Retailer warned on 'free phone' ad

A major phone retailer has received a warning from the advertising regulator after including the cost of a "free" handset in the monthly contract price.

Carphone Warehouse advertised the Samsung Galaxy S4 Mini phone as free on Vodafone and T-Mobile 24-month tariffs, listing the T-Mobile cost as £27 per month and the Vodafone cost as £25 per month.

But a reader who believed that the cost of the handset was included in the monthly contract price, and that equivalent sim-only plans were cheaper, complained that the "free" claim was misleading.

Carphone Warehouse said it was "mindful of their duty not to mislead consumers by labelling a handset as free when it was in fact taken into account in the pricing of the tariff" - or inclusive.

It said the two tariffs that the complainant had referred to, and believed to be equivalent, had different inclusions to the offer that included the handset and could not be compared.

It said the tariff in question could be bought either without a phone or with various different "free" phones, all with the tariff at the same price.

But the Advertising Standards Authority (ASA) said it had not seen evidence that the 24-month sim-only tariff was actually purchased by consumers.

It said: "We considered that the cheaper, similar sim-only tariffs, and the fact the direct equivalent sim-only tariff was not available on the same sim-type as the 'free' phone, demonstrated that the £25 per month cost in the ad included the cost of the phone.

"Therefore, £25 was not a genuine stand-alone price for the tariff. We also noted we had not seen evidence that the 24-month sim-only tariff was actually purchased by consumers.

"We concluded that the claims the phone was 'free' were misleading."

It ruled that the ad must not appear again in its current form, and added: "We told the Carphone Warehouse to ensure that where the cost of a phone was included in the package price it was described as 'inclusive' rather than 'free'."