Complaint: 13/404

Vodafone Website

Details

Complainants
D. Divett
advertisers
Vodafone
Year
2013
Media
Digital Marketing
Product
Telecommunications
Clauses
Decision
Not Upheld
ASA Links
Website Listing
Decision Document

Document

COMPLAINT NUMBER
13/404
COMPLAINANT
D. Divett
ADVERTISER
Vodafone New Zealand
ADVERTISEMENT
Vodafone Website
DATE OF MEETING
8 October 2013
OUTCOME
Not Upheld



SUMMARY

The Vodafone website http://www.vodafone.co.nz advertised three Red Business telecommunications plans which were "Red Business Essentials, Red Business and Red Business Super." The Red Business Essentials Plan stated the plan was "$95 excl GST per month for 24 months." The "more about this package" link listed "important things to know" which said a new smartphone was not available with the Essentials plan.

The Complainant said that Vodafone advertised three different plans, each with a replacement phone every year, however in the terms and conditions of the "they effectively cancel the offer." The Complainant said the advertisement was misleading as a new phone would not be offered annually "unless the customer resigned for an additional 24 months."

The Complaints Board said the advertisement clearly identified the terms and conditions associated with the plan which stated explicitly that the new smartphone every year was not available with the Business Essentials Plan. It said the advertisement was unlikely to mislead to consumers into thinking that you would get a new smartphone every year with the Business Essentials Plan and was not in breach of Rule 2 of the Code of Ethics and said the advertisement had been prepared with a due sense of social responsibility to consumers and society and was not in breach of Basic Principle 4 of the Code of Ethics. The Complaints Board ruled the Complaint was not upheld.

[No further action required]

Please note this headnote does not form part of the Decision.



COMPLAINTS BOARD DECISION

The Acting Chairman directed the Complaints Board to consider the advertisement with reference to Basic Principle 4 and Rule 2 of the Code of Ethics. This required the Complaints Board to consider whether or not the advertisement contained anything which, either directly or by implication, was likely to deceive or mislead the consumer and if it had been prepared with a due sense of social responsibility to consumers and to society.

The Complaints Board noted the concerns of the Complainant that Vodafone advertised three different plans, each with a replacement phone every year, however in the terms and conditions of the "they effectively cancel the offer." The Complainant said the advertisement was misleading as a new phone would not be offered annually "unless the customer resigned for an additional 24 months."

The Complaints Board noted the Advertiser's response which said that the terms and conditions of the Red Business plans were clear in stating that the NEY [New Smartphone Every Year] deal was not available with the Essentials package. The Advertiser said that a new phone every year was only available with the Red Business and Red Business Super plans which was clear in the terms and conditions.

Further the Complaints Board noted that Advertiser said the ability to select a new smartphone every year appeared as a "add on" as part of the Red Essentials plan on the purchase page. The Advertiser said that "since receiving the complaint by D. Divett Vodafone has updated the website to ensure the NEY [New Smartphone Every Year] button was disabled when Red Essentials is chosen so as to mirror the Consumer pages." The Complaints Board also noted that before and after the webpage was amended, "the NEY portion had an asterisk alerting the customer to the fact that there were terms and conditions" attached to the plan. The Complaints Board noted that the Advertiser stated, in part:

"Vodafone submit that throughout the process, it is clear to customers that NEY is not available on Red Essential package, and that there are conditions of the offer. This information is given both in the 'more about this package' section and the plan terms and conditions, and customers are alerted to the fact that there is more to find out by the existence of the asterisk. As a consequence, the claims made by Vodafone on the website are not misleading, false or deceptive, nor do they abuse the trust of customers."

Turning to the advertisement before it, the Complaints Board said it was explicitly clear, there were terms and conditions associated with the promotions. The Complaints Board further noted that the advertisement did not state that the customer would get a new smartphone every year if they chose the Essentials plan and the likely consumer take out would be that there was an option of a new smartphone every year only with the two other Red Business plans.

The Complaints Board said that the advertisement was not misleading as it clearly stated that there was an option to have a new smartphone every year, which depended on which plan the customer chose. Further the Complaints Board noted the changes to the Advertiser's website to avoid any future confusion regarding the terms and conditions associated with the plans advertised.

Therefore the Complaints Board said the advertisement was unlikely to mislead to consumers into thinking that you would get a new smartphone every year with the Business Essentials Plan and was not in breach of Rule 2. Further the Complaints Board said the advertisement had been prepared with a due sense of social responsibility to consumers and society and was not in breach of Basic Principle 4 of the Code of Ethics.

Accordingly, the Complaints Board ruled unanimously to Not Uphold the complaint.



DESCRIPTION OF ADVERTISEMENT

The Vodafone website http://www.vodafone.co.nz advertised three Red Business telecommunications plans which were Red Business Essentials, Red Business and Red Business Super. The advertisement stated, in part:

"Do business better with Red.
Vodafone Red
Our Ultimate Smartphone package.

  1. Switch to Red
  2. Choose your smartphone. Get a new smartphone with the option of a new phone every year or keep your current phone and get a better monthly price
  3. Connect everything


The Red Business Essentials Plan stated the plan was "$95 excl GST per month for 24 months." The "more about this package" link listed "important things to know" which included the statement:

"New phone every year is not available with RED Business Essentials, and requires a customer to resign for a further 24 months and trade in of your current package phone (or pay an equivalent amount)."

The terms and conditions stated:

"10. New Phone Every Year. For Red Business Package, Red Business Super Package, Business Black Package and Business Black Data Package."


COMPLAINT FROM D. DIVETT

Vodofone advertises 3 plans with a replacement phone every year. In the T's and C's of the "Red Business Essential's" Plan they effectively cancel the offer. Therefore the advertisement / offer is misleading as a new phone will not be offered annually *Unless the customer re-signs for an additional 24 months.


RELEVANT CODE

Code of Ethics

Basic Principle 4: All advertisements should be prepared with a due sense of social responsibility to consumers and to society.

Rule 2: Truthful Presentation - Advertisements should not contain any statement or visual presentation or create an overall impression which directly or by implication, omission, ambiguity or exaggerated claim is misleading or deceptive, is likely to deceive or mislead the consumer, makes false and misleading representation, abuses the trust of the consumer or exploits his/her lack of experience or knowledge. (Obvious hyperbole, identifiable as such, is not considered to be misleading)

RESPONSE FROM ADVERTISER, VODAFONE NEW ZEALAND

  1. Thank you for your letter dated 17 September 2013 containing the complaint by D. Divett.

  1. The website referred to in the complaint by D. Divett is created and maintained internally by Vodafone, and no agency was involved.

  1. The Authority has identified the relevant section to be Basic Principle 4, Rule 2:

All Advertisements should be prepared with a due sense of social responsibility to consumers and society (Basic Principle 4)

Truthful Presentation : Advertisements should not contain any statement or visual presentation or create an overall impression which directly or by implication, omission, ambiguity or exaggerated claim is misleading or deceptive, is likely to deceive or mislead the consumer, makes false and misleading representation, abuses the trust of the consumer or exploits his/her lack of experience or knowledge. (Obvious hyperbole, identifiable as such, is not considered to be misleading (Rule 2)

  1. As we understand it, D. Divett's complaint relates to the fact that the product is not available on the Red Business Essentials package, and that there are terms and conditions attached to the Add On.

  1. D. Divett's complaint refers to a new Vodafone product known as New Smartphone Every Year ("NEY"). This product was launched on 26 August 2013, alongside a number of new Vodafone Consumer and Business packages. NEY allows a customer on certain plans to purchase a $20 monthly Add On which gives them the option to update their smartphone every year. This option is exercised by:

  1. Paying for the NEY Add On for at least 12 months
  2. Re-signing their plan early (at 12 months - rather than wait for their 24 month plan to expire)
  1. trade in the phone they received with their plan (or pay an equivalent amount).

  1. As there are a number of conditions of the offer, Vodafone has positioned this as the Add On gives the 'option' of a new smartphone, as a customer would need to decide whether they wanted to exercise the option by resigning and trading in.

  1. The way in which the Vodafone website promotes these new packages, is to 'hero' the Red Business plan, and note the Red Business Essentials and the Red Business Super packages as alternatives. When Vodafone refer to "Red Business" it is referring to the main package, rather than the suite of plans as a whole. This can be seen by reference to '1 - Switch to Red Business Vodafone Red Business is great for most businesses with worry free...But if you want more or less we've got that covered too.' The Red Business box is highlighted "recommended',

(http://www.vodafone.co.nz/redbusiness - see annexure A)

  1. Under this heading, there are the three package options - Red Business Essentials, Red Business and Red Business Super. Under the box describing Red Essentials, there is a link which provides "More about this package"

(http://www.vodafone.co.nz/redbusiness - see Annexure B). This link opens up an "Important things to know section which states:

New phone every year is not available with RED Business Essentials, and requires a customer to resign for a further 24 months and trade in of your current package phone (or pay an equivalent amount). The Add On must be purchased in the first month of your package and you must pay 12 consecutive payments before this is available

(Annexure C)

  1. At the bottom of the important things to know section , there is a link through to the full terms and conditions which also note at clause 10 that NEY is not available on Red Business Essentials and clearly sets out the terms and conditions. In particular, it states:

  1. New Phone Every Year

For Red Business Package, Red Business Super Package, Business Black Package and Business Black Data Package

New Phone Every Year is only available to Customers signed up to a 24 month term on the Red Business Package, Red Business Super Package, Business Black Package or Business Black Data Package.

With New Phone Every Year, you have the option to upgrade your phone once you have

  • remained on the Red Business Package or Red Business Super Package for 12 consecutive months, purchased the New Phone Every Year Add-On and made 12 consecutive monthly payments of $20 (inct GST);

  • returned to Vodafone for consideration in money of NIL the device you received with that Package {or a device of the same type, size and value) OR where you do not return your phone, or it is not in acceptable condition to Vodafone, you will pay Vodafone a compensation payment at an amount determined by Vodafone; and

  • signed up to a new 24 month Plan or Package.

(http://www.vodafone.co.nz/legal/terms-conditions/red-business see Annexure D).

  1. From this point, a customer will move to the second step "Choose your smartphone option - On Red Business, get a new smartphone with the option of a new phone every year, or keep your current phone and get a better monthly price."(emphasis added) As noted above, the reference to Red Business is a reference to the specific package, rather than the suite of packages. It is true that the option of a new smartphone is available on the Red Business package.

  1. In the attachments to D. Divett's complaint, it shows that on the Red Business page, the NEY "select" button was available to be selected. This button should have been disabled where Red Essentials is selected (as is the case with the Consumer version of these business plans), but this had not happened. We note that while the select button - appeared on the page, it was not possible to select the NEY product and the Red Essentials package at the same time.

  1. Since receiving the complaint by D. Divett Vodafone has updated the website to ensure the NEY button is disabled when Red Essentials is chosen so as to mirror the Consumer pages. See annexure E for the updated webpage

  1. It is noted that both before and after the webpage was amended, the NEY portion had an asterisk alerting the customer to the fact that there were terms and conditions.

  1. Vodafone submit that throughout the process, it is clear to customers that NEY is not available on Red Essential package, and that there are conditions of the offer. This information is given both in the 'more about this package' section and the plan terms and conditions, and customers are alerted to the fact that there is more to find out by the existence of the asterisk. As a consequence, the claims made by Vodafone on the website are not misleading, false or deceptive, nor do they abuse the trust of customers.

  1. In addition, it is submitted that any potential for a customer to be confused by the construct of the Red Business Essentials web page has now been alleviated through the amended web page.


Conclusion

  1. In light of the comments above, we ask that the complaint be NOT UPHELD.

  1. Please do not hesitate to contact the writer if you have any queries on the above, or require any clarification.