Ad description
A teleshopping ad, for a Klaus Kobec watch, featured on-screen text that stated "Klaus Kobec Black Dial with 14ct Rose Gold Plated Features and Black Ceramic Strap Watch ... now at £219.95 quantity left 75 ...". The price of the product was stated at £219.95. This price then decreased throughout the presentation, during which the presenter stated, "... we cannot really sell you this watch for less than £180. If it gets to £160, we have trouble, because our cost price from this becomes a factor ... Now 179 is an interesting price. That is the price that we needed to sell this at, based on the price that we paid. In 17 pounds time, our cost price becomes a serious factor ... You're kind of doing us here. I've got to tell you ... you're doing us a little bit ... We were talking about cost price forty pounds ago, my producer, you're not thinking under a hundred quid? We can't sell this for less than a hundred quid can we? £117, £116, £115 ...". On-screen text later stated "now at £97.58" and the presenter said, "If you are just tuning in, please don't expect to see this watch going for that price again. Ordinarily, I'm expecting that to go for considerably more." On-screen text then showed the lowest price, where the product then sold out, as £97.58.
Issue
The complainant challenged whether the claims referring to the cost price of the product misleadingly exaggerated the value of the item, because it was sold on the advertiser's website for significantly less.
Response
sit-up Ltd, trading as Price-drop TV, said their business model was unique in that their television broadcasts were based on a falling price auction, rather than the fixed price model that other channels used. Their online service did not incorporate a live falling price element but operated a fixed price service which, unlike the broadcasts, had products that were available 24 hours a day, seven days a week. The television auctions were only available for a matter of minutes and the final selling price could be less, equal or greater than the fixed price that was being offered online. In this case the customer paid £97.58 for the final price shown on the television auction, whereas the online price was always £79.99.
They said other elements such as business running costs, VAT, utilities, rent and other overheads had to be taken into consideration when determining the selling price. They also said producers and presenters would no longer refer to the cost price of a product during a live presentation.
Assessment
Upheld
Throughout the presentation the presenter made various references to the weight and expense of the item and, as the price of the product reduced, stated "... we cannot really sell you this watch for less than £180. If it gets to £160, we have trouble, because our cost price from this becomes a factor ... Now 179 is an interesting price. That is the price that we needed to sell this at, based on the price that we paid." We considered that viewers were likely to understand from this that the cost price of the product was no less than £160. We also considered that, as the price for the product reduced further, the claims "... You're kind of doing us here. I've got to tell you ... you're doing us a little bit... We were talking about cost price forty pounds ago..." implied that, by purchasing the watch via Price-Drop TV, viewers would get it for less than what the advertiser paid for it. The complainant indicated he saw the product on the website priced at £59 and on 18 December 2012 it was priced at £89.99. We considered that the claims referring to the cost price of the product exaggerated its value and therefore concluded that they were misleading.
The ad breached BCAP Code rules
3.1
3.1
Advertisements must not materially mislead or be likely to do so.
and
3.2
3.2
Advertisements must not mislead consumers 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 consumers need in context to make informed decisions about whether or how to buy a product or service. Whether the omission or presentation of material information is likely to mislead consumers depends on the context, the medium and, if the medium of the advertisement is constrained by time or space, the measures that the advertiser takes to make that information available to consumers by other means.
(Misleading advertising) and
3.18
3.18
Price statements must not mislead by omission, undue emphasis or distortion. They must relate to the product or service depicted in the advertisement.
(Prices).
Action
The ad must not appear in its current form again. We told sit-up Ltd, trading as Price-drop TV, not to exaggerate the value of items in future.
