An email from an auction website, received in October 2011, stated "Hi [user id] You have just won a FREE iPod shuffle! To receive your iPod, simply click here. The offer is valid in 48 hours so hurry up! ..." the e-mail showed an image of an iPod shuffle with a orange bubble which stated "iPod shuffle FREE!".
The complaint challenged whether the claim that the recipient had won a free iPod was misleading, because she understood that in order to obtain the item, recipients were required to provide credit card information, resulting in a three month membership to the auction site at a cost of £59.99 per month.
Flamingo Intervest Ltd t/a Ziinga.com (Ziinga) stated that customers were informed about the membership of the auction site, its benefits and charges on the payment pages of the website as well as in the 'terms and conditions' page which customers were asked to read before completion of the transaction. They stated that in addition to this, a payment receipt was sent to customers upon payment as a reminder about the membership charges and the seven day trial period. They provided copies of the payment pages to demonstrate that consumers would be made aware of the conditions of membership prior to any payment being made. They added that upon processing the payment, members were sent a payment receipt which confirmed the ongoing payments that were a condition of membership.
The ASA noted the Ziinga auction website included information in the terms and conditions and payment pages to indicate that after a seven day free trial period (during which time membership could be cancelled), the service automatically took £59.99 per month from the member's credit or debit card for a minimum period of three months, after which time the account could be cancelled. We also noted when signing up to the seven day free trial period during which time the iPod offer was processed, customers were required to provide a scanned copy of their passport or driving license along with their credit card information, the details of which were then used to make the £59.99 monthly payments.
We considered that these were significant conditions of the promotion and that they should have been included in the initial promotional e-mail ad for the 'free' iPod shuffle offer. Because the e-mail failed to provide recipients with this information, we concluded that the ad was misleading.
The ad breached CAP Code (Edition 12)
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. (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), 3.23 3.23 Marketing communications must make clear the extent of the commitment the consumer must make to take advantage of a "free" offer. (Free) and 8.19 8.19 Promoters must not claim that consumers have won a prize if they have not. The distinction between prizes and gifts, or equivalent benefits, must always be clear. Ordinarily, consumers may expect an item offered to a significant proportion of participants to be described as a ‘gift’, while an item offered to a small minority may be more likely to be described as a ‘prize’. If a promotion offers a gift to a significant proportion and a prize to a minority, special care is needed to avoid confusing the two: the promotion must, for example, state clearly that consumers “qualify” for the gift but have merely an opportunity to win the prize. If a promotion includes, in a list of prizes, a gift for which consumers have qualified, the promoter must distinguish clearly between the two. (Sales promotions).
The ad should not appear again in its current form. We told Flamingo to ensure significant conditions were included in future promotions.