ASA Adjudication on Webfusion Ltd
Webfusion Ltd t/a
5 Roundwood Avenue
8 August 2012
Internet (sales promotion)
Number of complaints:
An ad describing a voucher offer for customers who had purchased domain names, on www.123-reg.co.uk, stated "Claim your free advertising If you spend more than £30 on domain names in one order, we'll give you a £20 voucher to spend on advertising with Google AdWords. The search engines will be impressed when they rank your site. Claim your FREE Google AdWords". Small print at the bottom of the web page stated "*All prices exclude VAT". The ad linked to a "Terms & conditions" page, which included text that stated "Domain names: when you spend more than £30 on domain names in a single order, you'll receive a £20 Google AdWords voucher." Small print at the bottom of the web page stated "*All prices exclude VAT".
The complainant challenged whether the claim "when you spend more than £30 on domain names in a single order, you'll receive a £20 Google AdWords voucher" was misleading, because it did not make clear that customers must spend £30, excluding VAT, in order to claim the voucher.
CAP Code (Edition 12)
Webfusion Ltd t/a 123-reg.co.uk (Webfusion) said that the customer journey through the order process gave customers the VAT total, so they should be aware as to whether they were eligible for the voucher. They said they were willing to amend the ad so that it made clear that the £30 excluded VAT, or to state "... when you spend more than £30 (£36 including VAT) ..."; they considered those suggested changes would mean the ad was not misleading in any way.
The ASA acknowledged that Webfusion had offered to make one of two suggested amendments to the claim to state that the £30 minimum spend required to qualify for the offer excluded VAT. However, we considered that would not be sufficient to ensure the ad complied with the Code. We understood that a number of Webfusion's customers were non-business consumers who were liable to pay VAT on their purchases. We therefore considered that all price statements on the website, including those which related to the minimum spend required to qualify for offers, should be VAT-inclusive. We concluded the ad was misleading.
The ad breached CAP Code (Edition 12) rules 3.1, 3.4.3 (Misleading advertising) and 3.18 (Prices).
The ad must not appear again in its current form. We told Webfusion that VAT-exclusive prices may be given only if all consumers to whom the price claim was addressed paid no VAT or could recover VAT. We also told them that marketing communications that quoted VAT-exclusive prices must prominently state the amount or rate of VAT payable.