Who: Hassle Free Boilers, Telegraph Media Group Ltd trading as the Daily Telegraph
Where: Advertising Standards Authority, England
When: 26 February 2014 and 5 March 2014
Law stated as at: 31 March 2014
What happened:
The ASA has recently been asked to consider “free” claims made in two advertising campaigns, one a national press ad for an annual subscription for the Telegraph newspaper, the other a TV ad for Hassle Free’s boiler maintenance and service contracts.
Both contained claims that “free” items would accompany the purchase of these products; the Telegraph newspaper ad promised new subscribers a “free ASUS MeMO Pad HD 7″, while Hassle Free Boiler’s ad claimed their service and maintenance plan would be accompanied by a free “A rated Vaillant gas boiler”.
Two complaints were received challenging Hassle Free Boiler’s ad, one stating that the “free” boiler claim was misleading and could not be substantiated. The second complainant also felt the ad was misleading, but on the basis that it did not clarify that to acquire a “free” boiler, the customer would have to sign up to a fixed 12 year contract, the early cancellation of which would trigger a significant termination fee.
The voiceover in the ad described the service and maintenance contract as coming with “a twelve year guarantee and savings on your gas bill” whilst on screen text stated that “free boiler & guarantee backed by 12 year service plan”.
Hassle Free Boilers responded to the first complaint saying that the boiler was free to consumers who took their service plan; and they had evidence showing that the service plan was available with or without the boiler at the same price. As to the second complaint, Hassle Free Boilers stated that the ad made clear that the consumer would be signing up to a 12 year contract, and the terms and conditions, referred to in the text of the ad, “T&Cs apply”, made clear that there was a termination fee. Further, Hassle Free Boilers maintained that the steep termination fee was reasonable in the context of the cost of supplying and installing the boiler.
The ASA upheld the first complaint on the basis that other providers offered similar boiler service and maintenance plans for a much lower price than that offered by Hassle Free Boilers, and it was not standard practice for such contracts to be on such a long-term basis with such a significant termination for early cancellation.
ASA: cost of boiler included in the price so it was not “free”
The very fact that Hassle Free Boilers themselves highlighted the cost of providing and installing the boiler in the context of justification for the cost of the contract, indicated that the cost of the boiler was actually included in the price, and therefore, not “free” for the consumer as claimed.
Therefore, the ad was held to breach BCAP Code rules 3.1 (Misleading advertising), 3.9 (Substantiation) and 3.26 (Free).
Similarly, the second complaint was upheld, the ASA finding that the ad breached rules 3.1 and 3.2 (Misleading advertising) and 3.25 (Free), as the wording of the ad did not make it clear that the consumer was signing up to a 12 year contract, as well as, a 12 year guarantee. The size of the termination fee meant that it was a material condition that should have been highlighted in the ad.
Daily Telegraph fares better
By contrast, the complaint that the ad for the Daily Telegraph was misleading was not upheld.
The complaint was on the basis that the subscription price for the newspaper had increased and consequently the MeMO pad could not be described as “free.”
The ASA, however, considered the offer with the increased subscription price to be a new offer and different to the Telegraph’s other subscription promotions, so should therefore be considered separately. It was solely for new subscribers who paid the fee in full at the outset.
The ASA acknowledged that it was common practice for marketers to offer new and existing customers different financial incentives and rewards to ensure that they maintained their current customers, whilst acquiring new ones.
Furthermore, the Telegraph provided evidence that ASUS supplied the MeMO pads free of charge, so clearly the cost of these had not been passed on to the consumer through the subscription price and the MeMO Pads could, therefore, be described as free.
Why this matters:
These two adjudications highlight the fact that “free” claims under the advertising code are not banned per se; however, advertisers should note, that if they wish to promote a product by using a “free” claim, none of the cost of offering their consumers a free product should be passed on indirectly.
CAP and BCAP’s guidance on use of “free” is here.
The ASA case report is here.
