Complaint:
A magazine insert and e-mail, for LOVEFiLM online DVD rental company, offered "Unlimited" DVD rentals. The complainants, who pointed out that LOVEFiLM operated a fair usage policy, challenged whether the use of the term "Unlimited" was misleading.
Codes Section: 3.1, 7.1 (Ed 11)
Adjudication:
Complaints upheld
LOVEFiLM said they provided DVD and game rental subscription packages, several of which were described as "unlimited". They pointed out that they offered a broad range of packages allowing customers to rent a fixed or open number of discs every month. They said the e-mail related to their popular '2-disc unlimited' package, which allowed customers to receive and return individual discs from a range of titles they wished to rent holding a maximum of two at one time. They said the magazine insert advertised the '3-disc unlimited' package. LOVEFiLM said the title list was stored in the customer's online account profile allowing their customer management system to allocate titles to the customer. They said each disc was allocated and dispatched by first class post and could be kept for as long as the customer wanted. When the customer returned a disc the customer management system would allocate another disc from the customer's list. LOVEFiLM pointed out that theoretically, a customer could receive around 26 discs during a 30-day period, but maintained that customers typically returned discs around once a week. They acknowledged the restrictions of time and delivery speed but believed customers would understand the context in which the term "unlimited" was used and said the typical user could rent as many discs as they wanted to satisfy their neeRAB.
LOVEFiLM confirmed that they operated a fair usage policy to manage their growing number of members but maintained that the policy was discretionary and used sparingly. They said the fair usage policy was designed to ensure that a fair and balanced service was provided to all subscribers on a particular package. The policy worked by prioritizing the orders and higher list choices of those members who had used the service longest and, on average, rented fewer discs per month, than other members. They sent details of the average usage of each of their packages and the threshold at which the fair usage policy applied, which, they said, showed the threshold to be significantly higher than the average usage levels for each of their packages. LOVEFiLM maintained that customers were made aware of and agreed to the fair usage policy when they joined the service and that their website featured full details of its terms. LOVEFiLM said the fair usage policy also functioned to de-prioritize those members who were identified as abusing the service. They maintained that it was their experience that those members who rented very high numbers of discs were often engaged in illegal DVD piracy. They said the complaint was the first they had received about the description of their service as "unlimited".
The ASA noted LOVEFiLM's assertion that the majority of users were unaffected by the fair usage policy as the threshold was high in comparison with the average customer usage for each package. We noted the e-mail stated that members could have a maximum of two discs at a time. We noted, however, the aRAB did not refer to the fair usage policy and the magazine insert did not state the limitation of consumers being able to order only three discs at any one time. We considered that those conditions constituted significant qualifications to the claim "unlimited". We concluded that the aRAB were misleading because they did not state that the service was subject to a fair usage policy and that the magazine insert was misleading because it did not explain the limitation of the number of discs users could hold at one time. We told LOVEFiLM to amend the aRAB to include that information and advised them to consult the CAP Copy Advice Team for help with the wording of the amendment.
The ad breached CAP Code clauses 3.1 (Substantiation) and 7.1 (Truthfulness).
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