A British Gas direct mailing campaign which offered customers “free gas for a year” if they installed a new boiler has been banned by the Advertising Standards Agency (ASA).
Promotional material said British Gas would pay for gas used up to a total of £800 although a footnote highlighted this would be calculated according to direct debit gas prices at August 2007 including VAT at 5 per cent.
A customer complained after only 73 per cent his gas costs were covered by the deal and claimed the mailing “was misleading for failing to make sufficiently clear that the saving would be based not on his actual gas expenditure, but on the cost to a direct debit customer calculated at August 2007 prices”.
The ASA upheld the complaint and said the mailing must not be used again. The ruling said: 'The headline stated ‘Free gas for a year. Free gas for a year’ and text in the body copy stated ‘... we'll pay you for the amount of gas you've used ...’.
'We considered that readers were likely to understand that British Gas would refund what they paid for their annual gas bill, up to £800, taking into account increases and decreases in gas prices over the year.
“We noted the text, which told consumers how to get their free gas, was linked to a footnote that explained how the saving was calculated: customers were refunded for the amount of gas they used according to monthly direct debit gas prices as at August 2007.
'We considered that the qualification in the footnote was likely to alter significantly the reader's understanding of the headline claim and should therefore have been prominently stated within the body copy of the mailing.
“We noted gas prices increased twice in 2008 - by 15 per cent in January and 35 per cent in July. We understood that, if gas prices increased over the year, customers were unlikely to obtain ‘Free gas for a year’ because there would be a shortfall between what the customer paid for their annual gas bill and what British Gas refunded to them. We therefore concluded that the claim ‘Free gas for a year’ was likely to mislead.”
British Gas said it believed the mailing made clear how the customer's gas payment would be calculated. They pointed out that text under the heading 'How to get your free gas' stated 'After you've provided your second reading we'll pay you for the amount of gas you've used, up to £800'.
The text was linked to a footnote that stated how the free gas would be calculated and paid. This footnore said: 'This will be calculated on our domestic monthly direct debit gas price as at August 2007 including VAT at 5 per cent. The first 4572 kWh of consumption will be credited at 4.479p per kWh, with the remainder being credited at 2.282p per kWh. The direct debit discount of 10.3% (up to a maximum of £60.33 inc. VAT) will be deducted from the overall value.'
British Gas explained that those figures were their national Standard Tariff prices at the date the promotion went live.
They thought the customer might have calculated the refund based on the prices he actually
paid throughout the year rather than the prices listed in footnote of the mailing.
They nevertheless believed the mailing made clear that the gas payment would be made according to the 'amount of gas used' not the actual price paid.