ASA decision on misleading website prices

The Advertising Standards Agency (ASA) has published another decision on misleading pricing information contained on an organisation’s website.

Background
In this case, an internet service provider, Heart Internet, omitted a £10 set-up fee from its price comparison table, and displayed prices that excluded VAT. A small white on grey footer at the bottom of the page stated that the prices were VAT exclusive.

Following the complaint, Heart agreed to update the product table so that customers were aware of the charge before commencing the ordering process. However, Heart argued that its footer complied with the ASA’s requirements.

The ASA’s decision
The ASA held that this breached the ASA’s CAP Code. Rule 3.18 of the Code states that:

…VAT-exclusive prices may be given only if all consumers to whom the price claim is addressed pay no VAT or can recover VAT; marketing communications that quote VAT-exclusive prices must prominently state the amount or rate of VAT payable

As a number of the packages were likely to be seen as packages for consumers (in particular those called Starter Pro and Home Pro), the ASA held that the prices should have been displayed as VAT inclusive prices.

Whilst the ASA agreed that the Business Pro package was aimed at businesses and a VAT exclusive price could be displayed, the ASA noted that the Code requires that the rate of VAT needs to be prominently stated. The ASA held that the footer at the bottom of the page was not sufficient, and therefore that the price claim in relation to the Business Pro package also breached the Code.

The ASA’s decision follows on previous decision about unclear pricing on websites, and serves as a timely reminder that businesses need to ensure that the pricing they display is clear and complies with the requirements of the Code.

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