Note: This advice is given by the CAP Executive about non-broadcast advertising. It does not constitute legal advice. It does not bind CAP, CAP advisory panels or the Advertising Standards Authority.
Rule 3.18 of the CAP Code states that prices quoted in marketing communications addressed to the public should include all non-optional taxes and duties imposed on all buyers. It states that it might be permissible to exclude VAT from prices quoted in marcoms for products targeted at businesses. Generally, however, the ASA and CAP would expect charges such as VAT, airport taxes, delivery costs and other compulsory charges either to be included in the quoted price or stated prominently. The same principle applies to hire purchase schemes for products such as cars.
The ASA Compliance team took action on a car hire company that claimed readers could “Hire a car in the UK from as little [as] £1 plus Location Service Charge … [of] £25.85”. Because the Location Service Charge was known, fixed and non-optional, the ASA asked the marketers to include those costs in the headline price (Hertz (UK) Ltd, 6 July 2005). Similarly, the ASA upheld a complaint that a compulsory £56 documents fee was not included in prices quoted for the cars featured in an ad. Again, because it was compulsory, the ASA asked the advertisers to include the fee in the price of vehicles (The Car Shop, 1 September 2004). And, earlier the same year, the ASA asked a gym to include a compulsory administration fee in a headline joining fee (Fitness First plc, 12 May 2004).
The ASA does not, however, ask for all compulsory charges to be included in prices. Sometimes it is wrong to include a mandatory charge in a headline price. An example might be if a marketer offers tickets for sale but charges a booking fee irrespective of how many tickets are bought. Clearly, the inclusion of the booking fee in the price quoted for the ticket could be misleading. By way of example, in 2004, the ASA investigated a complaint about the quoted price of a web hosting package. Although the advertiser levied a compulsory one-off set-up fee, the ASA asked the advertiser to draw readers’ attention to its existence but did not ask for it to be included in the monthly headline price (1&1Internet Ltd, 20 October 2004).
When quoting prices, credit agreements or the like, marketers should ensure that they seek advice from Trading Standards, the Financial Services Authority or other legal body or advertiser.
See the other sections of ‘Compulsory Costs and Charges’ and entries on ‘Ticket Pricing’, ‘Travel Marketing: Compulsory Travel Insurance’ and ‘Travel Marketing: Pricing and “Free Flights”.
Last modified : 29 June 2010