Summary of Council decision:
Two issues were investigated, of which one was Upheld and one Not upheld.
Two press ads for TalkTalk offers:
a. The first press ad stated "12 MONTHS HALF PRICE Totally Unlimited Broadband … Was £3.50 Package now only £1.75 a month".
b. The second press ad stated "6 months Half Price Superpowered Fibre". Text that stated "£13.50" was crossed out. Further text stated "NOW £6.75 a month". Small print stated "£6.75/month for 6 months, £11.75/month for 6 months, then £13.50/month totally unlimited broadband".
BT challenged whether:
1. the savings claim in ad (a) was misleading because they believed the "Was" price was not a genuine sale price; and
2. ad (b) was misleading because the ad did not make the amount consumers would have to pay after the initial 6-month period sufficiently clear.
1. TalkTalk Telecom Ltd (TalkTalk) said that £3.50 was the normal selling price of the product and had been the established price since April 2014. The majority of their customers were paying that amount. They said that new customers purchasing the product at the promotional price were, therefore, paying half the price of most TalkTalk customers. They said the price had been marketed for several months, both as part of wider promotions and of standard price packages, but all customers would pay the normal non-promotional price for their package as soon as any promotional period finished. They pointed out that their promotions were not one-off purchases, and they therefore believed they were not capable of temporary inflation in the same way; customers had to agree to an on-going contractual commitment, making monthly payments. They said £3.50 was the genuine selling price that customers would have to pay during their contract, after the initial promotional period had finished. They provided the pricing history of the product.
2. They said the price point for their fibre promotion was sufficiently clear. They explained that for six months the price was half of £13.50 and pointed out that the pricing information relating to the price after six months was included in the small print qualifications. They said a consumer would see the reference price of £13.50 in the ad and expect that when the offer ended the price would increase. They pointed out that the actual price paid after six months was cheaper than the reference price in the main body of the ad, because consumers would also benefit from half price broadband. They said, therefore, consumers would be paying £11.75 after six months, then £13.50 for the final six months of their contract.
The ASA considered consumers would interpret the claim "Was £3.50 Package now only £1.75 a month" to mean that £3.50 was the usual selling price of the package at the time the ad appeared, meaning that TalkTalk had reduced the usual price by half and customers could benefit from a £1.75 saving. While we acknowledged TalkTalk provided details of the price of the product over one year, and that it had varied between £1.75 and £3.50 during that time, because we understood pricing within the telecommunications sector fluctuated regularly, we considered the product's more recent pricing history was most directly relevant to the usual selling price. While the package had been priced at £3.50 for 18 days immediately prior to the half-price promotional period, it was priced at £1.75 for approximately the preceding two and a half months. We therefore considered £1.75 was the usual selling price of the product at the time the ad appeared. Because the ad was likely to be understood to mean the usual selling price was £3.50, whereas that was not the case, we concluded that it was misleading.
On that point, the ad breached CAP Code (Edition 12) rules 3.1 3.1 Marketing communications must not materially mislead or be likely to do so. (Misleading advertising) 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. (Prices).
2. Not upheld
The ASA considered consumers were likely to interpret the claims "6 months Half Price Superpower Fibre" next to text that stated "£13.50" crossed out, and further text that stated "NOW £6.75 a month", to mean that the product would cost £13.50 per month following the initial six month promotional period, for the duration of the contract. We noted that details of the prices that applied after six and twelve months were stated in the footnote but that that information was not clearly linked to the savings claims, which we considered was potentially ambiguous. However, we understood consumers would pay £6.75 for the first six months and £11.75 for the six months following the initial promotional period, before the price then rose to £13.50 for the duration of the contract. Because we understood consumers would pay half price for six months as claimed, and would not pay more than £13.50 at any time during the contract, we concluded the ad was not materially misleading.
We investigated the ad under 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. (Misleading advertising) and 3.9 3.9 Marketing communications must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify. (Qualifications), but did not find it in breach.
Ad (a) must not appear in its current form. We told TalkTalk Telecom Ltd to ensure they were in a position to substantiate future savings claims likely to be understood to represent the usual selling price of a product.