British Sky Broadcasting (“Sky”) together with members of the public challenged whether references in Virgin Media’s adverts for a “Free TiVo Box activation” for the TiVo service from Virgin were misleading and could be substantiated. The complainants suggested that the ads were misleading because they failed to make it clear that an installation charge of £49.95 and a £3 monthly charge applied.
The ASA (upholding the first complaint) noted (click here) that an element of a package must not be described as “free” it it was included in the package price, unless it was likely to be regarded by consumers as an additional benefit because of its recent addition without increasing the price of the package. Prior to the ads, all new TiVo subscribers had paid a general Virgin installation fee and for TiVo specifically a monthly charge and activation fee. Under the advertised offer subscribers only paid the installation fee, a monthly charge but no activation fee. The ASA were concerned that this was “not a new additional benefit, rather an existing element of a bundle that included TiVo and had been subject to a price reduction” – noting that the activation fee and monthly charge were interdependent and therefore part of a bundled service. The ASA also held that although the circular and TV ad made it clear that there was an installation fee, the failure to provide details of the level of that fee meant that these adverts were misleading. This was not the case for the Digital TV page which made it clear that installation as well as activation was free if customers signed up online and in any case set out details of the level of the installation fee. The ASA held that the £3 monthly charge had been adequately communicated in all ads.
Take away tip: Care should be taken when describing something as “free” when in fact some payment does still need to be made, in which case that payment should be clearly indicated. In respect of packages, one must be careful to ensure that the “free” addition is actually an additional benefit and not something that already exists.