2degrees wins ad complaint over Telecom

The Advertising Standards Authority (ASA) has upheld a complaint from 2degrees, first reported in NBR, against two Telecom brochures, both distributed en masse at retail outlets like Dick Smith (pictured above).

Each stated, on page 4: “Both Vodafone Supa Prepay and 2 Degrees round up to the next minute which means you may be paying a lot more for calls than you think, [sic] now that doesn’t seem fair”.

Although Telecom’s XT network is the only one to offer per-second pricing, 2degrees maintained that a full comparison would have shown that its prepay plan (charged at a blanket 44 cents a minute) was still cheaper than Telecom’s One Rate prepay plan.

Telecom spokeswoman Julia Bell told NBR that “The ad was not intended as a direct price comparison, its purpose was simply to highlight that with Telecom’s One Second Billing, after the first minute, you only pay for the time you are on the phone. And that other providers don’t offer that on prepaid.”

Likely to mislead or deceive
The ASA ruled that Telecom’s marketing “contained an element of ambiguity, and that, compounded with the omission of any reference to 2degrees in the comparative text box resulted in the claim with regard to pricing being likely to mislead or deceive the consumer with regard to the pricing of 2degrees prepaid pricing structure.”

The ASA found that Telecom’s phrase “now that doesn’t seem fair” introduced “a negative tone about a competing service and discredited and disparaged it”, thus breaching the ASA’s code of ethics.

“Heel dragging”
In a statement, 2degrees chief executive Eric Hertz said, “The one disappointing aspect to this process has been the heel-dragging employed by Telecom regarding the removal of the offending advertising material from their stores.

“I’m firmly of the opinion that they deliberately delayed complying with the ASA’s order to ensure the material remained available during the holiday buying season.”

Telecom's Ms Bell told NBR “We respect the ASA’s decision and we will amend the advertising. The advertisement was a very small part of a large, and successful, catalogue so we will apply a sticker over the ad in question. It is intended that this change will be completed by close of business today [the same day the ASA finding was made public - Tuesday, Dec 14]”.

Tuesday to Tuesday
But 2degrees head of communications Bryony Hilless countered to NBR that “We are more disappointed that it's taken them so long to decide on this course of action considering they've known about what the ASA’s finding would be since last Tuesday.”

Telecom is not having a bar of it.

"The ASA’s final decision wasn’t made public until very late yesterday, so our instructions to all of our stores and dealer partners was that, by close of business yesterday, stickers were to be applied over the advertisement or the brochures removed from stores," said Ms Bell.

"Since the 8th we’ve been working on finding a solution to amend the advertising and provided comments to the ASA which were reflected in the final decision. All of that also involved, printing stickers and distributing them across the country etc, so to have them all done by yesterday was pretty quick - especially at this time of year."

Peace, hugs
For Telecom, Ms Bell said “There was no intention to denigrate or disparage Two Degrees’ calling offers - in fact we wish them luck for the busy Christmas selling season.”

Ms Bell also noted that the ASA only partially upheld 2degrees complaint.

Ms Hilless said 2degrees considered Telecom’s advertisement was a breach of the Fair Trading Act that would have warranted a complaint to the Commerce Commission, but that it has preferred the less complicated, and speedy, ASA route.