ASA Reverse Old Decision and Bans O2 UK Advert for Misleading Price

The Advertising Standards Authority has reversed an old decision by choosing to ban an early 2014 press advert for one of O2’s mobile tariffs, which was found to mislead because of small print that contradicted the headline cost by pointing to an RPI (inflation) linked price rise.

The original promotion was for a tariff that bundled in the iPhone 5c Smartphone (no upfront cost) for £32 per month and also included O2’s £12 Airtime Plan, but the small print also mentioned a future inflation linked price increase: “Airtime Plan prices will go up on your March 2014 bill by the Retail Price Index (RPI) rate of inflation (2.7%) and from 2015 will be adjusted on your April bill every year by the RPI rate.”

At the time consumer magazine Which? joined two other people in complaining that the advert was misleading because they believed that the headline price was contradicted by the small print. The original ruling did NOT uphold that complaint, although after a dispute the ASA has now reversed that decision and banned the advert. It only took them two years.

The situation appears to have stemmed from confusion over Ofcom’s rule against mid-contract price rises, which was introduced at around the same time as the advert (here). Back then a spokesperson for O2 said, “Ofcom has confirmed that communications providers’ terms which explicitly provide for a customer’s monthly subscription to change each year in line with a specific percentage or index (like RPI) will not contravene its “fixed means fixed” guidance, provided such terms and prices are made clear to customers before they sign up.”

ASA Ruling (REF: A14-258322)

Although we acknowledged that the initial RPI increase was small, and any subsequent 2015 increase was also likely to be small (as indeed it was), the consumer telecoms market was highly competitive on price and the ad promoted a specific product and focused on its price.

Because the tariff would almost certainly be higher than £32 for 23 months of a 24 month contract, and the text at the foot of the ad was not sign-posted or sufficiently prominent, we considered that the headline claim in isolation was likely to mislead.

Further, even when read as a whole, we considered the ad was ambiguous and likely to mislead a significant proportion of consumers because the table and footnote contradicted, rather than clarified, the headline price.

The ASA told O2 to ensure that future ads offering new contracts “did not make headline price claims that were likely to mislead“.