Effective July 2005 a CAP Help Note imposed a clear regime for use of the word “free.” This applied mainly in the context of parts of a package of products, such as for mobile telephone services, which were included for no extra charge. From a spate of recent ASA cases it seems that some advertisers still aren’t getting the message.
Topic: Prices
Who: TalkTalk, Just-Dial, Freetalk and Skype
Where: UK
When: April 2006
What happened:
Last month, the Advertising Standards Authority ruled on the acceptable limits of "free" claims made by telcos in light of the position on these claims adopted by the Committee of Advertising Practice (the body that writes the CAP Code of Advertising, Sales Promotion and Direct Marketing). The position was set out in a Help Note which gave advertisers six months from 12 January 2005 to get their houses in order before the policy would be enforced. The Help Note is at http://www.cap.org.uk/NR/rdonlyres/888EB9E6-3B7C-4A3E-BE86-1B9EEAB1235E/0/Free_Claims.pdf
These four cases were reported between 19 and 26 April 2006 and they clearly demonstrated that BT has been keeping a keen eye on price claims made by competitors as it was one of the complainants in each case.
The claims concerned were:
1. A claim made in national press advertisements by The Carphone Warehouse that its TalkTalk package provided "FREE Unlimited landline calls for 3 months*" and that "TalkTalk customers talk FREE FOREVER to each other". BT complained that these claims were misleading as the calls were not free but rather inclusive within the TalkTalk package.
2. Claims made in leaflets and the national press by Freetalk Communications Ltd advertising their telephone service for broadband users known as "freetalk". It was stated that the advertised packages involved "free" calls. The complaints received by the ASA from the public, Vonage, BT and NTL concerned amongst other things the argument that the name "freetalk" and references to "free" in the company's advertising claims were misleading as they implied customers could call for free when the calls were again simply inclusive within the packages concerned.
3. Claims made in print advertisements by Actiontec Europe Ltd (trading as VoSKY) invited consumers to "Enjoy the benefits of making and receiving free Skype calls worldwide….". BT was again on the ball and filed a complaint on the grounds these claims were misleading on the basis that calls using Skype's products depleted the customer's internet usage allowance for which a fee applied. The usage could therefore not be described as "free".
4. Finally, Telco Global Ltd (trading as Just-Dial) also tried its hand at stating that their VoIP customers could benefit from "free calls to fellow VoIP subscribers*. Free off-peak & weekend calls to UK landlines". It was yet again BT who acted as the "free" claim police and filed a complaint with the ASA claiming yet again that the claim made by Just-Dial misleading as the calls were not free but inclusive.
When considering all these claims, the ASA's rulings were all consistent on the matter of the use of the word "free" in light of the CAP Help Note. It upheld BT's complaint against TalkTalk ruling that the claims used were misleading because although consumers could sign up for the tariff referred to without signing up for TalkTalk's line rental, the claim in the advertisement was all about the benefits available to consumers who took the line rental deal. The ASA also noted that calls to other TalkTalk customers were an inclusive feature of two of the plans offered within the advertisement and therefore for these plans calls should not be referred to as "free" any longer.
The ASA also pointed out that calls offered under a call allowance were an intrinsic part of a "bundled" package and therefore inclusive within the overall package price, not free. The use of the word "free" within TalkTalk's advertisement claims was therefore held to be misleading and contrary to section 32.3 of the CAP Code.
Similarly, when considering the claims made concerning Skype's products, the ASA noted that some ISPs offer uncapped broadband packages but a significant number do not and therefore making Skype calls could contribute to the depletion of any available allowance. This compromised the "free" claim and Skype were therefore instructed to make this clear within all future advertisements to avoid further misleading claims.
Similar exchanges regarding "free" versus "inclusive" were also held with Freetalk. Despite Freetalk's arguments that the use of the word "free" in such claims should be permissible as no specific cost was charged for calls following the purchase of a one-off package, the ASA again considered that because customers only obtained the allegedly free calls as part of a package which involved the payment of a monthly or annual charge, the calls were indeed inclusive, not free. It was not all gloom for FreTalk: as far as the use of the name "Freetalk" was concerned, the ASA noted this was used as a product name within the advertisments and felt it was unlikely to mislead consumers as long as it was made clear in the body text of advertising materials that calls were inclusive and not free as the product name suggested.
Just-Dial did not fare any better at the hands of the ASA either and their excuse was simply one of ignorance as to the distinction between free and unlimited so far as advertising claims were concerned. Naturally this was not going to affect the ASA's ruling and it will come as no surprise that in this case the ASA also ruled the CAP Code had been breached because a monthly line rental was charged to subscribers so calls to other subscribers were therefore inclusive of this rental charge and not in fact free as claimed.
Why this matters:
Advertisers must be mindful of section 32.3 of the CAP Code states that "Promoters should not describe an individual element of a package as "free" if the cost of that element is included in the price package" and the Help Note on "Free" claims. There were misgivings about the CAP approach but like it or not, it has to be followed and is now no longer really "new" as nearly eighteen months have gone by since the strict approach was laid down in the Help Note was published and almost a year since it came fully into force. Particularly following these cases, tellcos should start to get more comfortable with using the word "including" rather than "free" from now on……
