Ad description
A newspaper ad promoting an auction in Wigton, Cumbria on 13 April 2014 was headed "IMPORTANT AUCTION LIQUIDATION OF 700 LOTS TO BE SOLD INDIVIDUALLY - MOST ITEMS TO BE SOLD WITH NO RESERVE PRICE". Text stated "Business Closure in order to settle Bank and Creditor debts of £300,000 we have taken client instructions to immediately clear the following inventory :- NO REASONABLE OFFERS REFUSED". Some of the items listed included the text "Original Oil Paintings & Fine Art Limited Editions ... All to be Offered from £60", "Special Offer - Ltd Edition Marc Chagall - valued at £1750 Reserved £150". Text near the bottom of the page stated "Creditors awaiting payment - All goods to be clear this Sunday, hence the reason for Very Low or No Reserve Price - Viewing is a MUST".
Issue
The complainant challenged whether the ad was misleading because it falsely implied that the auctions were taking place in order to settle debts with creditors, when they understood this was not the case.
Response
International Memorabilia Auctions Ltd believed the claims that the auction of lots related to a business closure to settle bank and creditor debts were accurate in the ad, but believed that it did not imply that the lots in question were being sold because the referenced business was going into liquidation. They provided documentary evidence, including letters from solicitors and accountants, which they believed demonstrated that the company was closing down. Further information was offered to substantiate the advertising references to creditor debts, but that information was not supplied.
Assessment
Upheld
The ASA considered that consumers would understand from the claims "important auction liquidation of 700 lots", "Business Closure in order to settle Bank and Creditor debts of £300,000" and "Creditors awaiting payment", that International Memorabilia Auctions was conducting an auction on behalf of a company that was going into liquidation and was urgently selling their stock in order to pay creditors. We considered that these claims were likely to affect a decision to attend the auction.
Evidence was submitted that suggested that lots were being sold at auction for a company whose business activities had ceased, and that they were clearing all of their stock and had passed it to International Memorabilia Auctions for sale.
Although the submitted evidence included a statement from the company closing down that there were creditor debts to be paid, evidence was not submitted that demonstrated that the sale of the lots was in order to pay off creditors, or that this creditor debt amounted the £300,000 as referred to in the ad. We therefore concluded that the ad was misleading.
The ad breached CAP Code (Edition 12) rules 3.1 3.1 Marketing communications must not materially mislead or be likely to do so. (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).
Action
The ad should not appear again in its current form. We told International Memorabilia Auctions Ltd not to state or imply that the company was being closed to pay creditor debts without holding robust substantiation.
