British Gas slammed for "misleading" ads
British Gas slammed for "misleading" ads
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Wednesday, 12, Apr 2006 04:42
An advertising campaign for British Gas has been ordered to be withdrawn after it was found to be "misleading".
The Advertising Standards Agency (ASA) ruled that the energy giant had falsely claimed in a recent nationwide TV advertising campaign that its recent price rises had been "balanced out" by similar price rises from its competitors.
The ruling follows a number of complaints received by the watchdog from consumers, as well as a competitor, Scottish Power, accusing British Gas and its sister supplier Scottish Gas of false advertising.
Explaining today's ruling, the ASA said that it had conducted a comparison of British Gas prices against its competitors and found them in many cases to be higher than those offered by rival suppliers.
"[Energy watchdog] Energywatch's figures showed that dual fuel customers very often paid more for their energy by taking it from Scottish or British Gas than they did with any available competitor," the ASA ruled.
"We therefore considered that the ads misleadingly implied that there was no material difference in price between energy suppliers and that customers were unlikely to save money by shopping around to compare prices."
The ASA warned British Gas that the advert "must not be shown again in that form".
The campaign featured a British Gas customer, an animated flame called Archie, expressing his relief that he had not switched energy provider following British Gas' announcement of price rises last year.
"Last year I heard that prices were going up. In fact I read it in the local press. And I thought well, if we change, the other provider might change and put theirs up as well," Archie said.
"So we just sat tight. The other provider did put their prices up and I believe it's all balanced out. So you know, we stayed put and we were happy about that."
Energywatch figures showed that between September 2004 and September 2005, dual fuel prices for British Gas customers rose by 15 per cent. Although some competitors' raised bills by up to 21 per cent, many enacted less significant price increases, with a number leaving their prices unchanged throughout the period.
The ruling will come as a major embarrassment for British Gas, which last month raised domestic bills by 22 per cent as a result of soaring wholesale costs, despite owners Centrica posting record £1.5 billion profits last year.
Energy firms have come in for criticism across the board, with the UK's major suppliers all announcing double-digit price increases in recent months.
Old-age charity Help the Aged warned that more than 400,000 elderly people could be put at risk by the price rises.
However, energy firms claim the increases are wholly justified, with a recent Datamonitor report estimating that suppliers suffered combined losses of £571 million last year, as bills failed to move up in line with record wholesale prices.