Ad description
The website www.bike2workscheme.co.uk promoted a cycling scheme. Text on the home page stated "SAVE UP TO 42% ON THE COST OF A BRAND NEW BIKE & EQUIPMENT".
Issue
The complainant challenged whether the "up to 42%" savings claim was misleading and could be substantiated.
Response
Bike 2 Work Scheme Ltd stated that the saving of up to 42% referred to the difference between what a consumer would pay if they rented a bike and equipment through Bike 2 Work's salary sacrifice scheme, as opposed to doing the same as an individual. They explained that the saving was achieved because the monthly repayment amounts were taken from an individual's gross pay. The saving of 32% would be achieved by those on the basic tax rate, and a saving of 42% by those on the higher tax rate. They said, if a consumer was renting a bike independently of the scheme, they would have to make a monthly payment out of their net pay (after tax and national insurance), and it would cost up to 42% more. They highlighted that the ad did not state that the saving related to the cost of purchasing the bike and equipment.
Bike 2 Work also highlighted that as the scheme required a consumer to enter into a hire agreement with their employer, the employer remained the legal owner of the bike during the hire period and after it had ended. They explained that in most cases ownership would be transferred to the employee at the end of the hire period, but that required an additional payment from the employee.
Bike 2 Work stated that full information setting out how the scheme worked, the fact that an employee leased the bike and equipment from their employer, and the procedure of transferring ownership at the end of the hire period, was included in the FAQ page on their site. In light of that information, they believed that consumers would understand how the saving could be achieved.
Assessment
Upheld
The ASA noted that the headline claim on the website stated "Save up to 42% on the cost of a brand new bike & equipment". Whilst we appreciated that additional information regarding the scheme and how the saving was calculated appeared on the site's FAQ page, we noted that there was no further text explaining the basis of the claim on the home page. We considered that because the claim explicitly referred to "the cost of a brand new bike and equipment", most consumers reading the claim would understand it to mean that by taking part in the scheme they could save up to 42% on the cost of purchasing a bike and any related equipment, in comparison to the cost of purchasing the items outright. We noted Bike 2 Work's explanation of the way the hire agreement worked, and the fact that consumers could subsequently take ownership of the bike at the end of the rental period at an additional cost. We understood that the claim was intended to convey the amount a consumer could theoretically save in tax and national insurance when renting the items from their employer and making repayments from their gross pay, as opposed to the cost had the payments been taken from their net pay. Because we considered that the claim did not make the basis of the saving clear, or fully explain that the items were not owned by the employee during the repayment period, we concluded that the claim was misleading.
The claim breached CAP Code (Edition 12) rules
3.1
3.1
Marketing communications must not materially mislead or be likely to do so.
(Misleading advertising),
3.17
3.17
Price statements must not mislead by omission, undue emphasis or distortion. They must relate to the product featured in the marketing communication.
and
3.22
3.22
Price claims such as "up to" and "from" must not exaggerate the availability or amount of benefits likely to be obtained by the consumer.
(Prices), and
3.39
3.39
Marketing communications that include a price comparison must make the basis of the comparison clear.
CAP has published a Help Note on Retailers' Price Comparisons and a Help Note on Lowest Price Claims and Price Promises.
(Price comparisons).
Action
The claim must not appear in its current form again. We told Bike 2 Work Scheme Ltd to ensure they made the basis of their savings claims clear in future, and to not state or imply that by participating in their scheme a consumer could save up to 42% on the cost of purchasing outright a bike and corresponding equipment.
