Ad description
Two press advertisements by O2 for a Surface Pro and iPad seen in February 2020:
a. The first press ad for the iPad featured the headline claim “Chill out with the amazing iPad for less than £9 a month. For the first 3 months”. Small print at the bottom of the ad contained details of a representative example followed by the text “Each year your Airtime Plan will be adjusted on your April bill by the Retail Price Index (RPI) rate of inflation announced in the preceding February. Find out more at o2.co.uk/prices. £8.69 Device Plan for 36 months and £13 monthly rolling Airtime Plan. Further text within the small-print stated “£8.69 per month for the first 3 months and £21.69 thereafter”.
b. The second press ad for the Surface Pro X featured the headline claim “Chill out with the Microsoft Surface Pro X for less than £31 a month. For the first 3 months”. Small print at the bottom of the ad contained details of a representative example followed by the text “Each year your Airtime Plan will be adjusted on your April bill by the Retail Price Index (RPI) rate of inflation announced in the preceding February. Find out more at o2.co.uk/prices. £30.50 Device Plan for 36 months and £12 monthly rolling Airtime Plan”. Further text within the small-print stated “£12 per month for the first 3 months and £42.50 thereafter”.
Issue
British Telecommunications plc, who understood that the monthly cost of the products would increase by 250% after the first three months, challenged whether the ads were misleading by not making clear the total price of the products.Response
Telefonica UK Ltd t/a O2 said that all of the material information was contained within the advertisements. They said the headline price statement was immediately followed by the secondary claim “for the first 3 months”, thereby making it one step less prominent than the primary claim and clear that the price referred to a three-month period only. They said the qualification was clear, prominent and succinct.
O2 highlighted that the terms and conditions contained the text “£8.69 per month for the first 3 months and £21.69 thereafter” in ad (a) and “£12 per month for the first 3 months and £42.50 thereafter” in ad (b). They included the relevant RPI information (as required by Ofcom) and details about the structure of O2’s split pricing mechanism (the separate Airtime and Device Plans). Immediately after, they made clear in 11 words what the price would be following the first three months. They believed that was in line with all of the ASA’s previous guidance.
O2 said the advertisements were featured in static physical publications where the consumer had unlimited time to consider the proposition in detail; therefore, the total costs of the product after the first three months were sufficiently prominent, succinct and clear. They believed that was particularly the case when consumers were made aware in the subheading that the headline price only applied to the first three months. It was not unreasonable to propose that consumers turn to the small print to establish the monthly price beyond that point. They believed any customer would understand that the price advertised was for a fixed term and that the price would change after that period. They also pointed out that there had only been one complaint about this issue, and from a competitor rather than a consumer.
Assessment
Upheld
The CAP Code rules on misleading advertising and pricing required that advertising must not mislead by hiding material information or presenting it in an unclear, unintelligible or ambiguous manner. Material information included the full cost of the advertised product in circumstances where a cost figure was included in the ad and the total cost could be calculated in advance.
Ad (a) featured the headline claim “Chill out with the amazing iPad for less than £9 a month” followed by the claim “For the first 3 months”, while ad (b) featured the headline claim “Chill out with the Microsoft Surface Pro X for less than £31 a month” followed by the claim “For the first 3 months.” We acknowledged that the headline claims in both ads made clear to consumers that this price claim only related to the first three months. However, to avoid misleading consumers, the ad needed to ensure they had made clear the full cost of the product after the three-month period.
The small print at the bottom of ad (a) featured various different price claims relating to the device costs and airtime costs. The representative example stated “Upfront cost £20. Monthly Device Payment £8.69. Total Credit Amount £312.61. Total amount payable for device £332.61. Airtime Plan, today to March 2020 £13. Airtime Plan, April 2020 to March 2021. £13 + RPI announced in Feb 2020 = Price A. Airtime Plan, April 2021 to March 2022. Further text within the body of the small print stated “£8.69 Device Plan for 36 months and £13 monthly rolling Airtime plan” and later “£8.69 per month for the first 3 months and £21.69 thereafter”.
Ad (b) followed the same structure with a representative example at the top of the small print, and the claims “£30.50 Device Plan for 36 months and £12 monthly rolling Airtime Plan” and “£12 per month for the first 3 months and £42.50 thereafter”. We considered that those price claims placed within the body of a large amount of small print were insufficiently prominent and likely to be overlooked by consumers. Further, it was not sufficiently clear after reading the small print that the monthly cost of the deal after the first three months was £21.69 in ad (a) and £42.50 in ad (b). Instead, we considered that the monthly costs after three months and the upfront costs should have been included in the main body of the ad.
While we acknowledged that bold text at the top of the small print stated “Each year your Airtime Plan will be adjusted on your April bill by the Retail Price Index (RPI) rate of inflation announced in the preceding February”, we considered that was not sufficiently prominent as the headline claim in the ad did not link to the qualification in any way. Because the ads did not make sufficiently clear the upfront costs and the monthly costs of the products after the first three months, and did not make clear the mid-contract price increase, we concluded that the ads were misleading.
Action
The ad must not appear again in its current form. We told Telefonica UK Ltd t/a O2 to make clear the monthly cost of the products after the first three months and the upfront costs. We also told them to make clear there would be a mid-contract price increase by linking the headline price claim to the qualifying text about the RPI increase.
CAP Code (Edition 12)
3.1 3.3 3.4.3 3.17 3.10 3.9 3.4
