Background
Summary of Council decision:
Two issues were investigated, both of which were Upheld.
Ad description
A direct mailing sent to consumers with Amazon accounts, included a plastic card which stated "30-DAY FREE TRIAL For [recipient's name]. Go to amazon.co.uk/videoprime".
The letter stated "Dear XXXXX, I'm sending you this letter because I want you to know that you are eligible for a free trial of Amazon Prime. You may already know that Prime includes Unlimited One-Day Delivery on over 7 million items on amazon.co.uk, but did you know Prime also gives you unlimited access to thousands of digital Movies and TV shows? Start your 30-day free trial today and watch as much as you want". The compatible devices were listed and text continued "Getting started is easy. Start your 30-day free trial today. Find the ... app on your device, download it and sign in with your Amazon account. Or go to www.amazon.co.uk/videopiv to learn more. That's all there is to it. Enjoy your 30-day free trial and watch more than 15.000 videos ...". The letter included further information about films and TV shows available.
Small text at the bottom of the letter in the "Offer terms" stated "Paid subscription starts automatically after free trial unless cancelled".
Issue
Six complainants, challenged whether the ad was misleading because:
1. it did not make sufficiently clear that a paid subscription would automatically start if not cancelled during the free trial; and
2. it did not state what the cost of the subscription would be.
Response
1. Amazon Europe Core Sarl stated the ad was not currently appearing. They said the "Offer Terms" section in small print at the bottom of the letter explicitly stated that "Paid subscription starts automatically after the free trial unless cancelled" and they therefore considered that the ad made it clear that a paid subscription to Amazon Prime would automatically start if membership to Amazon Prime was not cancelled during the free trial. They added that the ad directed customers wishing to take advantage of the 30-day free trial of Amazon Prime membership to "learn more" by visiting the listed web link and stated that customers were only able to register for and activate a 30-day free trial of Amazon Prime via that link. They said that during the online registration process customers were again made aware that they would be charged a fee for their Prime membership, after the 30-day free trial period, unless cancelled by the customer.
They said the ad repeatedly stated that the "free" element of the trail was time-limited and, on all but one of the occasions on which the word "free" was used, it was preceded by "30 day". They believed it was therefore clear from the main body of the ad that something would change after 30 days and added that the 'Offer Terms' clarified and explained what would happen. They considered it was common practice for promotions offering free trials for services to convert to a paid subscription for those services unless the subscription was cancelled during the free trial and that consumers would therefore understand and expect that they had to cancel within the free-trial period if they did not want to start a paid subscription.
They believed that the 'Offer Terms' would have been easily noticeable to customers when reading the letter, given its relative size, and considered it was large enough to be readily legible. They stated that the 'Offer Terms' were very close to the last line of text in the main body of the ad and were easy to read. They said the letter was all contained on one page and the terms took up as much space as some paragraphs in the main body. They considered that consumers would therefore notice the terms.
They stated that customers were able to cancel their membership to Amazon Prime at any time during the 30-day free trial period and where customers cancelled their membership, they would not be charged further, and membership to Amazon Prime would automatically cease when the 30-day free trial period ended; for example, a consumer who cancelled their subscription the day after they took it up was still able to use 30 days of Prime for free. They stated that no payment was taken until after the 30-day free trial expired and no payment was needed for consumers to take up the free trial. They considered that it was not a condition of the 30-day free trial that consumers had to convert to the paid subscription at the end of it to take advantage of the free trial. If a consumer did not cancel before the end of the 30-day free trial, the paid subscription would start at the end of the free trial and was not backdated, so the consumer received 30 days free, on top of the paid subscription, and paid subscribers were not retrospectively charged for the initial 30-day period.
They added that, in three places in the main body of the ad (including on the removable card), consumers were invited to go to the web link, where more information was clearly and prominently available. That information included the cost of the subscription and that the paid subscription started automatically after the trial period finished, if it was not cancelled. They provided screen shots of the sign-up pages in the web link.
2. They believed the ad made clear to customers that Amazon Prime would be available for free for the first 30 days of their Prime membership, and, as part of the registration process for the 30-day free trial of Amazon Prime, customers were made aware of the cost of Prime membership once the free-trial period had finished. Therefore, they believed that customers were made aware of the cost of continuing their Prime membership before agreeing to take advantage of the 30-day free trial for Amazon Prime.
Assessment
1. Upheld
The Code stipulated that marketing communications must make clear the extent of the commitment consumers must make in order to take advantage of a "free" offer. The ASA considered that a paid subscription starting automatically at the end of the trial was a commitment and a significant condition of the "free" offer, and should therefore be made clear to consumers. Although we acknowledged that the small print stated "Paid subscription starts automatically after free trial unless cancelled", we also considered that the text in the main body of the ad stressed the "free" nature of the offer and noted it did not refer to the automatic paid subscription. We did not consider that it was sufficient to include the information about the automatic paid subscription in the small print of the ad only and therefore did not consider that that information was sufficiently prominent to make clear the extent of the commitment consumers must make to take advantage of the offer. We concluded the ad was likely to mislead.
On that 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.
(Misleading advertising),
3.10
3.10
Qualifications must be presented clearly.
CAP has published a Help Note on Claims that Require Qualification.
(Qualification) and
3.23
3.23
Marketing communications must make clear the extent of the commitment the consumer must make to take advantage of a "free" offer.
(Free).
2. Upheld
We understood that the subscription fee for a 12-month subscription to Amazon Prime was £79 per year and the subscription fee for Amazon Prime Instance Video was £5.99 per month (which could be cancelled at any time). We noted that the ad did not state the extent of the financial commitment that consumers must make if they did not cancel the subscription during the trial. We considered that the amount of the subscription fee was material information and a condition of the offer of which consumers should be made aware. We did not consider it was sufficient to set out that information in the subsequent online registration process. Therefore, because the subscription fee was not detailed in the ad, we concluded that the ad was likely to mislead.
On that 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.
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),
3.10
3.10
Qualifications must be presented clearly.
CAP has published a Help Note on Claims that Require Qualification.
(Qualification) and
3.23
3.23
Marketing communications must make clear the extent of the commitment the consumer must make to take advantage of a "free" offer.
(Free).
Action
The ad must not appear again in its current form. We told the advertisers to ensure that the significant condition that the paid subscription started automatically after the free trial unless cancelled was included in the main body of the ad and that the ad also informed consumers of the extent of the financial commitment they must make if they did not cancel the subscription during the trial.
