" offer.
Advertisements must not describe items as "free" if:
(Free).
Action
The ad must not be broadcast again in its current form. We told Hassle Free Boilers to ensure that products were not described as free when that was not the case and to make sure that any material conditions were made clear in future.
