Ad description
Claims made on an energy company's own website, accessed in early April 2011.
Issue
Scottish and Southern Energy (SSE) challenged whether the claims:
1. "we guarantee to match or better the 'Big Six' Standard tariffs" was misleading, because the advertiser considered an average of the six companies' standard tariffs, rather than each company individually, and also because the advertiser considered a 5% difference matching; and
2. "Over the next few years, we will be obtaining secure renewable fuel sources with a view to providing 100% of our customers electricity requirements via renewable sources" was misleading, because it was not adequately qualified.
Response
1. Spark Energy Ltd (Spark Energy) said the qualifications for the claim that they “guarantee to match or better the ‘Big Six’ Standard tariffs” were clearly displayed in all communications. They said that the industry had numerous and complex tariffs and therefore some qualifications were necessary. They said that taking an average of the ‘Big Six’ tariffs and accepting a 5% variance as ‘matching’ allowed them time to react to the market should one competitor make a sudden pricing move.
2. Spark Energy said that at the current time they sourced 100% of their electricity from renewable sources and were contracted to continue to do so for the next few months, at which point they aimed to renew for a further six months. They said the claim “Over the next few years, we will be obtaining secure renewable fuel sources with a view to providing 100% of our customers electricity requirements via renewable sources”, referred to an aim on their part to do so. They said they continued to buy their electricity from small renewable generators.
Assessment
1. Upheld
The ASA noted that the claim to match or better the ‘Big Six’ standard tariffs was linked, via an asterisk, to text that read “Average of the ‘Big Six’ standard tariffs across the UK ... Plus or minus 5% is considered ‘Matching’ the ‘Big Six’ due to regular changes up or down in standard tariffs”.
We noted that CAP Code rule
3.35
3.35
They must objectively compare one or more material, relevant, verifiable and representative feature of those products, which may include price.
stated that comparisons with identifiable competitors “must objectively compare one or more material, relevant, verifiable and representative features of those products”. We also noted rule
3.39
3.39
Marketing communications that include a price comparison must make the basis of the comparison clear.
CAP has published a Help Note on Retailers' Price Comparisons and a Help Note on Lowest Price Claims and Price Promises.
stated “Comparisons with a competitor price must be with the price for an identical or substantially equivalent product and must explain significant differences between the products ...” We considered that, although the footnote made clear the basis for the comparison, consumers were unlikely to consider that a promise to match or better an average of six competitors’ prices was a comparison with an identical or substantially equivalent competitor product because an average of the six standard tariffs could be skewed by one particularly expensive tariff from one provider. For these reasons, we also did not consider an average of the standard tariffs of six competitors to be relevant or representative. Neither did we consider accepting a 5% variance would be recognised by the average consumer as ‘matching’. Because we considered that the caveats contradicted rather than qualified the claim, we concluded that it was misleading.
On this point, the ad breached CAP Code (Edition 12) rules
3.1
3.1
Marketing communications must not materially mislead or be likely to do so.
and
3.3
3.3
Marketing communications must not mislead the consumer by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that the consumer needs to make informed decisions in relation to a product. Whether the omission or presentation of material information is likely to mislead the consumer depends on the context, the medium and, if the medium of the marketing communication is constrained by time or space, the measures that the marketer takes to make that information available to the consumer by other means.
(Misleading advertising),
3.35
3.35
They must objectively compare one or more material, relevant, verifiable and representative feature of those products, which may include price.
(Comparisons with identifiable competitors) and
3.39
3.39
Marketing communications that include a price comparison must make the basis of the comparison clear.
CAP has published a Help Note on Retailers' Price Comparisons and a Help Note on Lowest Price Claims and Price Promises.
(Price comparisons).
2. Upheld
We noted Spark Energy’s response. However, we noted that the claim said “Over the next few years, we will be obtaining secure renewable fuel sources” and considered this implied they had a strategy in place to secure renewable electricity sources over several years. We understood that the best practice guidance on environmental claims in the Department for Environment, Food and Rural Affairs "Green Claims Guidance" (2011), stated “Future claims should be supported by publicly available plans or a strategy that provides details about the intended actions to achieve the target.” Because Spark Energy’s response revealed that their current renewable sources were secured for a few months only, and their plans beyond then only extended for up to a year, we considered that the unqualified claim was likely to mislead.
The ad breached CAP Code (Edition 12) rules
3.1
3.1
Marketing communications must not materially mislead or be likely to do so.
and
3.3
3.3
Marketing communications must not mislead the consumer by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that the consumer needs to make informed decisions in relation to a product. Whether the omission or presentation of material information is likely to mislead the consumer depends on the context, the medium and, if the medium of the marketing communication is constrained by time or space, the measures that the marketer takes to make that information available to the consumer by other means.
(Misleading advertising),
3.7
3.7
Before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers are likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation.
(Substantiation) and
11.1
11.1
The basis of environmental claims must be clear. Unqualified claims could mislead if they omit significant information.
(Environmental claims).
Action
The claims found to be in breach of the Code must be removed.
