Ad description
The website for Magazines Direct www.magazinesdirect.com, seen on 5 September 2016, promoted a subscription to Woman & Home magazine. Offers for the print edition included "Card/PayPal £32.49 for 1 year/12 issues" and "Direct Debit £29.99 per year/ 12 issues".
Issue
The complainant, who bought an annual direct debit subscription to the magazine in 2015 for £28.99, and was subsequently charged £40.99 from month 13, challenged whether the ad misleadingly implied that the cost would remain at £29.99 for 12 issues beyond the first year.
Response
Time Inc (UK) Ltd confirmed that the complainant had signed up for a direct debit subscription of Woman and Home magazine in August 2015 at £28.99 for an initial 12-month period, with the price subsequently increasing to £40.99 at month 13. They noted that their terms and conditions included payment terms, which stated that “If you make ongoing direct debit payments we reserve the right to increase our prices at any time after the first year of your subscription has elapsed and will notify you in writing with 10 days notice of any such increase”. Further, during the checkout process, the direct debit mandate stated “…if there are any changes to the amount, date or frequency of your Direct Debit Time Inc (UK) Ltd will notify you 14 working days in advance of your account being debited or as otherwise agreed”.
Time Inc (UK) Ltd said, as with all their customers, in advance of the increase to the complainant’s subscription price, they sent her a letter notifying her that the subscription anniversary was approaching and stating their intention to increase the price for the upcoming 12-month period. They stated that it was common practice within the magazine industry for introductory discounted offers to be advertised to consumers, with the presumption that the price would rise at a subsequent date. In the context in which the price claims appeared, they believed that consumers would understand that the price of an ongoing subscription would be likely to increase over time. As such, the reference to “£29.99 per year” on the subscription home page was intended to draw to the consumer’s attention to the ongoing direct debit commitment, rather than conveying that the price would be maintained in perpetuity.
While Time Inc (UK) Ltd did not believe the ad was in breach of the Code, they said they were willing to make changes to the ad to make clear that the stated price was guaranteed for the first 12 months only.
Assessment
Upheld
The ASA noted that the site presented consumers with the option of a six- or 12-month subscription which required a one-off payment (£19.99 for 6 issues or £32.49 for 1 year), or a rolling annual subscription paid by direct debit at “£29.99 per year”. In the absence of any qualification to explain how the direct debit subscription worked, we considered that consumers were likely to interpret the reference to “per year” to mean that if they committed to a rolling subscription and paid by direct debit, the price would remain constant beyond the first 12 months of their subscription.
We acknowledged that the website’s full terms made clear that the direct debit fee was only constant for the first 12 months and could then be increased by any amount with the customer free to cancel the contract, should they wish to do so. We considered, however, that text, which was located on a separate web page in the ‘Corporate’ section of the site, was unlikely to be viewed by customers, and was therefore not sufficiently prominent to counter the initial impression that the price would remain constant after the first 12 months of the contract.
While we welcomed Time Inc (UK) Ltd's willingness to make changes to the ad, because we considered that consumers were likely to interpret the ad to mean that the price of the direct debit subscription would remain constant beyond their initial 12-month commitment, when in fact it could increase at any time from month 13, we concluded that it was misleading.
The ad breached CAP Code (Edition 12) rules
3.1
3.1
Marketing communications must not materially mislead or be likely to do so.
and
3.3
3.3
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) 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).
Action
The ad must not appear again in its current form. We told Time Inc (UK) Ltd to ensure that they did not state or imply that a direct debit annual subscription price would remain constant beyond the initial 12 months of the subscription, if that was not the case.
