ASA rules on pricing claims...while EU is on the case

Recently, the ASA ruled on two advertisements where pricing claims were the issue. Pricing claims are covered both by the CAP and BCAP Codes as well as consumer protection legislation and it is easy to fall foul of the rules.

The first complaint related to Travel Jigsaw. An ad for a hire car stated "Citroen C3 or Similar...Price for 5 days: ￡102.30 [struckthrough] ￡93.86". Further text stated "+84.13€ (about ￡73.28) car hire company fee".

The complainant, who believed that non-optional fees such as the car company hire had not been made sufficiently clear, challenged whether the rental price claim was misleading.

The advertiser said that when you hovered over the price information with your mouse, a statement that other fees applied was shown.

The ASA agreed with the complainant. It referred to the CAP rules on price advertising, which require that quoted prices must include non-optional taxes and fees that apply to all or most buyers. The only exception was when those fees and taxes could not be calculated in advance. The ASA therefore ruled that because the total price, including all non-optional fees, was not clear as soon as prices were quoted, the ad was misleading.

The second adjudication was about TV and website ads for Love Windows. Both ads referred to windows being available for ￡299 each. Two complainants, whose quotes from Love Windows were higher than ￡299 per window, challenged whether the claims in the ads of “one fixed price of just ￡299 each” and “Buy Any Size Fully Fitted Window” were misleading and could be substantiated.

Love Windows said one of the complainants received a quote that was over ￡299 per window for two windows because building work was required to add lintel supports. They said the ￡299 price was for window replacements only, and if a customer required building work such as scaffolding and lintels they always advised them to arrange that separately, or provided a quote with fees for the building work in addition to the replacement of the windows. They said each job was different and that particular job had its own unique situation. Clearcast also gave their view on the ads and said they thought the claim of ￡299 was fair.

The ASA disagreed. It said that because consumers were likely to understand from the ads that they would be able to pay the price of ￡299 per window including installation, it considered that additional charges that consumers could incur in addition to the fixed price advertised was material information that was likely to affect a consumer’s transactional decision and therefore should have been included in ads.

Both advertisements make clear the importance of ensuring that headline prices don’t hide the full story, and that any extra fees likely to be charged are disclosed clearly to consumers.

In a case of interesting timing, the European Commission has issued a press release stating that five car hire companies have committed to changing their pricing practices. If the companies don't fulfil their commitments, consumer authorities could decide to resort to enforcement measures.

The companies have committed to:

• Include all charges in the total booking price: consumers will now be offered a headline price on the website that matches the final price they will have to pay. This fee must include all additional costs such as specific fuel service charges, airport fees, ‘young driver surcharges', or the ‘one way fee' if the return location differs from the pick-up location;
• Clearly describe the key rental services in the terms and conditions in all national languages: consumers will not have to deal with unclear or misleading information about the main characteristics of the rental such as mileage included, fuel policy, cancellation policy and deposit requirements, etc.
• Make clear, in the price offer, the price and details of optional extras, in particular for insurance waivers that reduce the amount due in case of damage. What is covered in the basic rental price regarding damages and notably what the driver may still have to pay should be clearly indicated. If additional insurance or damage waiver is purchased, what is or is not included should also be clearly indicated before the consumer signs up.

In the U,K , the Chartered Trading Standards Institute publish a Pricing Practices Guide. It does not have statutory force, but if you comply with it, you are likely to be complying with the law, so it provides useful guidance.