Arnold Clark Misleading advertising Upheld

[Conniff]

ASA Adjudication on Arnold Clark Automobiles Ltd

 

Ad

 

Claims on www.arnoldclark.com for a used car stated "2003 (03) Vauxhall Corsa 1.2 SXi 3 Dr. Sale Price £2988. Pre Sale price £3488. Save £500 ...".

 

Issue

 

The complainant challenged whether the savings claim was misleading, because he did not believe the car had been offered at the higher price for a sufficient period of time to avoid customers being misled by the price reduction.

 

CAP Code (Edition 12)

 

3.13.17

Response

 

Arnold Clark Automobiles Ltd (ACA) pointed out that they had been trading since 1954 and the Real Sale had been used as a marketing initiative for the last 20 years, which returned around 25,000 vehicle sales per year. They said this was the first type of complaint they had received.

 

They explained that the car was on sale at the higher price of £3,488 for 10 days from 13 December 2011 to 23 December 2011, at which point it was reduced to £2,988. ACA admitted that they had not advertised the car at the higher price for 28 days, as recommended in the BIS Pricing Practices Guide. They said the nature of the motor trade industry, where in order to have a viable business model used stock needed to be turned over every six weeks, rendered the 28-day rule unviable and would be damaging to their business. They said they had been advised by their Primary Authority to display a notice on the car in the showroom if it had not been on sale at the higher price for 28 days, although they had mistakenly omitted to do this for the car in question. They provided a copy of the notice.

 

They believed the price of £3,488 was a reasonable price at which to sell that particular model and age of car (2003 Vauxhall Corsa 1.2i 3 door) and they explained that the Manager had looked at how the rest of the company priced similar vehicles at that particular point in time. They provided a copy of a spreadsheet showing two similar vehicles at that time were priced at £3,488 and £3,988. They also provided copies of third-party ads for similar used cars which were being advertised for around £3,500.

 

Assessment

 

Upheld

The ASA noted the BIS Pricing Practices Guide (the Guide) was not binding on traders, the Courts or the ASA, but that the Code stated that it should be taken into account. We noted the Guide recommended that a price used as a basis for a comparison should be the most recent available price for 28 days or more. We acknowledged that this need not always be the case and that if a comparison used in an ad differed from this advice, the basis of the comparison should be made clear.

 

We noted that the car had been advertised at the higher price of £3,488 for only 10 days and that the website did not make that clear, for example, it did not contain the dates between which the higher price was applicable. We understood that this information was normally provided in the notice which was displayed on the car in the showroom, as advised by ACA's Primary Authority, although this information was not provided on the website.

We also noted the Guide stated that price comparisons must be reasonable in terms of time and that prices used as a reference for price comparisons should be genuine retail prices, which included, amongst other things, that the item was on sale at the higher price for a sufficient period of time to allow consumers to become aware of the availability of the item, view the item, make up their minds whether to purchase them and, if so, complete the purchase.

 

We noted ACA's comment regarding the speed of stock movement in the used motor trade industry, and considered that a consumer looking to purchase a used car would normally have a model, make and age in mind, and would realise that they would have to act quickly in relation to an advertised vehicle since there was only one item available. We therefore concluded that 10 days was a sufficient period of time to constitute a genuine offer of sale for this type of product.

 

Nevertheless, because the website did not make clear that the car had been advertised at the higher price of £3,488 for only 10 days, for example by stating the dates between which the higher price applied, we concluded that the savings claim was misleading.

 

The claim breached CAP Code (Edition 12) rules 3.1 (Misleading advertising) and 3.17 (Prices).

 

Action

 

The claim must not appear again in its current form. We told ACA to take care when advertising sale prices to ensure that it is made clear where a car has been advertised at a higher price for less than 28 days.

 

They say this is the first complaint, so where are all the complainents that have been here, it's no good just moaning, you have to go out and DO something.

Edited June 14, 2012 by Conniff

[Conniff]

This isn't just about misleading advertising. Have you been referred to TS under s.20 CPA1987 -

 

 

 

Section 20 of the Consumer Protection Act 1987 makes it a criminal offence for a person in the course of his business to give consumers a misleading price indication about goods, services, accommodation (including the sale of new homes) or facilities. It applies however you give the price indication - for example, in a TV or press advertisement, on a website, by email or text message, in a catalogue or leaflet, on notices, price tickets or shelf-edge marking in stores, or if you give it orally, for example on the telephone. The term "price indication" includes price comparisons as well as indications of a single price.

So why was Arnold Clark just told not to do it again and not prosecuted, your guess is as good as mine.

Edited October 20, 2014 by Conniff
Lead subject changed.