Watchdog finds Telus ad on wireless prices misled consumers

Canada’s advertising standards body has found Telus Corp. made misleading claims in a full-page newspaper advertisement in which the company claimed it was a “myth that Canadians pay some of the highest wireless prices in the world.” In its ruling, Ad Standards Canada said Telus incorrectly conflated affordability and price in the advertisement. The full-page ad in a Quebec newspaper stated Canadians pay less for wireless services than Americans and that it was a myth Canadians pay some of the highest wireless prices in the world, referring to a PwC Canada 2019 study that showed “the average Canadian household spends just 1.6% of their disposable income on wireless versus 2.6% in the US.” But the Ad Standards Council said in its ruling that while the study supported the claims that Canadians paid less for wireless than Americans, and the average Canadian household spent a smaller percentage of its disposable income on wireless, there was “no support” for the claim that it was a myth that Canadian wireless prices were some of the highest in the world. “The study discussed affordability, rather than prices, and it only addressed 4 countries in total, rather than most, or all, countries in the world. Council determined that if Canadians are spending a smaller percentage of disposable income on wireless than Americans, it does not necessarily follow that the prices for wireless are lower in Canada than they are in the U.S.,” the ruling states. “In Council’s view, the advertisement incorrectly conflated affordability and pricing, and in assessing the truthfulness and accuracy of the advertisement, this claim strongly impacted the general impression conveyed.” The Ad Standards Council unanimously agreed that Telus had breached clause 1 (a) of the Canadian Code of Advertising Standards, which states that “Advertisements must not contain, or directly or by implication make, inaccurate, deceptive or otherwise misleading claims, statements, illustrations or representations.” Ad Standards Canada is the advertising industry’s self-regulatory body, with a volunteer board of directors. Its councils consist of senior members of the advertising industry, as well as members of the public. The ruling does not make a determination as to whether Canada’s wireless prices are high or low compared to other countries, but simply states the claim that the PwC study shows talk of high prices are a “myth” is misleading. In March, the federal government issued a directive for the Big Three incumbents to lower the pricing of mid-range plans offered by their flanker brands by 25 per cent over the following two years, after making a pledge to reduce prices a central part of its election platform. Wireless pricing is a particularly hot topic in the wireless industry, with opposing sides of the wireless industry routinely taking issue with the methodology or accuracy of published pricing reports or studies. Ad Standards Canada said Telus did not respond to the complaint, which was made by a member of the public. In a response to an inquiry from The Wire Report, Telus spokesperson Richard Gilhooley said the company was "not aware" of receiving the request for comment and was "reviewing remedies against the ASC for its apparent improper process." Gilhooley said Telus was confident the ad was "fair and accurate" and pointed to recent studies conducted by the U.S.'s wireless industry association, the CTIA, that showed "that Canadians receive some of the highest value for their cellphone spending." Gilhooley also claimed Ad Standards Canada erroneously separated the two sentences of the advertisement and "inserted its own definition of pricing rather than reading both sentences together, which makes it clear that affordability was deliberately being used as the context for evaluating pricing." According to Ad Standards Canada's website, an advertiser is requested to amend or withdraw an advertisement if a complaint about it is upheld. The council does not have the ability to hand out monetary penalties. Telus’ Connecting Canada For Good website continues to display similar language around Canadian wireless pricing, stating under its “know the facts” section that “It’s a myth that Canadians pay some of the highest wireless prices in the world. The reality is that a lot has changed over the past few years - and we keep getting better.” Note: The story was updated on Sep. 4 to include Telus' response. -- Reporting by Adam Langenberg at alangenberg@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Watchdog finds Telus ad on wireless prices misled consumers

News | September 3, 2020

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Watchdog finds Telus ad on wireless prices misled consumers

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