Ad description
a. A landing page, which consumers were directed to from a link that appeared on social media, for an online shoe retailer JustFab (UK) Ltd seen on 1 October 2016 featured text that stated, “JUST FAB National Bootie Day New VIP Member Exclusive First Style from £9 That’s 75% Off” and featured a button that stated “GET STARTED”. Further down the page was the text “New VIP Member Exclusive FIRST PAIR FROM £9 HOW IT WORKS Take Our Short Style Quiz And Get 75% Off Your First Item ONLY TAKES ONE MINUTE!”. Underneath this was another button which stated “Get Started”. At the bottom of the page was small print that stated “Select VIP Member option at checkout to receive the offer. Offer cannot be applied to Regular orders. The items of lesser value will be free. Cannot be combined with any other offer or applied to any previous order. Good for one order only. Free delivery to UK on all orders £35 and above”.
b. The home page of the website, www.justfab.co.uk, featured text that stated “1 TAKE A FUN STYLE QUIZ 2 GET A PERSONALISED BOUTIQUE 3 SHOP, BECOME A VIP MEMBER AND SAVE”. Half-way down the home page was further text that stated “EXCLUSIVE MEMBER PRICING VIP members enjoy member-only pricing on all full-priced styles …”. Upon clicking on the two pieces of text consumers were directed to the style quiz and once completed, required to register as a member. They were then able to purchase their first pair of shoes at the discounted price.
At the bottom of the page was a pink box with text that stated “HERE’S HOW IT WORKS Shop or Skip the Month The choice to shop is always yours! If you need more time to shop or have decided not to purchase, click Skip the Month button in your boutique by the 5th of each month and you won’t be charged. You can Skip as many months as you want! VIP Member Credit If you don’t shop or Skip the month by the 5th of each month, your card will be charged £35 on the 6th for a member credit until you cancel. Each credit can be redeemed toward 1 JustFab item, so use it to shop later! Cancel Any Time If you’re not completely satisfied with your VIP membership, you can cancel it at any time by calling our Member Services Team on 020 36953 830 …”. Below this was small print that stated “Upon enrolment in the VIP membership programme, if you do not make a purchase or log into your account to Skip The Month between the 1st and the 5th of the month, your credit card will be charged £35 for a member credit on the 6th until you cancel. You may cancel at any time by calling 020 36953 830 …”.
Issue
Four complainants, who joined the JustFab website as a “VIP” member and subsequently discovered that they had enrolled on a £35 per month subscription contract, challenged whether that information had been made sufficiently clear in ads (a) and (b).
Response
JustFab (UK) Ltd stated that ad (a) was a landing page that consumers were directed to after clicking on one of their other ads shown on social media. However, they were unable to ascertain which social media ad had directed the complainant to ad (a) and consequently, could not address what the content of that ad was.
JustFab (UK) believed that the text “New VIP Member Exclusive” in ad (a) made sufficiently clear that the offer applied to new VIP members only. They stated that their VIP membership programme was a core element of their business and was promoted across their advertising including throughout the customer journey on their website, starting from the landing page through to the purchase process where consumers were required to expressly consent to the terms of the membership programme.
JustFab stated that they were not just a subscription-only retailer and that new customers were always presented with the option to purchase items at “Regular” (non-VIP member) prices without any on-going or recurring membership.
JustFab stated that new consumers would not become “VIP” members upon registering on the website. At the end of the “short style quiz”, consumers were required to register as “Guests” by agreeing to the website’s terms and conditions, which incorporated those that were applicable to the “VIP” membership programme. New “Guests” would only become “VIP” members if they purchased their first product at the discounted “VIP” member price.
JustFab stated that new “VIP” members would not immediately be charged the monthly subscription fee upon their first purchase. However, they would be charged the following month unless they either purchased another item (offered at the “VIP” discount price), or signed into their account and clicked on the “skip the month” button on the “boutique” page.
JustFab stated that over 80% of their UK revenues were repeat revenues generated by active VIP members. They believed that this demonstrated that their revenues were not driven by new members joining their membership but by existing VIPs. Furthermore, on average 65% of their VIP members “skip[ped] the month”, avoiding any monthly charges and over 30% purchased products directly or via redemptions of membership credits and less than 2% cancelled. They believed this showed that only a minority of consumers seemed either to not understand or disliked their membership programme, whereas the majority understood how it worked and were satisfied with the service.
JustFab stated that in September 2015 they were contacted by Westminster Trading Standards (WTS) regarding how the information about the VIP membership programme was explained on their Fabletics website. They were told by WTS that whilst they were satisfied that sufficient information was provided to consumers about how the VIP membership worked, some further clarity could be provided.
JusFab worked with WTS and made some changes to the “Order Summary” and “Shopping Bag” stages of the checkout process to, among other things, emphasise the requirement for consumers to either make a purchase each month or skip the month to avoid being charged £44 for a membership credit. Furthermore, they increased the prominence of the membership credit charge and the “Guest” options at checkout.
JustFab stated that WTS were content with the amendments and subsequently, equivalent changes were made to the JustFab website.
Assessment
Upheld
The ASA noted that JustFab (UK) were unable to identify the ad which had directed the complainant to ad (a). Nevertheless, we considered that we needed to assess whether ad (a) and what proceeded thereafter had made sufficiently clear that consumers joining as “VIP” members would be enrolling on a subscription contract.
Ad (a) featured the claim “New VIP Member Exclusive First Style from £9” and similar claims as well as “HOW IT WORKS Take Our Short Style Quiz And Get 75% Off Your First Item!” The small print at the bottom of the page explained what consumers needed to do to take advantage of the offer. We understood that by clicking on the “Get started” buttons in ad (a) consumers would be directed to the JustFab website.
We considered that consumers would interpret the claims in ad (a) to mean that if they completed the short quiz on the JustFab website and purchased their first pair of shoes as a “VIP” member by selecting that option at the checkout, they would receive a 75% discount and would not be subject to any obligations thereafter.
However, we understood that although consumers would initially have registered as a “Guest” on the JustFab website, they had to commit to a paid-for subscription contract if they decided to purchase their first pair of shoes at the “VIP” discounted rate quoted in ad (a), which would change their membership status from “Guest” to “VIP”. We understood that unless they purchased another pair or signed into their account and clicked on the “skip the month” button on the “boutique” page by the 5th of each month, they would be charged a monthly subscription fee of £35 which gave them a “member credit” to spend on any items worth that amount. We considered that this was material information likely to influence a consumer’s transactional decision to pursue their interest in taking advantage of the 75% discount and needed to be prominently presented in the ad as a significant condition to the offer, before they were directed to the registration process. Given that the various headline claims regarding the VIP discount clearly stood out at the top and bottom of the ad, and on the understanding that the “Get Started” buttons located directly underneath them directed consumers to the JustFab website home page (ad (b)), we considered that the significant condition should have been clearly presented immediately underneath the VIP member discount/from price claims. However, we noted that no such information was featured in ad (a).
JustFab (UK) stated that consumers had to consent to the terms and conditions of the “VIP” membership throughout their journey from the landing page to the purchase process. We understood that by clicking on “Get Started” in ad (a), consumers were directed to the home page of the JustFab website (ad (b)) where they were offered the opportunity to join as “VIP” members and receive their 75% discount.
We noted that JustFab had made similar changes on the JustFab website to those that were made on their Fabletics website following advice they received from WTS on how they could further clarify how their VIP membership worked.
We engaged with WTS and understood that they agreed that ad (a) had omitted material information. However, they considered that the registration process on the website did make sufficiently clear to consumers that they would be entering a subscription contract if they purchased shoes at the VIP price, and what action they needed to take to avoid the monthly fee.
We considered the JustFab home page (ad (b)), which featured text on the upper and lower half of the page promoting the VIP membership service. It explained what consumers had to do to join the website and that becoming a “VIP” member would save them money. However, those pieces of text did not disclose or refer consumers to information that by becoming a “VIP” member they would be enrolling on a subscription contract where they would be charged a monthly fee of £35 unless they took specific action to avoid that cost. Furthermore, when clicking on the text consumers were immediately directed to the “short style quiz” and once completed they had to register as a “Guest” member, after which they could then purchase their first pair of shoes at the “VIP” discounted price, which would activate their “VIP” membership.
The bottom of ad (b) featured a pink box with text that explained how the “VIP” membership worked, including information regarding the monthly subscription fee and what action was required by consumers to avoid that cost. This information was further reiterated in the small print located below the pink box. We considered that if consumers read the text in the box and accompanying small print, they would understand that becoming a “VIP” member required them to enrol on a subscription contract and to avoid being charged the monthly fee they had to either make another purchase or log into their account and click the “skip the month” button on their “boutique” page by the 5th of each month.
However, that qualification was located at the bottom of ad (b). We noted that after reading the various texts promoting the “VIP” offer on the top and lower half of ad (b), consumers needed to scroll-down and bypass various other images and text to reach the qualification. We considered that the qualification was material information that needed to be prominently presented. Given the large amount of content in ad (b) and the call to action buttons that appeared with the texts promoting the “VIP” offer, this information should have been immediately stated before consumers clicked on any of the buttons which directed them to the registration process. Therefore, we considered that the condition for consumers to enrol on a “VIP” subscription contract in order to take advantage of the 75% discount and the action they needed to take to avoid being charged the monthly fee was not presented prominently in ad (b).
Upon clicking on the pieces of text promoting the “VIP” membership in ad (b), consumers were directed to the “short style quiz” before they could select a pair of shoes and at the end reached the registration page where a pop-up box appeared promoting the 75% discount for new “VIP” members. However, no information was presented during the quiz or in the pop-up box regarding how consumers had to enrol on a subscription contract in order to take advantage of the “VIP” discounted price, where a monthly fee applied if they did not take the necessary course of action to avoid that cost. Such material information should have been prominently presented throughout the quiz and registration process.
Before submitting their details to register on the website, consumers had to tick a box which featured the text “I have read the Terms & Conditions and consent to the Privacy Policy”. Clicking on the “Terms and Conditions” a pop-up box appeared and at the top provided a “brief summary” of the terms and conditions which explained that consumers could purchase products at either the “Guest” price (regular price) or enter into a “VIP” membership and benefit from “members-only pricing”. It further explained how consumers could become “VIP” members and that they would be charged a monthly fee unless they “skip[ped] the month by the 5th of the month”. We considered that if read, consumers would understand from this that they would be enrolling on a subscription contract and would be charged a fee unless they carried out specific action.
However, we considered that it did not make sufficiently clear to consumers the specific action they needed to take to avoid the monthly subscription fee, i.e. log into their account and click on the “skip the month” button on the “boutique page”. Furthermore, we considered that this was material information which should have been prominently presented on the registration page itself, specifically before consumers clicked on the box agreeing to the terms and conditions, so that they were fully aware prior to creating an account the obligations they would be agreeing to if they enrolled as a “VIP” member upon purchasing their first pair of discounted shoes.
Therefore, because we considered ads (a) and (b) did not make sufficiently clear and prominently present the condition that consumers joining the website as a “VIP” member would need to enrol on a subscription contract and the action they needed to take to avoid the monthly fee of £35, we concluded were likely to mislead consumers.
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) and
3.9
3.9
Marketing communications must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify.
and
3.10
3.10
Qualifications must be presented clearly.
CAP has published a Help Note on Claims that Require Qualification.
(Qualification).
Action
The ad must not appear again in its current form. We told JustFab (UK) Ltd to ensure that their advertising made sufficiently clear and prominently presented the condition that consumers joining the website as a “VIP” member would be enrolling on a subscription contract and the specific action they needed to take to avoid the monthly fee of £35.
