An email, a website and a sponsored post on Facebook for Raffle House, describing two promotions that offered the opportunity to win a house:
a. The email, received on 11 June 2019, featured text which stated “With three weeks to go, our data shows that we’re now only about 6,500 entrants away from being able to guarantee the property as the prize! Following our recent 20% ticket threshold reduction to 120,000, that’s seriously exciting”. Further text stated “A £650,000 London Flat Yours For £5”.
b. The website, seen on 5 August 2019, featured blog posts which discussed the competition to win a £650,000 flat. One post, entitled “How was the cash-prize calculated?”, featured a table which showed how 50% of the total amount received in entry fees was used for the cash prize and after charity donations and payment processor and acquiring bank fees were deducted, Raffle House arrived at a figure of £173,012.93. Text stated “The truth is, running start-ups are costly. In our case, we solicit daily expertise to optimise our marketing campaigns, host our website via market-leading developers to provide customers with a secure and seamless experience, with additional costs and professional services to enable us to run a fully compliant operation” and “The positive news is the money we’ve retained enables us to continue to operate and market our beautiful second property in the heart of East London’s trendy district”.
c. The paid-for post on Facebook, seen on 29 August 2019, featured text which stated “We’ve seen you looking. Be in with the chance of calling a £500,000 London property your home in 2020! Our previous winner, [Winner’s name], had her life changed through Raffle House, will you be next?” Further text stated “Live in London for a tenner.”
1. One complainant and the ASA, who understood that the quoted prize of a £650,000 flat, or reasonable equivalents, had not been awarded, challenged whether the promotion in ads (a) and (b) breached the Code.
2. Another complainant, who understood that the previous winner won a cash prize of less value than the advertised property, challenged whether ad (c) misleadingly implied that they had won a house of similar value to £500,000.
1. Raffle House Ltd said that the cash prize of £173,012.93, which won at significantly better odds than described for the property jackpot prize, was a reasonable equivalent given the significantly reduced odds it was won at. They said they informed customers of how many entrants they required to guarantee the property as the jackpot prize throughout the competition. They said ad (a) was a notification to their customer base on the progress of the competition and was written to be transparent and to illustrate to customers that they were still not in a position to award the property, but that a further 6,500 would guarantee it as a jackpot prize. Raffle House said ad (b) was a transparent circulation of the prize available to all of their customers according to their terms and conditions, which all customers read and agreed to before purchasing a ticket. They said they clearly displayed on the website’s home page and elsewhere that the ticket threshold had to be reached to award the property, otherwise the prize was one of cash.
2. Raffle House said that in none of the ads did they state that their previous winner had won a property. They said the words “This is absolutely life-changing for me” were directly quoted from another blog post and was the previous winner’s opinion based on their personal circumstances.
The CAP Code stated that promoters must award the prizes described in their marketing communications or reasonable equivalents. The ASA noted the opening words of ad (a) which stated “With three weeks to go, our data shows that we’re only about 6,500 entrants away from being able to guarantee the property as the prize!”, with the words “guarantee the property as the prize” emboldened. In that context, and alongside the further text which stated “A £650,000 London Flat” and “Yours for £5” in ad (a) and three images of a property, we considered the incentive for entering the promotion was winning the £650,000 flat in London. We considered that any promoter who needed to generate sufficient revenue from the competition to fund the advertised prizes was likely to breach the Code if they failed to sell the requisite number of tickets.
We understood that the property described in ad (a) was not awarded and that a cash prize of £173,012.93 was given to the winner instead, as explained in ad (b). The cash prize was clearly not a reasonable equivalent to the quoted prize of a property worth £650,000. We acknowledged that the terms and conditions explained that a cash prize would be offered if the ticket threshold could not be reached in order to offer the property. However, that was not explained in ad (a), only that Raffle House were 6,500 entrants away from being able to award the property. Given the number of references to the property, we did not consider that this to overrode the impression created that the purpose of entering the competition was to be in with a chance of winning the property. While we understood that ad (a) referred to the requirement for a further 6,500 entrants in order to guarantee the property, it did not explain what would happen if Raffle House did not receive the quoted number of entries and prospective participants could not know how likely it was that a further 6,500 tickets would be sold in order to reach the 120,000 ticket threshold required to secure the property as the prize. As it transpired, the winner received a prize that was less than 27% of the property’s value and less than 43% of the total amount generated by the competition.
For those reasons, we considered that the quoted prize or reasonable equivalents had not been awarded and that the promotion was likely to have caused participants unnecessary disappointment. We therefore concluded that the promotion breached the Code.
On that point, the promotion breached CAP Code (Edition 12) rules 8.2 (Promotional marketing) and 8.15.1 (Administration).
In the context of a claim which stated “Be in with the chance of calling a £500,000 London property your home in 2020!”, alongside text which stated “Our previous winner … had her life changed through Raffle House, will you be next?” and emoji icons of a house and key, we considered that consumers would understand from ad (c) that the previous winner had won a London property similar to the one being offered in this promotion. Although the ad did not explicitly state that the previous winner had won a property, we considered that was the clear implication of the claims that there was a chance to win a property worth £500,000, and that the previous winner’s life had been changed through “Raffle House”. We understood, however, that the previous winner had not won a house, and in fact had won a cash prize of £173,012.93, as referred to in ad (b), which we considered exaggerated the value of the prize that had been won in the previous promotion. In light of the above, we concluded that ad (c) was misleading.
On that point, ad (c) breached CAP Code (Edition 12) rule 3.1 (Misleading advertising).
We told Raffle House Ltd to ensure in future that they awarded the prizes as described in their marketing communications or reasonable equivalents, and that their future advertising did not mislead by exaggerating the value of a prize that had been previously awarded.