Advertising rules state that “Marketers should not describe an element of a package as “free” if that element is included in the package price…” Some internet or telephone packages require a monthly or quarterly fee but include so-called “free” calls or access. Claims such as “free off-peak calls to landlines”, “free internet access” or “free calls to other numbers on our network” are common. The Advertising Standards Authority (ASA) has ruled that, although it has no objection to a “free” product or component of a product being dependent on the purchase of another product, marketers should not confuse the difference between components that are “included” in the price and those that are genuinely free.
A good rule of thumb is that, if the “free” component is limited to a short-term promotion, the use of the word “free” is likely to be acceptable (e.g. “sign up by the end of the month and get 50 free texts”). If, however, the product’s pricing has been calculated to include a certain number of off-peak minutes or texts for which the marketer will not make a separate charge, the term “inclusive” is the right one. Similarly, if a product changes so that an additional component is offered in the long term, that extra component is “inclusive”, not “free” (Vodafone Ltd, 27 October 2004).
In 2013 the ASA investigated a website offering a “free” phone with particular tariffs. The complainant objected that the handset was included in the monthly contract price. The ASA noted that cheaper similar SIM-only tariffs were available, while the direct equivalent SIM-only tariff was not available on the same SIM-type as the “free phone”. It considered that this demonstrated that the £25 per month cost in the ad included the cost of the phone and upheld the complaint (The Carphone Warehouse Ltd, 20 Nov 2013).
Where a component is optional, the ASA has ruled that it is legitimate to describe it as “free” (Video Networks Ltd, 6 July 2005). However, marketers should be wary of describing services such as the activation fee or installation fee as “free”, even if they stop charging for them on a short-term promotional basis. In July 2012, the ASA ruled that Virgin Media could not describe their TiVo box activation as free on packages where they had stopped charging for it. Because it formed an existing part of the TiVo bundle, it should have been described as a price reduction, rather than “free” (Virgin Media Ltd, 18 July 2012).
Source: Committee of Advertising Practice (CAP)
Note: This advice is given by the CAP Executive about non-broadcast advertising. It does not constitute legal advice. It does not bind CAP, CAP advisory panels or the ASA. CAP’s AdviceOnline entries provide guidance on interpreting the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing.
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