Who: The Advertising Standards Authority (ASA) and Team RH Fitness Ltd (Team RH)
Where: United Kingdom
When: 31 January 2024
Law stated as at: 13 February 2024
What happened:
In July 2023, Team RH, an online fitness and nutrition coaching company, posted a video to its social media account advertising its subscription plan. In the video, a man is asked the question “Do you do a free trial before committing?”. The man then responds “No, it’s £6.99” and implies this is because, if a free trial was given, a customer would receive a full fitness plan and then leave. The post was also captioned “no trial, it’s £6.99 #weightlossplan #dietplan”.
The ad was challenged by two complainants on the basis that it did not make clear that access to Team RH’s subscription plan was required for a minimum of 12 months.
In its ruling, the ASA considered that consumers would interpret the claim to mean that the price they would be required to pay for access to the plan was £6.99 only. In contrast, however, a subscription for Team RH required a minimum commitment of 12 months and, in particular, consumers were asked to waive their cancellation rights and their 14-day cooling off period when they downloaded the programme. This meant that the minimum price consumers would, therefore, pay for the programme was £83.88.
Under the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code), ads must make clear all applicable significant conditions or information likely to influence a consumer’s decision where the omission of such information is likely to mislead. As Team RH’s ad did not make clear the minimum period for the subscription, the ASA, therefore, considered the ad to be misleading.
Why this matters:
The increase in subscription offerings to UK consumers also brings increased regulatory and legislative scrutiny. The ASA has issued a number of rulings against companies that have not displayed material information in their subscription plan ads and has in place particular guidance for businesses on how they should showcase free trials or other subscription promotions.
There are also proposals to amend UK consumer law to better protect consumers via the Digital Markets, Competition and Consumers (DMCC) Bill. While the DMCC Bill is still going through Parliament, this new regime will have far-reaching consequences for businesses that offer subscriptions, with current proposals giving consumers better protection against subscription traps.
With the ASA’s focus on subscription plans and in anticipation of the DMCC Bill coming into force, businesses should review their subscription plans and ensure their ads prominently communicate all material and significant information, including any minimum term and cancellation rights.
