In a direct mail advert for Dell computers a £199 laptop
computer was offered for sale, but one recipient said that that
advert was misleading because of extra charges a buyer would have
to pay.
Buyers were told they could either pay the delivery charge or a
£57.58 collection charge, though Dell later said that the inclusion
of a collection charge was an error and that it no longer charged
for collection.
The ASA said that, error or not, the advert appeared to impose
charges amounting to a significant proportion of the cost of the
computer on buyers, and that buyers appeared to have no choice but
to pay the charges.
"Although we acknowledged that details of the charge had been
included in the mailing in error, we considered the mailing had
nonetheless contained misleading information by implying that there
was no option but to pay for either delivery or collection," said
the ASA ruling. "We reminded Dell that non-optional charges imposed
on all buyers should be included in the headline price."
Dell argued that it charged the same price for delivery for any
system, ranging from the low-cost laptops advertised to systems
costing thousands of pounds. The ASA rejected that argument.
"We considered that the cost of delivery should have been made
more prominent in either the main body of the mailing or by a
clear, direct link to the small-print. We concluded that the
presentation of the mailing gave a misleading impression of the
total cost customers would have to pay for the computer," it
said.
The ASA raised its own objection to the advert, which was that
it should have included the amount of VAT to be paid in the
advert.
Dell said that the ad was targeted exclusively at business
customers, that it sent the advert only to small business customers
from its own customer lists and externally sourced lists. It said
that business adverts did not usually include VAT.
The ASA accepted that it was an ad designed for businesses but
said that VAT could only be excluded if all other applicable
charges were prominently displayed.
"We reminded Dell that the CAP Code allowed marketing
communications likely to be read mainly by businesses able to
recover VAT to quote prices excluding VAT or other taxes and duties
provided that prominence was given to the amount or rate of any
additional costs," it said. "We considered that, because the
mailing did not include prominent information about the VAT rate
payable or the price inclusive of VAT, the mailing breached the
Code."
A new law protecting consumers from unfair business practices
came into force this week. The Unfair Trading Regulations order
companies to avoid unfair practices. Clare Francis of Pinsent
Masons, the law firm behind OUT-LAW.COM, said that if the ad had
been directed at consumers it might have fallen foul of the new
law.
"This is unlikely to have breached the Regulations as it was a
business to business communication. The Regulations only apply in
relation to consumers," she said. "If it had reached a consumer
then it could potentially breach the Regulations on the grounds
that it was a misleading action or a misleading omission."
"For the first of these it could be argued that the overall
presentation of the mailing could deceive an average consumer, even
if the information provided is factually correct, and cause that
consumer to take a transactional decision that he or she would not
otherwise have taken," said Francis. "For the second, the mailing
would be misleading if it has hidden material information or
provided it in a manner which is unclear or ambiguous and as a
result caused the consumer to take a transactional decision that he
or she would not otherwise have taken."
