A TV ad and direct mailing for a broadband, TV and phone package with TalkTalk:
a. The TV ad had a voice-over stating, "This Christmas unwrap TalkTalk's amazing TV package with unlimited broadband and calls. Your free YouView box lets you pause, record and rewind all the Freeview channels you love ..." The ad featured an image of a Freeview box wrapped in a ribbon and text stating "FREE YouView Box ...". Superimposed text stated "... £50 engineer installation fee ...".
b. The direct mailing had a headline stating "TV now available with Plus". Text in the body of the mailing stated "Today, we are very pleased to offer you, as a valued Plus customer, TV with a Free YouView box ... Register to receive your FREE YouView Box. Please take the time to read the enclosed leaflet to find out how to register to receive your Free YouView box ...". Small print at the bottom of the letter stated "TalkTalk Plus TV, broadband and phone: Subject to status, acceptance & availability in your area, 24 month minimum contract, £50 engineer installation fee and terms & conditions apply ...".
The enclosed leaflet had a headline stating "A FREE YouView box for your home*". The asterisk linked to small print stating "*TalkTalk Plus TV, broadband and phone: Subject to status, acceptance & availability in your area. 24 month minimum contract, £50 engineer installation fee and terms & conditions apply ...".
The complainant challenged whether the claims that the YouView box was "free" in ads (a) and (b) were misleading, because there was a £50 installation fee.
TalkTalk Telecom Ltd (TalkTalk) said their offer of a YouView set top box was a conditional purchase offer in accordance with the CAP Guidance on the use of "free". They explained that the price of their Plus telecoms package was established in the marketplace prior to the addition of the free set top box. At the time the YouView box was introduced, they did not increase the price of the paid-for items, i.e. the Plus telecoms package. In addition, they did not reduce the quality of the Plus telecoms package.
The Plus telecoms package could be purchased on a stand-alone basis, if a consumer did not want to take the YouView box. In that situation, the price of the package would remain the same. The free item, the YouView box, could also be purchased on a stand-alone basis.
TalkTalk explained that installation of the YouView box had to be undertaken by an engineer so as to ensure proper activation of the TV service. The engineer installation charge was a genuine cost solely in relation to the activation of the YouView box and it had not been inflated to recover the cost of the free YouView box. They pointed out that both ads made clear that there was a £50 installation charge with the free YouView box.
TalkTalk believed charging an installation or activation fee for a free set top box was standard industry practice.
In relation to ad (a), Clearcast said that in accordance with CAP Guidance on the use of "free", they understood the £50 installation fee was a one-off cost and therefore complied with the Guidance which stated "For both conditional purchase promotions and packages, one-off, up-front costs incurred, for example, to buy equipment, do not negate claims that products or services supplied without subscription are "free" ...".
The ASA understood that the £50 engineer installation fee was payable by all consumers who opted to take the YouView box and that the YouView box and the £50 fee were inextricably linked. We understood that consumers who took the Plus package without the YouView box – for example, consumers who bought the Plus package before the YouView box was offered or consumers who already owned a YouView box – were not charged the installation fee.
We understood that the offer was a conditional purchase offer and the YouView box was not a new element of a previously-established package. We acknowledged that the YouView box was genuinely separate from the Plus telecoms package and that when the YouView box was offered, the quality of the telecoms subscription was not reduced and the price of the telecoms subscription was not increased. We also acknowledged TalkTalk's comment that the engineer installation charge was a genuine cost solely in relation to the activation of the YouView box and it had not been inflated to recover the cost of the free YouView box. However, we noted that when a consumer unbundled the YouView box from the telecoms subscription, they effectively paid £50 less, this being the cost of the installation fee.
We agreed that one-off, up-front costs, for example to buy equipment necessary to use a free item or for a connection fee payable to a third party, would not negate claims that a product or service was "free". However, we considered in this situation, because the fee was payable to TalkTalk and not a third party, that situation did not apply. We understood that the £50 installation charge was payable to TalkTalk by all consumers who took the YouView box, including those who would have liked to install the box themselves – all consumers who took up the claimed "free" offer were charged £50 more than those who did not. We therefore considered that because the YouView box and the £50 fee were inextricably linked, the claims that the box was "free" were misleading.
The claims breached CAP Code (Edition 12) rules 3.1 3.1 Advertisements must not materially mislead or be likely to do so. (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 3.24.1 3.24.1 the consumer has to pay packing, packaging, handling or administration charges for the "free" product (Free) and BCAP Code rules 3.1 3.1 Advertisements must not materially mislead or be likely to do so. (Misleading advertising), 3.10 3.10 Advertisements must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify. (Qualification) and 3.25.1 3.25.1 consumers have to pay for packing, packaging, handling or administration of the "free" product or service (Free).
The claims must not appear again in their current form. We told TalkTalk to take care in future when describing an item as "free".