Household (Utilities)

The radio advertising which featured a male voiceover referred to the following:

“Prepaypower.ie now has the cheapest unit rate for electricity in Ireland. That means you pay even less for your electricity because prepaypower.ie has the cheapest unit rate for electricity in Ireland. So when it comes to electricity unit rates, no other company is lower and all other companies are higher. So switch to prepaypower.ie now. For the cheapest unit rate for electricity in Ireland. Freephone 1800 844 669. Unit rate comparison was made on the 1st February 2015. For full terms and conditions see prepaypower.ie/switch”

The jingle at the end of the advertisement contained the following wording.

“Prepaypower.ie smart control of your electricity.”

The complainant said that he considered the advertising to be misleading. He said that the advertisement had stated that PrePay Power had the lowest electricity unit rate in the market. He said that while they may have the lowest standard unit rate, nearly every other provider had a cheaper unit rate. He said that while he initially thought that the advertisers had cheaper rates than that of his current electricity supplier, this turned out not to be the case.

The advertisers said that they were committed to continually meeting the highest standards in dealing with both their current customers and potential customers and took these responsibilities very seriously. They said that they always tried to ensure that their advertising was fully beyond reproach and therefore at the outset wished to confirm that the radio advertisement in question had been taken off air and would not be used in its current format again to ensure that there was no chance of any misunderstanding by their customers.

In providing background to their advertisement the advertisers said that they had recently changed their offer to their customers and had decided to make their unit rate (the rate that they offer their customers for all of their contract – not just temporarily on sign up), the cheapest unit rate in the market. The consequent price reduction meant that they would be passing on bigger savings to their customers than any other Irish electricity supplier, in fact they said, they offered more than double the reduction offered by their competitors. They pointed out that both current and new customers were offered the same low unit rate. At this point the advertisers provided a table which displayed the standard unit rates for all suppliers’ 24 hour plans, these rates they said were applicable to the majority of homes in Ireland and their rates were similarly lower on all day/night plans.

The advertisers said that with their new campaign they wished to distance themselves from switcher rates offered by other suppliers.

These rates were usually based on discounts off high standard rates, so they had intentionally not used the term ‘standard’ in their advertising. Six out of seven customers had not, they said, switched supplier in the last 12 months. After the initial 12 months of contract the vast majority of these customers reverted to standard rates from their supplier. Therefore, other suppliers’ standard rates were the most generally applicable rates, as they were the ones that the majority of customers paid. As they had offered one rate to both their new and existing customers this distinction had not arisen for them.

The advertisers said that the radio advertisement complained of had been their first major radio campaign, and they considered this format limited them in terms of the amount of information that they could provide to their customers. They had therefore created a dedicated page on their website where common questions could be answered and further clarity provided. All customers were also made aware by their sales teams of the pricing structure in place when they signed up.

Finally the advertisers, in addressing the complainant’s concern that other suppliers in the market had cheaper rates, said that where this was the case that most were discounted rates which had been temporarily discounted and had significant terms applicable to them. They said that in using other suppliers’ standard rates for comparative purposes they had selected the most comparable rates i.e. their competitors’ standard rates. They said, however, that when they became aware that their advertising was causing potential confusion they adjusted their claim across all marketing communications, to make it absolutely clear that they were comparing their unit rates to other suppliers ‘standard rates’ even though their initial wish had been not to use the word ‘standard’.

The advertisers reiterated once again that the radio advertising in question was no longer being aired and should it air again the reference to ‘standard’ would be included in all media.

Complaint Upheld.

The Complaints Committee considered the detail of the complaint and the advertisers’ response. They reminded the advertisers that when using rates/figures for comparative purposes they should compare like with like.

The Committee noted the advertisers’ comments in relation to standard and discount rates. They considered that in the absence of a reference to ‘standard’, consumers could understand the claim to be against all rates offered by the advertisers’ competitors. As this was not the case, the Committee considered the claim was likely to mislead and was therefore in breach of Sections 2.22, 2.24 and 2.51 of the Code.

Action Required: As the advertisers had already withdrawn their advertising in March and were amending any future marketing communications, no further action was required in this case.