Xcite Mobile hit by double ruling from the ASASA

Date: 18 May 2006
(ICT World)
Xcite Mobile has been hit by a double ruling by the Advertising Standards Authority of SA (ASASA) for misleading subscription advertising.

Two independent complaints were filed with the ASASA, by Exactmobile and a complainant by the name of John Skliros.
 
While the SMS Love commercial offers viewers "tips and all kinds of stuff to steam up your romance", and invites them to "sms LOVE to 31314" at a cost of R1 in order to receive these tips, both complaints pointed to the fact that the commercial does not clearly state that by SMSing the premium number, users are in fact subscribed to a R5 weekly subscription service.
 
In response to both the complaints, Xcite Mobile said all its advertising complies with and in instances exceeds the strict Wireless Application Service Provider Association's (WASPA) Code of Conduct. Furthermore, it pointed out that the voiceover states "join the club now" repeatedly, indicating that this is a subscription service.
 
Xcite Mobile also informed the ASASA that any person making use of its service is immediately sent an SMS explaining the terms and conditions of the service as well as instructions on how to cancel the subscription. Members are also sent a 'comfort SMS at least once a month reminding them of the costs involved, as well as information on how to discontinue the service.
 
Davin Mole, CEO of Exactmobile says that, as the ASASA points out in both its rulings, the words 'ONLY R1 each! are boldly shown, while the notice 'Subscription R5/week ± 50c/request. Vodacom only. appear in the top right hand corner of the screen in a small font and on a dark background, which is not easily noticeable.
 
"While the advertising rules laid out by the Wireless Applications Service Providers' Association (WASPA) do stipulate that WASPs cannot bundle content with a subscription service on a television advert, many WASPs are still ignoring this rule," he says.
 
Although the Xcite commercial does state the price for the subscription service, the service is still bundled with the "SMS Love" service, he explains.
 
"The WASPA code clearly states that the subscribing of a user to the service must be a separate process, which is not the case where the advert states it is a subscription service and sells content," he says. 
 
The reason why the bundling of subscription services has become such a contentious issue is because many WASPs are finding it harder to sell content after the introduction of the code which is designed to protect the consumer, Mole says.
 
"Before last September 2005 when the WASPA code of conduct came into effect, subscription services bundled with content were rife in the market.

"Print publications in particular were full of advertisements by WASPs luring unaware consumers into weekly payments.
 
"When the code came into effect, it put a stop to bundling by making registration for subscription services a separate transaction.

"However, many WASPs have found that revenue streams from advertising are drying up because consumers are now afraid to respond to advertising fearing that they may once more find themselves subscribed to a subscription services," Mole says.
 
Dropping revenues even resulted in a vote being held by WASPA after a number of WASPs again pushed for subscription services to be bundled with content.

Mole says the issue was put to a vote by WASPA and 23 WASPs, or 72%, were in favour of amending the clause to make it more definitive in the governing of subscription services.
 
An additional clause was also added to the code requiring WASPs to send a monthly reminder to users who are subscribed to a subscription service giving details of the WASP, the cost and how to unsubscribe.
 
"The amendments to the code mean the consumer is not only protected from being subscribed against their consent, but if they chose to subscribe to a service, they are given a reminder of which subscription services they are subscribed to and how to unsubscribe if they so wish," Mole adds.