Last week (23 July 2014) we ruled against Auction House UK Ltd for misleadingly advertising property auction “guide prices”; these are prices which give an indication of the price that the property is expected to sell for and what the vendor is hoping to achieve. We want to make sure that all ads for property auctions are transparent to ensure that prospective buyers can make informed choices.
The advertiser, Auction House, listed each property on their website alongside a “guide price”, but we considered that they should have clearly and prominently qualified each guide price, for example through the use of an asterisk linking to explanatory text that included a definition of the guide price and its distinction from a reserve price (the lowest price the vendor will accept); as well as the fact that it is subject to change. This applies to advertising in all media, including in print and online.
In addition, advertisers should include an explanation that the guide price is an indication of the range within which the minimum sale price will fall, unless they are able to prove that they routinely update their guide price whenever a reserve price is set that is higher than the lower end of the guide price.
Our sister body, the Committee of Advertising Practice (CAP), which is responsible for writing and maintaining the advertising rules, has written to the industry today (28 July 2014) to ensure that their advertising sticks to the rules.
Advertisers are required to make changes immediately and 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.