Background
Summary of Council decision:
Two issues were investigated, both were Upheld.
Ad description
Claims on the www.ebuyer.com related to a hard drive. Text included "£90.03 inc. vat … Save £77.96" and the text "£167.99" was crossed out. The ad included two tick boxes labelled "Add 2 year warranty £14.99 Add 3 year warranty £19.98".
Issue
The complainant challenged whether:
1. the savings claim was misleading and could be substantiated; and
2. the ad misleadingly implied that it was necessary to pay extra for a warranty beyond one year, whereas he understood a three-year warranty was included.
Response
1. Ebuyer (UK) Ltd (Ebuyer) said hard drive prices had more than doubled in the six weeks between 1 October and 14 November 2011 following floods in Thailand. Half of Thailand's production capacity, which had previously accounted for 40–45% of worldwide hard drive production, was impacted. They sent news articles related to that and said average selling prices increased by over 150% during the same period, which equated to an increase of 5.4% per day from £43.29 to £109.78 overall. The said prices of the most popular hard drives had previously, from May 2011, remained very consistent and had an average lowest price of around £44. They said prices continued to be high and submitted invoices related to the hard drive previously being sold.
2. They said the warranties were not forced on customers but were offered optionally as additional protection against accidents and failures. They said all products could be added to the basket with or without the warranty option being selected; it was not ticked by default and therefore consumers would need to make the active decision to add it. They said the warranty could also easily be removed from the basket if a consumer chose to add it but then changed their mind.
Assessment
1. Upheld
The ASA noted the invoices submitted by Ebuyer, which related to only two transactions and were from around six months before the ad appeared. We noted that the prices for the hard drive, before VAT, were £165.27 and £179.59. While the prices when VAT was added were both higher than the advertised 'was' price, we were concerned that we had not seen evidence that related to more recent transactions and showed the product being sold at the price stated in the ad. Because we had not seen evidence to demonstrate that the 'was' price of £167.99 was a genuine previous selling price and that the advertised saving of £77.96 was therefore genuine, we concluded that the savings claim was misleading.
On this point, 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), 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) and 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. (Prices).
2. Upheld
We noted the ad provided the option to add either a two- or three-year warranty, which we considered was likely to be interpreted as suggesting any warranty included with the product was shorter than that. We understood the hard drive came with a three-year warranty included, however, and therefore considered the ad misleadingly implied that it was necessary to purchase an additional warranty when that was not the case. We concluded that the ad breached the Code.
On this point, the ad breached CAP Code (Edition 12) rules
3.1
3.1
Marketing communications must not materially mislead or be likely to do so.
and
3.3
3.3
Marketing communications must not mislead the consumer 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 the consumer needs to make informed decisions in relation to a product. Whether the omission or presentation of material information is likely to mislead the consumer depends on the context, the medium and, if the medium of the marketing communication is constrained by time or space, the measures that the marketer takes to make that information available to the consumer by other means.
(Misleading advertising).
Action
The ad must not appear again in its current form. We told Ebuyer not to make savings claims in future unless they were in a position to demonstrate that they were based on genuine previous selling prices. We also told them to ensure they did not in future imply it might be necessary to buy extra items that were already included with the advertised product.
