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The ASA has ruled on how the pricing for a health and fitness app subscription was presented.
An ad for the app featured pricing information. Text stated, "Pay monthly £7.99" and "Pay once £79.99 (Annual)". A button stated, "Buy now" under each option, which linked through to a checkout page.
Four complainants challenged if the ad made it clear that the subscription was for a minimum term of 12 months.
Team RH Fitness Ltd t/a Team RH believed the pricing and 12-month commitment for their monthly plan were both clearly presented on their website and did not mislead consumers. They sought to rely on their terms and conditions which consumers had to accept before paying.
The ASA considered that consumers would understand the claims "Pay monthly £7.99" and "Pay once £79.99 (Annual)" to mean they had the option to pay either £7.99 on a rolling monthly basis, or a one-off annual payment of £79.99. In particular, it thought that consumers were likely to interpret the £7.99 monthly option as something they could cancel at any time.
However, the £7.99 price was subject to a minimum commitment of 12 months. In addition, to download the app, consumers were asked to waive their right to a 14-day cooling off period. This meant that consumers who selected the monthly plan were committed to a minimum total payment of £95.88. This was significant information that consumers needed upfront to make an informed decision about whether to proceed with the subscription.
The pricing page did not make any reference to the 12-month minimum commitment. It was only presented in small subtext beneath the payment button. Even though consumers had to accept the terms, the ASA said that the existence of a minimum term was significant and should have been clearly stated on the pricing page itself, rather than after clicking through to the checkout.
Because the ad did not make clear that the minimum period for the subscription was 12 months, the ASA considered that the ad was misleading and told Team RH Fitness Ltd t/a Team RH to ensure that they did not mislead consumers by omitting to mention that the subscription was for a minimum period of 12 months.
This ruling comes against the backdrop of the new Digital Markets, Competition and Consumers Act 2024 (DMCCA), which introduced new provisions about pricing in April this year. The CMA also recently consulted on certain aspects of price transparency, which included new draft guidance on the pricing of subscription contracts. An example in the guidance that is relevant to this ruling concerned an annual gym membership. The example says that a gym might offer an annual membership for £70 a month with a £30 one-off joining fee. The price of this membership could be advertised as "£70 per month for 12 months, plus a £30 joining fee (Total price for a year: £870)". The guidance said it would also be lawful for the price to be presented as "12 months Membership: You pay £100 for the first month, then £70 per month for the remaining 11 months". The difference here is that it makes clear that you have to pay for the entire year.
When advertising a subscription product, it is vital to make sure that pricing options are clear to consumers, and that it's also clear if there's a minimum term, and how long it is. However, it is important to remember that the DMCCA also introduces new rules on the sale and auto renewal of subscription contracts that are due to come into force around Spring 2026. We are currently waiting for the final guidance on how those rules will operate, especially to deal with the situation where a consumer cancels a subscription contract during the cooling-off period but has used the service in some way during that time.
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