A TV ad for Sky Mobile, seen on 15 and 24 April 2017, showed the actor Tom Hardy walking along a path and a beach in wintry weather, wearing old and worn shoes. The voice-over stated, "Things can look tired a year on from when you bought them. Like your phone. Once it was the hot, new model. Not anymore. That's when you realise you've still got a year on your contract. That's a long way to go. But new Sky Mobile lets you swap your old phone for the latest one every 12 months free of charge. So, say hello to a shiny new phone every year with Sky Mobile. Sky. Believe in better."
Three separate paragraphs of on-screen text shown sequentially were worded as follows:
"Free of early upgrade, admin and delivery charges. 24 month interest free loan with data plan needed for each new phone";
"Trade in value of old Sky phone credited to existing loan. Full repayment required"; and
"Subject to status and availability. 18+. Ts and Cs apply. See [Sky website address]".
Two complainants, who noted that subscribers needed to take out a 24-month, interest-free loan with data plan to receive their new phone, challenged whether the claim that the swap was "free of charge" was misleading. One believed that early clearance of the balance from the first loan meant they would lose the benefits of the calls, texts and data they would have received in the year had they remained in their original contract.
Sky UK Ltd said customers bought a handset through a loan under the terms of a regulated credit agreement (CCA) with a 24-month repayment term. A customer could choose to swap their phone at any time after payment of their twelfth monthly instalment. As long as the phone was in full working order and no market value adjustment applied, the price Sky would pay to take back the phone would pay off the balance of the customer's loan. The customer would then take out a new loan for their new phone. Sky said the ad had ceased running in May 2017 and there were no plans to bring it back to air.
Clearcast said that if a customer took up the offer to swap their phone before the end of the 24-month repayment term, they were effectively repositioned, from a legal point of view, to start a brand new contract with Sky. Clearcast's understanding was that the monthly payment for the handset would possibly increase as a result of opting for a newer handset. They considered customers would understand that a newer handset could cost more each month than they had previously paid. They believed the on-screen text "free of early upgrade, admin and delivery charges" made clear that "free of charge" referred to the upgrade process. They said the handset could cost the customer no more per month than they had previously paid if they chose one that was similar in price to the one they had had before.
Clearcast acknowledged that it was necessary for a customer to take out a new loan to acquire a new handset but believed the word "swap" and the on-screen text "24 month interest free loan with data plan needed for each new phone" made the commitment clear. They said customers were not disadvantaged since their circumstances did not differ from customers who decided to keep their current handset for the remainder of their 24-month contract without upgrading.
Clearcast said the purchase of the handset was separate from the data, call and message package which was selected by the customer independently, and that customers were able to carry over any accumulated, unused data from their current contract to their new contract.
The ASA considered consumers were likely to understand the ad to mean that those who were a year into a two-year mobile phone contract with Sky could replace or upgrade their phone without charge or other significant disadvantage.
We considered the points viewers were most likely to take from the ad were the spoken reference, "swap your old phone for the latest one every 12 months free of charge ... say hello to a shiny new phone every year" and the first sentence of the on-screen text, "free of early upgrade, admin and delivery charges". We acknowledged that a customer would not be charged a penalty for terminating their contract early and would be able to carry over any accumulated, unused data to their new contract. Nevertheless, we considered that the need to begin a new, two-year commitment to take advantage of the offer when a customer had only a year to run on their previous one was material information which should have been stated clearly in the ad. We considered it was likely to be seen as a disadvantage and a diminishment in the terms the customer had originally agreed to.
We also considered that, given that the ad referred to a one-year-old phone to once being "the hot, new model” but was now looking "tired", and invited customers to "swap your old phone for the latest one," customers might want to take this opportunity to upgrade their phone. While we acknowledged there would be a certain amount of expectation by the customer that a new handset might cost them more per month, particularly if it contained more features, we nevertheless considered that, in addition to beginning a new, two-year commitment, some customers could also end up paying more per month. We considered that too was material information which should have been stated clearly in the ad.
We acknowledged that on-screen text stated "24 month interest free loan with data plan needed for each new phone" and "Trade in value of old Sky phone credited to existing loan. Full repayment required". However, we considered the need to take out a new, 24-month loan and the possibility of a higher monthly charge with an upgraded phone were pieces of information that customers needed to be aware of before enquiring about the offer, thus needed to be stated clearly and prominently in the ad. Because we considered that neither the prominence of and the phrasing of the on-screen text nor the spoken or visual information in the ad were made sufficiently clear, we concluded that the ad was likely to mislead.
The ad breached BCAP Code rules 3.1 and 3.2 (Misleading advertising), 3.10 (Qualification) and 3.25 ("Free" claims).
We noted that the ad had finished its run. We told Sky UK Ltd to ensure that any material information relating to an offer was stated sufficiently clearly in their ads.