ASA Adjudication on Rocks and Co Productions Ltd

Ad

A teleshopping ad, on the Rocks and Co Channel, for three Patroke Kunzite rings, was shown in the format of a "reverse auction" where the price of the items dropped rather than increased and customers who stayed with the bidding paid the final on-screen price. The auction price of one item started at £46,552 and dropped slowly at first then more quickly to £3,799, finally closing at £1,499. On-screen text stated "18K Patroke Kunzite & Diamond Yellow Gold Ring. 22.22 Carat Total".

The presenters stated: "This is the biggest Patroke Kunzite ring that we have. It is 22.22 carats ... This is the largest ring ever made of Patroke Kunzite ... They are selling out left, right and centre ... We have actually had a trader contact us and try and buy bulk quantity of Patroke from us ... £3,799 ... This is a crazy auction... superb quality Kunzite ... Do you know the price we have for this piece? ... What was the price we were supposed to close this piece? ... This piece was supposed to be closed at £5,000 ... Had we gone to £4,999 you would have walked away with, we believe, a phenomenal, phenomenal, phenomenal price ... We are at one-third of the price we were supposed to close at ... This is a joke ... Now we are giving gemstones away ... It really is a giveaway price ..."

Issue

A viewer challenged whether the start price of £46,552, together with the presenters' claims "this is a crazy auction" when the ring was at £3,499, "this is a phenomenal price" when the ring was at £3,499, and "joke price" and "giveaway opportunity" when the ring was at £1,499, were likely to mislead as to the true value of the ring.

BCAP TV Code

Response

Rocks & Co Productions Ltd t/a Rocks and Co said their jewellery only retailed on their TV channel and website. They said they made it clear that their "start price" did not imply any worth or value as it did not represent a retail price, replacement price or suggested valuation. They said that, since they were running a reverse auction where the price on screen could only fall, they had to start somewhere. However, they said that once the clock started on the auction the price on-screen became a "now at" price, which represented what the piece was on sale for at any given moment.

Rocks & Co said that Patroke Kunzite was Kunzite from the Patroke mine in the Kunar Valley region of Afghanistan and was the most intensely coloured Kunzite on the market which meant it often commanded a much higher price than other types of Kunzite, excepting individual collectors' pieces. They said, like all gemstones, the price varied based on quality and weight, for example a "D" graded white flawless diamond over one carat in weight would have a much higher price than an "N" graded off-white coloured diamond full of inclusions of the same weight. They said that whilst "regular" Kunzite could retail at between US $100 and US $500  per carat depending on flawlessness, cut and colour, Patroke Kunzite could retail at between US $1,000 and US $5,000 per carat. They also noted additional value would be added to jewellery pieces by famous brand names.

Rocks & Co said that, based on their gem buyers commercial experience in the gemstone industry, Patroke Kunzite stones of larger sizes (15 carats plus) were very uncommon. They said that wholesale prices of Patroke Kunzite, sold at many of the large gem trade shows world-wide, for example in Tuson, Arizona or Basil, Switzerland, could be between US $400 and US $1,000 per carat and that these prices could easily be verified by attending the shows. They said the ring in the auction contained a Patroke Kunzite stone of 22.16 carats and that, based on the minimum wholesale price of US $400 per carat, the wholesale price of the gemstone alone could be calculated to be US $8,864, whereas, based on the maximum wholesale price of US $1,000 per carat, the wholesale price of the gemstone in the ring could be calculated to be US $22,160. They said that these prices excluded the costs of the gold, diamonds, labour and design used in the final ring. They said that, typically in the jewellery industry, a mark-up of anywhere between five and ten times the manufacturing cost was applied to get the retail price for a complete piece of jewellery.

Rocks & Co said that, if the minimum wholesale price of US $8,864 and a conservative exchange rate of two dollars to the pound were applied, then the UK wholesale price for the stone in question could be calculated to be £4,432. They said they were therefore confident their presenter's reference to £3,499 as a "joke" price for the piece was justified. They said the auction closed at £1,499 at a considerable loss to Rocks & Co.

Assessment

Upheld

The ASA recognised that Rocks & Co was entitled to set a starting price for its reverse auction providing it did not mislead. However, in this case we considered the starting price of £46,552 together with the claims "£3,799 ... This is a crazy auction ...","Do you know the price we have for this piece? ... This piece was supposed to be closed at five thousand pounds... Had we gone to £4,999 you would have walked away with, we believe, a phenomenal, phenomenal, phenomenal price ..." including the claims  "joke price" and "giveaway opportunity" when the ring was at £1,499, implied the start price was an amount materially related to the usual retail price or suggested valuation which viewers could expect for the ring. Because Rocks & Co did not provide independent valuation for the ring, including certification by an independent laboratory of the Patroke Kunzite gemstone grade in question, we concluded the ad misleadingly implied the ring was worth more than it was.

The ad breached CAP (Broadcast) TV Advertising Standards Code rules 5.1.1, 5.1.2 and 5.3.1 (Misleading advertising).

Action

The ad must not be broadcast again in its current form.

Adjudication of the ASA Council (Broadcast)