Who: BT, TalkTalk and The Advertising Standards Authority
Where: UK
When: 25 February 2015
Law stated as at: 2 April 2015
What happened:
BT challenged TalkTalk’s ad promoting a broadband package as half price for 12 months. BT complained that the promotional sale price of £1.75 a month did not genuinely represent a half price saving because the full price of the package was not £3.50. Therefore, TalkTalk’s “was” £3.50 claim misled consumers into thinking that they were making a greater saving than was actually the case.
The ASA investigated whether the “was” price genuinely represented the usual selling price of the package.
The regulator said consumers would interpret the ad as meaning that the usual selling price of the package was £3.50 when the promotion appeared, so TalkTalk had to show that £3.50 was the genuine standard selling price of the package.
TalkTalk provided a pricing history of the package over the past twelve months, which showed the price of the package had fluctuated between £1.75 and £3.50 in the past twelve months. Whilst the package had been priced at £3.50 in the 18 days preceding the promotion, the ASA noted that for two and a half months before that, the package had been priced at £1.75.
The fluctuations in pricing in the telecommunications sector meant the ASA focused on the most recent pricing history of the product, which showed that the package had more regularly been priced at £1.75, not £3.50. Therefore, the ASA concluded that the product’s genuine selling price at the time of the promotion was £1.75 and TalkTalk’s half price savings claim was misleading.
The ASA told TalkTalk not to show the ad again in its current form, and that in future, should the advertiser claim a half price saving where the promotion price could be understood as the usual price, they would have to be in a position to substantiate the savings claim.
BT unsuccessfully challenges TalkTalk’s 6 month half price promotion as misleading
BT also challenged a TalkTalk ad promoting “6 months half price Superpowered fibre” as misleading for not sufficiently highlighting the higher prices consumers would have to pay after six months. The ASA dismissed this and stated that the consumers would understand the ad to mean that after the initial six month promotional period, they would pay a higher price for the product.
Since the price of the product would never exceed the actual selling price, ie double the half price amount, and the pricing of the product over the term of the contract was made clear in the footnotes to the ad, the ASA concluded that the ad was not misleading.
Why this matters:
Pricing claims in the telecommunications sector have proven a popular ground for challenge, and an area in which advertisers need to be cautious in when making savings claims. Advertisers should ensure that when they are making savings claims by reference to a higher price as the usual selling price, that this does actually represent the genuine selling price of that product in the preceding months, not just a price at which the product has been sold in the past.
