MTN South Africa faces backlash over misleading 'free' router advertising

MTN South Africa has been ordered to either remove or amend its “free-to-use” router advertising, after it has emerged that it is not actually free, the Advertising Regulatory Board (ARB) ruled.

This followed a complaint by a consumer regarding MTN’s Shesh@ 600 product that claims to offer a “free-to-use” router. He was charged an “activation fee” of R553 before MTN would activate the router for use.

The cellphone giant, however, referred to its terms and conditions, where it stated that “MTN reserves the right to charge a SIM activation fee”. The code of advertising practice expressly requires advertisers to refrain from calling a product or service “free” when there is, in fact, a cost to the consumer, the ARB said. It added that the code also expects advertisers to pertinently draw attention to any mandatory costs that might apply over and above that of the actual product.

The advertising creates an overwhelming expectation that the advertiser provides this router at no cost to the consumer. The word “free” appears prominently across the examples submitted by the complainant, as well as on MTN’s website whenever reference is made to the router, the ARB said. The directorate added that it does not believe that the average customer would instinctively expect an upfront “activation” fee to apply in order to be permitted to use this “free” router.

“It is not immediately clear what the basis is for charging this fee, which means the directorate cannot necessarily assume that it is an attempt to recover the cost of this ‘free’ product. However, what is clear is that this is a non-negotiable, mandatory cost that is neither disclosed in the advertising nor pertinently referenced in a way that draws the customer’s attention to it,” the watchdog body said.

It explained that the fact that MTN disclaims its “reserved right” to charge a non-specific activation fee in its Terms and Conditions is not sufficient. No indication is provided in the advertising that there are any terms or conditions attached to this “free-to-use” router.

In addition, the ARB said, there is a significant difference between reserving one’s right to charge a fee and actually charging a fee without disclosing it in the advertising of the relevant offer, which the advertiser in this case is doing. At best, this information would be discovered after the initially misleading impression had already prompted the customer to subscribe.

The ARB added that it is also unclear whether every consumer who signs up for this offer is charged this fee, or if there was something in the complainant’s circumstances that triggered this fee.

It should also be noted that the same set of Terms and Conditions contains a large table titled “3 Pricing” which sets out pricing information about MTN’s different “Home Internet Price Plans” (which includes the advertised offer). This table also gives no indication that an activation fee might apply. It also lists the “device” (router) as “free to use”, the ARB said.

It added that while MTN’s undertaking to conduct refresher training with its call-centre staff and in-store staff to ensure proper disclosure of additional costs is commended, this does nothing to remedy the likely deception created by the advertising. The fact remains that the advertising at issue created an inaccurate expectation which omits material information about additional costs, the ARB said.