The Advertising Standards Authority has given Telecom a smack on the hand, partially upholding a complaint that was laid by its feisty new competitor 2degrees about misleading advertising in its XT brochures.
2degrees laid complaints to the ASA against Telecom in November for suggesting that, due to 2degrees’ call rounding policy, prepaid calls might cost more than calls made on Telecom’s One Rate Prepaid plan. Telecom’s XT network does offer per-second pricing but, overall, 2degrees offers cheaper calling rates.
The two offending brochures, which were widely available in Telecom branches and at other major retail stores, included the phrase: “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, now that doesn’t seem fair”.
The ASA said Telecom's statement contained an element of ambiguity, was in breach of Rule 2 of the Code of Ethics and Guideline (b) of the Code for Comparative Advertising and was likely to mislead or deceive the consumer.
The ASA also decided the “now that doesn’t seem fair” comment introduced a negative tone about a competing service and discredited and disparaged it, also ruling that the advertisement was in breach of the code of ethics.
But it didn't uphold the complaint about the “One Second Billing” part of the advertisement and said it met the requirements of truth and clarity to the consumer.
2degrees chief executive Eric Hertz said in a statement: “We are pleased with the outcome, although it was never in doubt that we would win."
"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.”
According to the NBR, Telecom has known about the ASA's decision since Tuesday 8 December. Telecom spokesperson Julia Bell told the NBR the company has been trying to find a solution to amend the advertising since then and said that printing stickers and distributing them across the country in that time was difficult, especially at this time of year.
"We respect the ASA’s decision and we will amend the advertising," she says. "The advertisement was a very small part of a large and successful catalogue, so we will apply a sticker over the ad in question."
The offending material was due to be covered up by the end of play on Tuesday 14 December, the day the ASA's decision was made public.
She says the ad was not intended as a direct price comparison and its purpose was simply to highlight that other providers don’t offer one second billing on their prepaid plans. But now she hopes the dueling telcos can let bygones be bygones.
"There was no intention to denigrate or disparage 2degrees’ calling offers. In fact, we wish them luck for the busy Christmas selling season."