Advertising compliance managers must be a threatened species at cut-price internet service provider, Dodo. The latest incarnation of Dodo’s “Free” ADSL2+ web advertisements contains some big advertising law bloopers.
But unlike TV bloopers, there isn’t a lot to laugh about given the penalties that can apply, especially if the ACCC has already put you on a short leash.
A bit of legal background
In Australia, it’s unlawful for companies to engage in misleading and deceptive conduct. Advertising that uses words such as “FREE” is scrutinised very carefully by the ACCC and the courts, who recognise the power of that word in the minds of consumers. If you’re going to advertise something as “free”, it had better be truly free. Otherwise, it’s misleading.
The recent introduction of component pricing (or ‘single pricing’) laws now requires businesses who quote prices in their ads to quote the whole price. This is the reason why airlines now prominently quote fares inclusive of all taxes and charges.
The component pricing laws allow businesses who charge monthly fees for services (such as ISPs) to quote the monthly fee in an ad provided the total fees over the term is “prominently” stated. Peter Moon over at CSP Central gives a better explanation of component pricing law and in some detail.
What’s wrong with the Dodo ad?
For starters, Dodo’s ADSL2+ isn’t free.
If you look at the Dodo ad, you’ll no doubt see the “STOP PAYING FOR ADSL” stop sign, “FREE ADSL2+ BROADBAND”, “FREE ADSL2+” and “FREE SETUP”. They are the most prominent featueres of the ad. But take a closer look and you’ll find that you can only get the deal if you get a Dodo home phone.
Of course, switching your home phone to Dodo isn’t free. It will set you back, at minimum, $596.70 a year. Dodo have to tell you this total price because of the component pricing laws.
But how do they do it? Well, like this:
The total price is in fine print, jammed between the big “FREE” header and some large, bold text telling people to send in an enquiry. Remember how I said the total price had to be prominently stated ..?
So we’ve worked out that free broadband from Dodo costs at least $596.70 per year. But it gets worse. You may have noticed that little hash next to the word “data charges” above. If you scroll past the enquiry form and some whitespace (which on many monitors takes you “below the fold”) you find out what that little hash means.
That’s right, you do get “FREE” ADSL2+ but only a paltry 150MB’s worth. After that you have to pay. At full ADSL2+ speed, 150MB will get you 50 seconds worth of download.
Don’t use the internet and it’ll be free.
Fail on two fronts
Dodo’s advertisement doesn’t just fail from a legal compliance perspective.
By trying to suck customers into signing up to an annual contract with a high likelihood of excess charges, all on the premise of providing free high-speed internet, Dodo risks creating a group of disgruntled customers and serious brand damage.
Tags: advertising law, component pricing, dodo, free offers, marketing fail
