28 July 2005
Johannesburg — THE Advertising Standards Authority has ordered iTouch to withdraw its "misleading" adverts for cellphone ringtone downloads, ruling that they are unfair to consumers.
The adverts showed the cost of downloading an individual ringtone, picture, logo or wallpaper, but did not make it clear that anyone using the service was actually signing up for a weekly update that would automatically cost more money.
The authority upheld a complaint by a rival content provider Exact Mobile that the iTouch adverts were misleading, and in contravention of the Advertising Standards Code.
Exact Mobile complained that consumers were not told that sending one SMS for a download would actually subscribe them to a service dubbed Jippii, which carries a weekly fee. "Opting to receive weekly content as a result of buying one item is confusing and misleading," Exact Mobile said.
Most of the users would be children, who were unlikely to understand what they were getting into, Exact Mobile said.
The authority agreed that consumers could be misled about the total price they would pay.
The iTouch adverts featured boxes showing different items to download, and a small-print box at the bottom showed the terms and conditions. That clarified that it was a subscription, but a reasonable consumer familiar with paying for downloads one by one would not assume it was a subscription service.
"This is a material difference that must be clearly and unambiguously conveyed in all sections of the relevant advertising material," the authority ruled.
In its defence, iTouch submitted new adverts showing that the wording had now been clarified to state clearly at the top that this is a subscription service for Vodacom customers. CEO Greg Brophy said no customers had complained either to iTouch or to Vodacom, and the only complaint had come from its rival, Exact Mobile.
Such services were proving popular around the world because they gave customers some substantial discounts on the content that they wanted to receive, Brophy said.
Exact Mobile CEO Davin Mole said he would follow up the victory by calling for the industry to clean up its act. Mole is sending the ruling to the cellular networks and to the Wireless Application Service Provider Association (Waspa) a body representing content providers.
Adverts for subscription services were often misleading because the details were only spelled out in tiny print at the bottom. "Most users don't read the fine print and think they are purchasing content on a case-by-case basis," he said.
Often they only realised when the bills kept arriving, and it could sometimes be extremely difficult to unsubscribe, he said.
A new code of conduct for Waspa members should help to protect consumers. From Sunday, any user who sends an SMS to a subscription service must receive an SMS in reply pointing out that they are subscribing.
But Mole said that it was too late for users who had already unwittingly joined such a service. He said Waspa should force the content suppliers to unsubscribe all users and ask them if they want to resubscribe.
The iTouch case is similar to complaints in the UK against the popular Crazy Frog ringtone.
Last month Reuters reported that Icstis, the UK regulator, was investigating Crazy Frog, which made history as the first ringtone to top the UK pop charts.
Icstis received more than 100 complaints about misleading sales terms. Consumers thought that they were buying a single tune, but were actually signing up for a weekly £3 ringtone.
Icstis has the power to levy fines of up to £100000 and shut down services that flout its guidelines. In SA, however, the Advertising Standards Authority has no power to punish or fine companies which flout its rules.
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