Redemption!

27 February 2006

Well, with many advertised offers you do just that and the £15 difference must be claimed back, after giving the service provider evidence of your bills at 3, 6 or 9 months during the rental period. Would you then expect a cheque for £45 at the end of 3 months?  You might do but you’d more likely find £45 credited to your network account instead.  Not only that but you might find you have to use that credit within a month or lose it.  Not exactly full of corporate social responsibility, is it?

It has become prevalent in the mobile phone industry to offer these reduced line rental charges, ‘cashback’ or gifts based on redemption offers, subject to the consumer providing evidence of the phone bill on given months during the rental period.  Those offers are generally from ‘agents’ or companies who are a ‘third-party’ to mobile service providers but, of course, the advice is applicable to all in the industry who make such redemption offers.

You will see from a recent adjudication that the ASA believes claims for reduced line rental charges, on the basis of a redemption policy, are not necessarily misleading but they can be misleading if not qualified or clarified.  In the vast majority of advertisements, the redemption policy is at best unclear from the advertisement and often complicated.

If the quoted price e.g. “£4.99 line rental per month” is one that the consumer never pays and the redemption mechanism is through credit to a network account, not through a refund of money, the ASA considers that the price claim is misleading.  If redemption is through the refund of money, a reduced price line rental claim is acceptable, provided the full cost of the monthly payments and the redemption information are explicitly and prominently stated.

The ASA also considers that describing credit to a network account as "cashback" is unacceptable and, if the redemption mechanism is credit to a network account, advertisers should state if that airtime has to be used within a specified time or period.

The Compliance team has written to mobile service providers to seek their written assurance that they will act to ensure future non-broadcast ads comply with the ASA’s adjudication.  The deadline for the changes in non-broadcast advertising is 3 February 2005.  The team will monitor non-broadcast ads and deal with those that do not comply with the ASA’s adjudication.  Vigilance from the media and all in the sector is appreciated with this potentially complex matter.

The ASA and CAP understand that you might need help to draw up your new ad copy so, if you do, please do not hesitate to consult the CAP Copy Advice team.  You can reach the Copy Advice team by telephone on 020 7492 2100, by fax on 020 7404 3404 or by e-mail at copyadvice@cap.org.uk or you may use AdviceOnline, a database of advice that is regularly updated and is available on the CAP website, www.cap.org.uk.