ASA critical of Dell advert

Dell has been criticised by the advertising watchdog for not making it clear that a notebook PC would incur a £60 delivery charge.

The Advertising Standards Authority (ASA) said the charge in the advert aimed at businesses "added significantly" to the cost of the computer and appeared to give buyers no choice but to pay.

Dell could have been in more serious trouble than a slap on the wrist if the advert had been aimed at consumers.

Clare Francis of law firm Pinsent Masons said if this had been the case the advert could have fallen foul of a new consumer law introduced on 26 May – the Unfair Trading Regulations order companies to avoid unfair practices.

"If [the advert] had reached a consumer then it could potentially breach the regulations on the grounds that it was a misleading action or a misleading omission,” she said.

In a direct mail advert from Dell for a £199 laptop, buyers were told they could either pay the delivery charge or a £57.58 collection charge. However, Dell later said the inclusion of a collection charge was an error and that it no longer charged for collection.

The ASA said that, error or not, the advert appeared to impose charges amounting to a significant proportion of the cost of the computer on buyers, and that buyers appeared to have no choice but to pay them.

"Although we acknowledged that details of the charge had been included in the mailing in error, we considered the mailing had nonetheless contained misleading information by implying that there was no option but to pay for either delivery or collection," said the ASA. "We reminded Dell that non-optional charges impose d on all buyers should be included in the headline price."

Dell argued that it charged the same price for delivery for any system, ranging from the low-cost laptops advertised to systems costing thousands of pounds. The ASA rejected that argument.

"We considered that the cost of delivery should have been made more prominent in either the main body of the mailing or by a clear, direct link to the small print. We concluded that the presentation of the mailing gave a misleading impression of the total cost customers would have to pay for the computer," it said.

The ASA raised its own objection to the advert, which was that it should have included the amount of Vat to be paid.

Dell said that the ad was targeted exclusively at business customers, that it sent the advert only to small business customers from its own customer lists and externally sourced lists. It said that business adverts did not usually include Vat.

The ASA accepted that it was an advert designed for businesses but said that Vat could only be excluded if all other applicable charges were prominently displayed.

"We reminded Dell that the CAP Code allowed marketing communications likely to be read mainly by businesses able to recover Vat to quote prices excluding Vat or other taxes and duties provided that prominence was given to the amount or rate of any additional costs," it said.

"We considered that, because the mailing did not include prominent information about the Vat rate payable or the price inclusive of Vat, the mailing breached the Code."

Dell faced more serious charges in the USA where it was found guilty of false advertising and fraud by a New York court. The company engaged in abusive debt collection practices, misled consumers about the financing terms for which they had qualified and failed to provide consumers with promised rebates, according to court papers.