Background
Summuary of Council decision:
Four issues were investigated, all of which were Upheld.
Ad description
Two national press ads for free trials of cosmetic products:
a. The first ad included text that stated "The NEXT BIG THING in colour cosmetics has finally arrived in the UK! NEW airbrushed Krystal Klear make-up is finally here to TRY FOR FREE! ... So what's the catch? Well with a FREE TRIAL this complete they simply can't afford to give too many away ... UK women can take advantage of this incredible launch free trial kit including 15 of the world's most flawless cosmetics simply by calling the UK distributors on [telephone number] starting at 8am today and ending in just 5 days".
b. The second ad included text that stated "Could THIS Jellyfish hold the secret to the fountain of youth? Scientists believe that a common Jellyfish could be the most powerful breakthrough for ageing skin ever discovered! ... Call [telephone number] to be part of the free trial today! ... The manufacturers of IMMORTAL are so confident that their cosmetic cream is better than any other anti-ageing cream on the market that they are giving away 1,000 jars for FREE so you can see the results on your own skin, before you pay ... to secure your place in the free trial and to claim your FREE jar give away ... FREE JAR & FREE GIFTS! ... T&C's apply. Postage and packaging fee applies".
Issue
The ASA received two complaints:
One complainant, who saw ad (a) and understood that charges could be applied when they requested the trial kit, challenged whether:
1. the claim "free" was misleading; and
2. the ad was misleading because it did not make the potential charges clear.
The second complainant, who saw ad (b), challenged whether the omission of:
3. the fact that to avoid paying a charge at the end of the free trial for unused jars, consumers had to call a phone number in Australia and pay to return the goods to an Australian address was misleading; and
4. the fact that by accepting the trial kit the consumer was also accepting a recurring order to be sent every 90 days was misleading.
Response
1. HiLife Health & Beauty Pty Ltd (HiLife) stated that they did not agree that it was misleading to describe the 16-day trial advertised in ad (a) as "free". They believed that the references in the ad "TRY IT FOR FREE", "to try for free for 16 days" and "FREE TRIAL" made clear to consumers that the offer advertised related to a 16-day trial of the product that was free of charge, rather than that they would receive the products free of charge without any trial period.
HiLife asserted that consumers would understand that this offer of a free trial period was comparable to purchasing sample size products or visiting stores to trial alternative products. They stated that the benefit of the advertised offer was that consumers were able to sample the products in their own home with no upfront charges incurred during the trial period.
HiLife explained that the goods that consumers would receive upon registering for the trial consisted of two parts: the first, being the main part of the product trial, consisted of products that consumers would sample for free during the trial period of 16 days; and the second being products that were gifts which consumers could keep free of charge regardless of whether they decide to pay for the main trial product range.
HiLife asserted that on the basis that the postage and packaging were free and the telephone number stated was a free 0800 number, consumers would have sampled the products for up to 16 days without charge, in addition to receiving a free gift, provided that they cancelled the trial within 16 days. HiLife did not therefore accept that it was misleading to describe the offer as a free trial.
2. HiLife explained that when consumers signed up for the free trial by phone they were informed that they had 16 days to sample the main product range and that a charge of £99.95 would be deducted from their credit card if they did not contact HiLife to cancel the trial before the end of the trial. They said that although these conditions were not made expressly clear in the ad, consumers were made aware of the potential charges if they did not cancel before the end of the trial, before being asked to provide their credit card details over the phone and that they were not obliged to sign up for the trial at this stage. They further stated that customers were offered an opportunity to buy the product upfront during the call at a discounted price.
HiLife argued that the ad made clear the trial lasted for only 16 days and did not state that consumers would be able to keep the full product range after the trial period had expired. They said the average consumer would understand that it was reasonable for a company to request consumers' credit card details as a form of insurance in the event of a customer's refusal to return the product range with a market value of £99.95. HiLife confirmed that customers who cancelled within the 16-day period had been advised that they were able to keep the main product range without the requirement to return the goods.
3. HiLife responded that the telephone number that consumers would be required to call in order to cancel the trial was a 0800 number and at no stage were consumers forced to pay for international calls to Australia. They also stated that customers were charged the cost for postage and packaging when the trial bundle and free gifts were dispatched to them in the post and that the ad stated postage and packaging fees would apply.
4. HiLife did not accept the complainant's suggestion that customers who signed up for the trial were accepting a recurring order to be sent every 90 days. They stated that they did not actively market the replenishment of the three Immortal jars that the consumers received when they signed up to the trial.
Assessment
1. & 2. Upheld
The ASA noted HiLife's comments that consumers were made aware of the fact, during a phone call and before credit card details were requested from them, that they would be charged the cost of the trial products if they did not cancel the trial within the 16-day period. However, we considered the fact that customers' credit card accounts would be debited if they did not contact the advertiser to cancel the trial before the expiry of the trial period was material information that was likely to influence consumers' decision as to whether or not to take action on the advertised trial. We considered that in the absence of such information, the ad was likely to give the impression that consumers would be able to sample the listed product without further financial or contractual obligations. We also noted that the ad did not specify that the promotion would be subject to terms and conditions or state where the terms of the trial could be found.
Further, we considered that the requirement for consumers to provide their credit card details in order to receive the trial bundle was material information that should have been stated in the ad.
On the basis that the ad did not include material information that consumers would require to make informed decisions regarding this trial and also that it did not make clear the extent of the commitment that customers must take in order to take advantage of the "free" trial as required by the CAP Code, we concluded that the ad was misleading.
On these points, ad (a) 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.
3.4.5
3.4.5
the arrangements for payment, delivery, performance or complaint handling, if those differ from the arrangements that consumers are likely to reasonably expect
(Misleading Advertising),
3.9
3.9
Marketing communications must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify.
(Qualification),
3.17
3.17
Price statements must not mislead by omission, undue emphasis or distortion. They must relate to the product featured in the marketing communication.
(Prices) 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).
3. Upheld
We noted HiLife's comments that the telephone number for the cancellation of the trial was an 0800 telephone number. However, we understood from the evidence provided by the complainant that, in order to request a Returns Authorisation Code from the advertiser's Customer Support Centre necessary for the return of the trial products if a customer was not satisfied with them, they would be required to call an Australian telephone number to do so and would potentially incur costs for the international call. We also understood from the evidence provided by the complainant that the trial products must be returned to an Australian address, once the Returns Authorisation Code had been obtained.
We also noted HiLife's comments that postage and packaging fees would be charged when the trial products were dispatched and that the ad stated postage and packaging fees would apply. However, we understood that consumers would also be responsible for all postage and handling charges associated with the return of the trial products under the terms of the promotion. We noted that small print at the bottom right of the ad stated "T&C's apply. Postage and packaging fee applies". However, we considered that it did not make clear whether the postage and packaging fee referred to the charges incurred upon dispatch or the cost of returning the product, and in particular that returns must be sent to an Australian address, which we considered to be material information that consumers required to make informed decisions in relation to the promotion.
For the above reasons, we concluded that, by omitting the information stating that consumers were required to call an Australian telephone number to arrange returns and to return the products to an Australian address, the ad 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.
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.
3.4.4
3.4.4
delivery charges
3.4.5
3.4.5
the arrangements for payment, delivery, performance or complaint handling, if those differ from the arrangements that consumers are likely to reasonably expect
(Misleading Advertising),
3.9
3.9
Marketing communications must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify.
(Qualification),
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.
and
3.24.1
3.24.1
the consumer has to pay packing, packaging, handling or administration charges for the "free" product
(Free).
4. Upheld
We noted HiLife's comments that they did not actively market the replenishment of the trial products. However, we understood from the evidence provided by the complainant that they would receive a replenishment of the products after 90 days unless they contacted the advertiser to cancel the order prior to the shipment. We considered that the automatic enrolment to a subscription upon signing up to the trial constituted material information that was likely to influence consumers' decisions as to whether or not they would sign up to the "free" trial and provide payment details, given that they would incur additional and recurring costs for the subscription if they did not cancel the order. This was information about the commitment they would have to make in order to take advantage of a "free" offer. It should therefore have been made clear in the ad.
Although we noted that the small print at the bottom-right of the ad stated "T&C's apply", we considered that this statement was not sufficiently prominent and did not direct consumers to an alternative medium where this information was available. In the absence of such information, we concluded that the ad 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.
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),
3.9
3.9
Marketing communications must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify.
(Qualification),
3.17
3.17
Price statements must not mislead by omission, undue emphasis or distortion. They must relate to the product featured in the marketing communication.
(Prices) 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 ads must not appear again in their current forms. We told HiLife Health & Beauty Pty Ltd to ensure that future ads should state material information that consumers would require in order to make an informed decision about their promotions and that the ads make clear the extent of commitment that consumers must make in order to take advantage of the "free" offer.
CAP Code (Edition 12)
3.1 3.17 3.23 3.24.1 3.26 3.3 3.4.4 3.4.5 3.9
