Complaint: 14/348

Vodafone Newspaper

Details

Complainants
S. Clarke
advertisers
Vodafone
Year
2014
Media
Print
Product
Telecommunications
Clauses
Decision
Not Upheld
ASA Links
Website Listing
Decision Document

Document

COMPLAINT NUMBER
14/348
COMPLAINANT
S. Clarke
ADVERTISER
Vodafone New Zealand Limited
ADVERTISEMENT
Vodafone Newspaper
DATE OF MEETING
22 July 2014
OUTCOME
Not Upheld


SUMMARY

The newspaper advertisement for Vodafone showed a large image of the iPhone 5s and offered the new phone "at a price you will love. Get it for only $39 per month over 24 months when you buy iPhone 5s 16GB on selected plans. Pay just $99 up front." Alongside the image of the phone was a black circle that stated: "Get it on a $39 open term plan." The terms and conditions stated "... Paying for your iPhone 5s over 24 months for $78 is based on a $39 open term plan and requires an upfront payment of $99. You need to pay your $39 monthly fee in addition to9 the monthly device charge of $39."

The Complainant said the advertisement was misleading and stated: "It is not a normal expectation that the fine print would double the costs of the monthly payment."

The Complaints Board noted two different deals were clearly stated and, while the prices for the deals were the same, information about the payments for the phone was clearly included in the terms and condition at the bottom of the advertisement.

When addressing the Complainant's view that it is "not a normal expectation that the fine print would double the costs of the monthly payment," the Complaints Board disagreed saying the terms and condition was the appropriate place for further information about the deal to be included for consumers.

It also noted Vodafone had amended the advertisement in response to the complaint. However, it said the original version of the advertisement had clearly contained all the conditions of the offer and said the original version that was subject to the complaint was unlikely to mislead the majority of consumers and had been prepared with the requisite standard of social responsibility to consumers and to society.

The Complaints Board ruled to Not Uphold the complaint.

[No further action required]

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



COMPLAINTS BOARD DECISION

The 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 Complainant's concerns that the advertisement would mislead consumers as it was "not a normal expectation that the fine print would double the costs of the monthly payment."

The Complaints Board then noted the response from Vodafone and noted where it stated: "The advertisement S. Clarke refers to appeared in this format in press (6,8,13 and June) and in Vodafone stores and Malllights between 1 -- 15 June 2014 and "includes the relevant terms, ie that the customer must make an upfront payment, the balance is paid over 24 months, and the customer must sign up to a selected plan."

Vodafone continued "Unfortunately, in this instance the plan which was recommended, has the same monthly cost as the device payment, which has caused confusion for the customer."

The Complaints Board agreed. Looking at the advertisement, it noted two different deals were clearly stated and, while the prices for the deals were the same, information about the cost of the new phone was clearly expressed in the terms and conditions.

When addressing the Complainant's view that it is "not a normal expectation that the fine print would double the costs of the monthly payment" the Complaints Board disagreed saying the terms and condition was the appropriate place for further information about the deal to be included for consumers.

However, the Complaints Board noted that Vodafone had revised the advertisement that promoted the iPhone 5s deal. Vodafone continued: "From 16 June 2014, these advertisements were removed from the market to make room for other Vodafone offers ... In the June Guide the form of the advertising was different and made the total monthly payment required clearer to the customer. This advertising states in the body of the advertisement that the payment is $78 per month for 24 months, plus $99 upfront $39 open term plan and $39 monthly device payments.

For the July Instore Guide this advertising was repeated, and in addition, a full page advertisement was included for MDP which relates to the offer which is the subject of this complaint. This advertisement makes it clear upfront that the payment required is $78 per month."

The Complaints Board noted the self-regulatory action of Vodafone in amending the advertisement. However, it said the original version of the advertisement had clearly contained all the conditions of the offer and it was appropriate that information be included in the terms and conditions section of the advertisement. As such the original advertisement was unlikely to mislead the majority of consumers and had been prepared with the requisite standard of social responsibility to consumers and to society. Therefore, the Complaints Board ruled the original version of the advertisement that was subject to the complaint had not breached Basic Principle 4 or Rule 2 of the Code of Ethics.

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



DESCRIPTION OF ADVERTISEMENT

The newspaper advertisement for Vodafone showed a large image of the iPhone 5s and offered the new phone "at a price you will love. Get it for only $39 per month over 24 months when you buy iPhone 5s 16GB on selected plans. Pay just $99 up front."

A black circle on the right-hand side of the advertisement said "Get it on a $39 open term plan."

The terms and conditions at the bottom of the advertisement stated, in part: "Monthly Device Payments. Paying for your iPhone 5s over 24 months for $78 is based on a $39 open term plan and requires an upfront payment of $99. You need to pay your $39 monthly fee in addition to9 the monthly device charge of $39."

COMPLAINT FROM S. CLARKE

The big print on the advertisement states that you can get a new iPhone 5s for $39 per month over 24 months, with a $99 upfront payment. The ad also contains a bubble that says "Get it on a $39 open term plan".

There is small print on the advertisement, which I did not look at. I expected this to be the usual terms and conditions, penalty for early termination, need to meet credit criteria etc.

When I went in to the store, the advertisements in the store said you need to pay $78 per month. It transpires that the fine print (which I have now read in the newspaper ad) includes mention of a "device payment" of an additional $39 per month.

I think this is misleading. It is not normal expectation that the fine print would double the cost of the monthly payment.

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 LIMITED

Complaint 14/348 Vodafone Newspaper Advertisement -- Complaint by S. Clarke

  1. Thank you for your letter dated 26 June 2014 containing the complaint by S. Clarke.

  1. This advertisement was created in conjunction with FCB on instructions from Vodafone.

  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. This complaint relates to a new payment option offered by Vodafone known as Monthly Device payment ("MDP"). MDP allows a customer to pay the cost of selected handsets over the course of 24 months without incurring any interest. The main terms of this offer

are as follows:

  1. The customer must make an upfront payment of $99 (or another amount as specified);
  2. The balance of the handset price is paid over 24 months; and
  1. The customer must sign up to a selected open term plan.

  1. The advertisement S. Clarke refers to appeared in this format in press (6,8,13 and June) and in Vodafone stores and Malllights between 1 -- 15 June 2014

  1. It is submitted that the relevant information that relates to this offer was included in the text below the headline "Get it for only $39 per month over 24 months when you buy iPhone 5s 16GB on selected plans. Pay just $99 upfront"

  1. This line includes the relevant terms, ie that the customer must make an upfront payment, the balance is paid over 24 months, and the customer must sign up to a selected plan.

  1. In addition, the circle callout recommends a plan "Get it on a $39 open term plan" and the terms on the advertisement specifically set out "Paying for your iPhone 5s over 24 months for $78 per month is based on a $39 open term plan and requires an upfront payment of $99. You need to pay your $39 monthly plan fee in addition to the monthly device charge of $39".

  1. Unfortunately, in this instance the plan which was recommended, has the same monthly cost as the device payment, which has caused confusion for the customer. This was not Vodafone's intention.

  1. From 16 June 2014, these advertisements were removed from the market to make room for other Vodafone offers.

  1. The Vodafone Instore Guide for June also has included reference to the MDP. In the June Guide the form of the advertising was different and made the total monthly payment required clearer to the customer. This advertising states in the body of the advertisement that the payment is $78 per month for 24 months, plus $99 upfront $39 open term plan and $39 monthly device payments. A copy of the relevant page from the June Guide is attached to this letter ("A").

  1. For the July Instore Guide this advertising was repeated, and in addition, a full page advertisement was included for MDP which relates to the offer which is the subject of this complaint. This advertisement makes it clear upfront that the payment required is $78 per month ("B")

  1. It is Vodafone's intention to continue to promote this payment option in this way.

14. It is submitted that the advertisement in the original form (as set out in the complaint), while causing some confusion for this particular customer, included all of the relevant information. Accordingly, it was created with a sense of social responsibility, and was truthful and not misleading and not in breach of the ASA Code of Ethics.

15. In addition, Vodafone believes the revised way of marketing this payment option (appearing in attachments A and B), will assist in ensuring that this new payment option, the relevant terms and total monthly amount payable is as clear as possible for our consumers going forward.


Conclusion

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

15. Please do not hesitate to contact the writer if you have any queries on the above, or require any further information.