Background
Summary of Council decision:
Two issues were investigated, both of which were Not upheld.
Ad description
The website www.timeshare.uk.net, seen in February 2010 and April 2012, featured a video of a woman who said, "We offer free consultations in house or over the phone for both buyers and sellers and we are one of the few companies never to have charged upfront fees for registrations. Our valuations are realistic, based upon many years of experience and a thorough knowledge of the market".
Issue
The complainant challenged whether the claims:
1. "We are one of the few companies never to have charged upfront fees for registrations" was misleading because she had used the service and had been charged a £400 up-front fee; and
2. "Our valuations are realistic" was misleading because she believed the advertiser had overvalued her timeshare week.
Response
1. Timeshare Computer Link Ltd (Timeshare) stated that they had been selling resale timeshares since 1996 and that it had always been their policy to offer a free registration service. They stated that as members of the Resort Development Organisation (RDO) they were required to offer all clients the option of a free registration meaning that they needed to list a client's details and ownership and to make every effort to find them a buyer. They said that 85% of their database had chosen this option over an advertised listing. They stated that from 2004 they had offered an advertising service which had stopped in February 2011 and that in March 2012, they started to offer an option of a 12-month web listing for £200 that very few people had taken up because of the current economic climate. They explained that the advertising service they offered was intended to promote customers holiday ownership in the national press and to provide a listing on their website for as long as it took to find a buyer. They said they had used various media including magazines, airport promotions and in-flight magazines and that all members of the RDO offered an advertising option.
2. They stated that there were no hard and fast rules with regard to valuations but that they based it on what other sellers were requesting and what they had sold in the past. They explained that they looked at their competition when making valuations but that individual valuations were partly based on the expertise of the sales person and their confidence and ability. They stated that the biggest factor in a sale was the management fee alongside the resort and the time of year, and that buyers did not purchase timeshare purely because it was cheap as other factors would also be taken into account. They explained that buyers generally had a choice of hundreds of weeks at most resorts but that invariably they would only be interested in a couple of options (such as school holidays and special occasions). They provided details of the specific prices relating to the complainants timeshare. They provided details of the price at which direct competitor companies had recently set their prices and compared them against their own current prices (for the results from the same search parameters) which they believed demonstrated that their prices were either on a par with (or more conservative than) the industry and that the valuations were therefore realistic. They also provided details of prices on eBay, some of which started at 99p or £9.99 and explained that an identical property had been listed at both £2,000 and £30,000. They stated that essentially timeshares were not worth anything and the prices on eBay illustrated this. They re-iterated that it was a very free and competitive market but also that it was a depressed market.
Assessment
1. Not upheld
We noted customers were given the option of paying a £200 deposit for the advertising of their timeshare following registration with the service and that this sum was returnable upon the sale of that timeshare (through Timeshare). However, we also noted their comments that the majority of registrants did not use their advertising service and therefore did not incur this additional advertising deposit charge. Furthermore, we noted Timeshare did not charge for registration and that this was in line with the requirement of membership with the RDO trade-body. We considered that the claim "we are one of the few companies never to have charged for upfront fees for registration" was accurate and that, whilst members were required to pay a deposit for advertising of their timeshare, this was not commonly taken up by customers. We considered that this optional charge for advertising was unlikely to affect an average consumer's decision to register with that company and it was therefore not necessary for that information to be included in the ad. We therefore concluded that the ad was not misleading.
On this point we considered the ad under CAP Code (Edition 12) rules
3.1
3.1
Marketing communications must not materially mislead or be likely to do so.
3.3
3.3
Marketing communications must not mislead the consumer by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that the consumer needs to make informed decisions in relation to a product. Whether the omission or presentation of material information is likely to mislead the consumer depends on the context, the medium and, if the medium of the marketing communication is constrained by time or space, the measures that the marketer takes to make that information available to the consumer by other means.
(Misleading advertising) and
3.7
3.7
Before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers are likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation.
(Substantiation) but did not find it in breach.
2. Not upheld
We considered that within the context of a claim for a timeshare sales/purchasing company, the average consumer who was interested in re-selling a timeshare would interpret the claim "Our valuations are realistic" to mean that the advertiser's valuations were on a par with those that were being made by their competitors and considered that consumers would understand that, in the current economic climate, there was no guarantee that any of those prices were going to be achieved and therefore value was what someone was willing to pay (which could be considerably lower than what a seller would realistically hope to achieve). We noted that because of current economic conditions, the industry had become stagnant and that few people were buying and selling holiday ownership. However, we considered that consumers would not expect this to be directly represented in valuations because it would result in the devaluation of the entire timeshare market both now and in the future. The evidence provided by Timeshare demonstrated that their valuations were either on a par, or in fact lower than those offered by some of their competitors, and the remaining evidence demonstrated that valuations varied greatly for the same property but that the advertiser's prices fell well within that range. We considered that this was sufficient to demonstrate that their valuations were consistent with or in a middle range of the valuations within the industry as a whole. We therefore concluded that within the context of this particular industry and the economic climate the claim "Our valuations are realistic" was not misleading.
On this point we considered the ad under CAP Code (Edition 12) rules
3.1
3.1
Marketing communications must not materially mislead or be likely to do so.
3.3
3.3
Marketing communications must not mislead the consumer by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that the consumer needs to make informed decisions in relation to a product. Whether the omission or presentation of material information is likely to mislead the consumer depends on the context, the medium and, if the medium of the marketing communication is constrained by time or space, the measures that the marketer takes to make that information available to the consumer by other means.
(Misleading advertising) and
3.7
3.7
Before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers are likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation.
(Substantiation) but did not find it in breach.
Action
No further action necessary.
