ASA Adjudication on Localphone Ltd
Localphone Ltd
4 Paradise Street
Sheffield
S1 2DF
Date:
4 July 2012
Media:
Internet (search engine)
Sector:
Computers and telecommunications
Number of complaints:
1
Complaint Ref:
A12-189422
Background
Ad
A Google sponsored search result for Localphone Ltd, a telecoms company, stated "Call Peru for 0.8p/min ... Cheap Calls to Peru - Try a Free Test Call Today!"
Issue
The complainant challenged whether the ad was misleading, because the price quoted was exclusive of VAT.
CAP Code (Edition 12)
Response
Localphone Ltd (Localphone) said their ads were in line with those of their competitors and that, when consumers clicked through to their website, the VAT inclusive price was shown. They told us that they had amended the search listing to show the VAT inclusive price but that they felt this put them at a disadvantage compared to their competitors
Assessment
Upheld
The ASA noted the ad quoted a VAT exclusive price and that the Code made clear that VAT exclusive prices may be given only if all consumers to whom the price claim is addressed pay no VAT or can recover VAT. Because we understood that was not the case, we concluded that it was misleading for Localphone to quote a VAT exclusive price in sponsored search results.
The ad breached CAP Code (Edition 12) rules 3.1 (Misleading advertising), 3.3 (Misleading advertising) and 3.18 (Prices).
Action
The ad must not appear again in its current form. We told Localphone not to state VAT exclusive prices unless all consumers to whom the price claim is addressed pay no VAT or can recover VAT.
