Today (28 July 2014) the Committee of Advertising Practice (CAP) sent letters to the property auction sector regarding the enforcement of an ASA ruling, published last week, that requires advertisers to give greater clarification around “guide prices” in ads for property auctions. This will provide greater transparency across the sector, so that the ads aren’t misleading and prospective buyers are able to make more informed decisions.
The ruling, against Auction House UK Ltd, is enforceable from the date of publication (23 July 2014) and affected advertisers are expected to take immediate action to ensure their websites, catalogues and other ads are compliant.
In summary, advertisers should ensure their ads, in all media, meet the following requirements:
- Every time a guide price is shown there must be explanatory text either
(a) clearly alongside every guide price or
1. within the marketing communication e.g. the same webpage, press ad or catalogue, and
2. linked to each guide price by an asterisk or similar.
- This explanatory text must include:
- A definition of a guide price
- Its distinction from a reserve price (which would likely require a definition of a reserve price)
- Text making clear that these prices are subject to change.
- Unless the auctioneer routinely updates the guide price whenever a reserve is set that is higher than the guide price or the lower bound of the guide price range, the explanatory text must also include:
- An explanation that the guide price is an indication of the range within which or, in the case of single figure guide prices, within ten percent of which, the minimum sale price will fall.
The ASA sought input from two industry bodies, the National Association of Valuers and Auctioneers (NAVA) and the Royal Institution of Chartered Surveyors (RICS), during the investigation and both bodies issued information alerts about the ruling on 23 July 2014:
The CAP Compliance team will closely monitor websites and press ads from Monday 1 September 2014 and catalogues and other media from Monday 6 October 2014 with a view to taking enforcement action against non-compliant advertisers from these dates.
If you received the letter and are unsure about the requirements, please respond to the Compliance team. If not, or if you want more general help on sticking to the rules, please speak to the CAP Copy Advice team.