MTN's router claims deemed misleading by Advertising Appeals Committee

The Advertising Appeals Committee has dismissed an appeal by MTN South Africa, confirming that its Shesh@600 product, which claims to offer a “free-to-use” router, was not always “free”, thus this statement was misleading.

MTN was ordered last year to either remove or amend its “free-to-use” router advertising.

This followed a complaint by a consumer that he was charged an “activation fee” of R553 before MTN could activate the router for use.

MTN subsequently appealed against the Advertising Regulatory Board (ARB) Directorate’s ruling, which upheld the consumer’s complaint by finding that the “free-to-use” router claim in MTN’s Shesh@600 home internet advertising was misleading.

The advertising in issue is a campaign promoting MTN’s Shesh@600 5G/LTE Home Internet package, offering uncapped data with tiered speeds for a monthly subscription of R399. The offer appeared in a MyBroadband advertorial.

MTN accepted that an upfront payment is required, but explained that this related to pro-rata subscription and a possible SIM activation fee, rather than a charge for the router itself.

It referred to its applicable terms and conditions, which state that “MTN reserves the right to charge a SIM activation fee”.

MTN stated that customers were not required to make any further payment to obtain the “free” router and that any sales representative who had suggested otherwise was mistaken.

The ARB, however, earlier found that the advertising omitted material information about an additional, mandatory cost, and that the “free-to-use” claim, as presented, contravened its advertising code.

MTN on appeal said that the Directorate conflated the complainant’s misunderstanding about an upfront payment with an actual charge for the “free-to-use” router.

It submits that, properly understood, no fee of R553 was charged in relation to the router or its activation and that the Directorate’s finding of a “mandatory additional cost” is, therefore, incorrect.

However, in its written submissions, MTN indicated that the “SIM activation fee” is a discretionary charge provided for in its terms and conditions, and which is typically charged when a consumer opts to sign up for packages in-store.

MTN pointed out that both the general terms and conditions and the MyMTN Home Internet terms reserve the right to charge a SIM activation fee.

It also submitted that the SIM activation fee does not form part of the price of the router. In its view, the fee is not “in relation to the product or offer specifically” but is rather an administration charge of the dealer for handling the activation, which may or may not be levied at the dealer’s discretion.

Chairperson of the Advertising Appeal Committee, Advocate Nasreen Rajab-Budlender, in her findings earlier this month, said they accept MTN’s evidence that the consumer in this case was not charged a SIM activation fee and that the “free-to-use” router appeared on his invoices with a zero charge.

She conceded that the Directorate’s earlier assumption that the complainant was charged an upfront activation fee in respect of the router is incorrect.

However, the difficulty does not lie in an actual fee charged to this particular complainant, but in the structure of the offer and the way in which the “free-to-use” claim operates across the campaign, Rajab-Budlender said.

She explained that the existence of a SIM activation fee that may be charged to some consumers taking up the Shesh@600 offer, without a clear and prominent qualification in the advertising, means that the router cannot be described as “free-to-use”.

In turning down the appeal, she concluded that the advertising is likely to mislead consumers.

zelda.venter@inl.co.za