A war of words has erupted between energy providers after an Octopus Energy advert was banned for claiming that households could have a heat pump installed for as little as £500.
The Advertising Standards Authority (ASA) upheld a complaint against the Greg Jackson-run energy giant, ruling that not enough customers were eligible for the £500 offer for Octopus to be able to promote the price.
Under Competition and Markets Authority guidance, advertisements containing ‘from’ offers should reflect the price that “a significant proportion of consumers were likely to pay”.
In its ruling, which Octopus disputes, the ASA found that when the ad appeared in September Octopus was installing just 5.8 per cent of its heat pumps for at or below the £500 price promoted, considerably below the ASA’s 10 per cent threshold to make such a claim.
The advert promoting “installs from £500” ran predominantly on Facebook. It also claimed a government grant to encourage households to switch from a gas boiler to a heat pump “covers up to 90 per cent of the costs”.
“Replace your old broken boiler with an award-winning energy supplier and help stop our reliance on gas,” it added.
‘Breathtaking hypocrisy’
The ASA said it received two complaints about the advert, one of which came from the Energy and Utilities Alliance (EUA), a trade body which represents legacy gas providers like Centrica, and which has campaigned against the government’s heat pump subsidies.
A spokesperson for Octopus said: “This shows the breathtaking hypocrisy from these fossil fuel lobbyists. They logged this complaint against us, yet their biggest member – British Gas – also claims to install heat pumps from £499.”
“13.9% of all heat pumps sold by Octopus during the campaign were £500 or less, exceeding the ASA’s guideline of 10%. We’d like to see the figures for British Gas.”
The spokesperson added that “Octopus will be reporting British Gas to the ASA and expects to see robust action.”
Complainants challenged whether Octopus could justify its starting price claim, and sought clarity on whether the firm had omitted material information – including eligibility criteria and information on the government grant referenced – from the advert.
“The ad did not state the funding was subject to eligibility criteria,” the ASA said in its ruling.
“While we understood eligibility criteria for the funding were stipulated on a landing page, one click away from the ad, we considered that the fact the funding was subject to meeting specific criteria was material information that was likely to affect consumers’ understanding of the ad’s overall message.”
In its original response, Octopus cited third-party survey data it commissioned on learning of the complaint, which found 58 per cent of respondents gathered that the cost of getting Octopus to install a heat pump could cost £500 with the help of government funding.
The advertising watchdog also found that in the months after the adverts were in circulation, the proportion of people eligible for a price of £500 or lower for the heat pump rose to over 20 per cent.
Octopus said: “We disagree with this ruling. 13 per cent of all heat pumps sold by Octopus during the campaign were £500 or less, exceeding the ASA’s guideline of 10 per cent.”