ASA Adjudication on The Direct Marketing Partnership Group

Ad

A national press ad for a Timeshare reselling company had the headline "'At last we got rid of our timeshare'!" next to a picture of a couple. Text underneath stated "And you can too with The Direct Marketing Partnership Group. We are a little different from the normal resale companies who charge huge registration fees; we don't charge any. We give you straight forward, simple, good advice, face to face in one of our local offices. We guarantee to make you a genuine offer for your timeshare or points, and you could get up to 100% of your money back. Give us a call; it could be worth your while...".

Issue

The complainant challenged whether:

1. the ad misleadingly implied that there was no charge for the advertiser's service, whereas he believed that fees did apply;

2. the phrase "local office" was misleading, because he had had to drive to an office that was over two hours away from where he lived; and

3. the ad misleadingly implied that an offer would be guaranteed, whereas he was told that he would have to pay the advertiser to take the timeshare off his hands.

The ASA challenged whether:

4. the claim "you could get up to 100% of your money back" exaggerated the benefits to the consumer.

CAP Code (Edition 11)

Response

The Direct Marketing Partnership Group (DMPG) explained that they were a marketing company who created appointments for their client Incentive Leisure Group Ltd (ILG), a holiday sales company. They said ILG identified a market in timeshare owners who wished to dispose of their timeshare because it was too restrictive, too expensive and because they realised that the timeshare re-sale market was virtually non-existent. DMPG provided three newspaper articles that they said showed the problems with the timeshare re-sale market.

DMPG said they explained to customers who contacted them that ILG was a holiday company selling a product, and that although they had a way of disposing of unwanted timeshares, they did not give customers cash. DMPG said customers were given a presentation, a copy of which they submitted, which they said provided adequate information about the service ILG offered. They explained that if the customer was in agreement after the presentation, ILG would give the customer a part exchange allowance for the week equal to what the customer originally paid for their share or to the current developer retail value. They said the customer would also receive a redemption certificate for the gross amount of the sale including the part exchange value, which the customer may use to claim a guaranteed 9.5% if 100% of the certificates were redeemed, up to a maximum of 95% depending on the overall number of people who claimed. DMPG said the lowest amount ever claimed was 19.9% of the certificate value and the highest was 68.33%.

1. DMPG said they did not charge customers a fee to register their timeshare for sale, which they said was normal practice for other resale companies.

2. DMPG said the ad was a national newspaper ad and explained that ILG had offices in Edinburgh, Durham, Sale, Lichfield, Oxford, Milton Keynes, Chelmsford, Bristol, Walton on Thames, Guildford, Belfast and Dublin.

3. DMPG said ILG carefully explained their service to customers and credibly demonstrated that it was a better way for customers to get rid of their timeshare and have the holidays the client purchased the timeshare for in the first place.

4. DMPG said ILG gave 100% part exchange allowance for the timeshare against the purchase price of the product, and the opportunity to claim from a guaranteed 9.5% of that full amount if all redemption certificate holders bothered to claim, up to 95% of the certificate value if fewer certificate holders claimed. They explained that the certificate was for the gross value of the sale including the value of the part exchange.

Assessment

1. Upheld

The ASA noted DMPG's argument that they did not charge customers to register their timeshare for sale with them. We understood, however, that customers were required to join ILG's holiday club and pay an annual membership fee if they decided to take up the advertised service. We considered that customers were likely to understand the claim "We are a little different from the normal resale companies who charge huge registration fees; we don't charge any", in the context of the ad as a whole, to mean that they would not be charged a fee to get rid of their timeshare through the advertised service. Because we understood that that was not the case, we concluded that on this point the ad was misleading.

On this point the ad breached CAP Code clauses 3.1 (Substantiation) and 7.1 and 7.2 (Truthfulness).

2. Not upheld

We noted that DMPG had 11 offices around the UK and one in Ireland. We also noted that the ad was placed in the national press and did not list specific locations, and we considered that consumers were likely to understand the term 'local' in that context to mean that DMPG had regional offices across the UK. We understood that consumers had to make an appointment to meet with a DMPG representative, and would be informed of their nearest DMPG office at the time the appointment was made. Although we acknowledged that DMPG's offices would not necessarily be in the immediate local area of all customers, we considered that, because consumers would be aware of how far they had to travel before they committed to an appointment, the ad was unlikely to mislead on this point.

On this point we investigated the ad under CAP Code clauses 3.1 (Substantiation) and 7.1 and 7.2 (Truthfulness) but did not find it in breach.

3. Upheld

The ASA noted DMPG's response and we considered, for the reasons outlined in point 1, that the ad implied that consumers would not be charged a fee to take up the advertised service. We also considered, therefore, that consumers would interpret the claim "we guarantee to make you a genuine offer" to mean that they would receive an offer for their timeshare or points at no additional cost. We understood, however, that in order to take up an offer, consumers had to join a holiday club run by ILG, for which they would be charged an annual membership fee. We also understood that consumers were issued with redemption certificates for the value of the offer made, and that customers could not claim the full amount on those certificates for a further 51 months. We considered that the ad should have gone further to make clear the basis on which an offer would be made to consumers, and because it did not we concluded that the claim "we guarantee to make you a genuine offer" was misleading.

On this point the ad breached CAP Code clauses 3.1 (Substantiation) and 7.1 and 7.2 (Truthfulness).

4. Upheld

The ASA noted from the information provided by DMPG that those customers who were made an offer had to wait 51 months before potentially being able to claim all of their money back. We also noted that those customers had to claim their money back via a redemption programme to which conditions were attached, rather than receiving a cash offer for their timeshare. We understood that the percentage amount of the full offer made to customers that could be reclaimed was dependent on how many other customers also made claims, and consequently how much money was available overall. We considered, therefore, that not only would customers not necessarily get 100% of their timeshare back, but that it was not possible to establish at the time the offer was made what proportion of the value of their timeshare customers were likely to receive. We noted that the ad stated that "you could get up to 100% of your money back". We also noted, however, that the maximum amount received by a customer to date was 68.33% of the value of their timeshare, although we had not seen data that supported that figure or that showed how many customers had achieved that amount. We considered that 68.33% was significantly less than the advertised figure of 100%, and because we had not seen any data that showed the amount of money that customers had received, or the proportion of their client base that those customers represented, we concluded that the claim was misleading.

On this point the ad breached CAP Code clauses 3.1 (Substantiation) and 7.1 and 7.2 (Truthfulness).

Action

The ad must not appear again in its current form.

Adjudication of the ASA Council (Non-broadcast)