A website for cremation service Neocremations, www.neocremations.co.uk, seen on 16 April 2020, featured a comparison table within which they compared against Co-op Funeralcare and Simplicity under various categories. One category stated “Large nationwide chain known for taking advantage of vulnerable customers**”, next to which it stated “No” for Neocremations, and gave a tick for both Co-op Funeralcare and Simplicity. The asterisks linked to text which stated “CMA – Funerals Market Study, Interim Report and Consultation 29 November 2018, pages 6-9”.
IssueThe complainant, who believed the report did not state that Co-op Funeralcare and Simplicity were known for taking advantage of vulnerable customers, challenged whether the ad denigrated those services.
Serenity Technologies Ltd t/a Neocremations, said that according to the CMA’s Interim Report, the funeral industry was very fragmented, but there were three sizeable firms of funeral directors, two of which were Co-op Funeralcare and Dignity Plc. They said the report stated that the rest of the industry was accounted for by a long tail of small firms, many of which had only one branch, and given that commentary, they said it was an established fact that Co-op Funeralcare and Dignity were not only the largest suppliers in the UK, but also the only two chains to have nationwide coverage.
Neocremations referred to the report’s introduction, which stated “the profit margins achieved by the largest suppliers in the industry have been high by international standards”, “Together with the large suppliers’ pricing policies, these profit margins are symptomatic of a market that is not working well for consumers” and “It seems clear that the extreme vulnerability of customers has been a major factor in enabling suppliers to charge high prices in this sector”. Neocremations quoted further excerpts, which stated “In summary, we have heard the following concerns: too high funeral prices, a particular issue for those on low income; long-term above inflation price increases; lack of transparency of pricing information; difficulties in comparing funeral packages, because the items included or excluded differ widely”, “arranging a funeral has been described by a funeral director as ‘the ultimate distressed purchase … made infrequently by experts, emotionally vulnerable clients under time pressure” and “Because of these exceptionally difficult circumstances, the bereaved are not able to exercise some of the most basic commercial judgements that customers typically display in more normal circumstances”.
Neocremations said that section 6 of the report was a damning indictment of Dignity and Co-op’s pricing strategy, referring to text which stated “it appears to be fairly well known that price rises well in excess of inflation were a core part of Dignity’s strategy for a considerable period of time”, “Co-op took the decision to follow Dignity’s lead and increase its prices by a similar annual rate” and “Dignity in particular has sought to justify its past large price rises on the basis of quality improvements. However, this is not supported by evidence”.
Neocremations said that while the report did not explicitly cite Co-op Funeralcare or Dignity as “taking advantage of vulnerable customers”, their names were peppered throughout the report and it was clear for anyone who was able to think in the abstract that it was written specifically because of the predatory selling practices of both companies and to bring to attention their anti-competitive and abusive behaviours. They quoted further extracts of the report which stated “We are now proposing to make a Market Investigation Reference (MIR) to carry out an in-depth investigation”, and “important factors in our decision are that: the purchase of products and services relating to a funeral can neither be avoided, nor delayed; customers are extremely vulnerable at the point of purchase”.
The CAP Code stated that marketing communications must not discredit or denigrate another product or marketer. The ASA noted the category “Large nationwide chain known for taking advantage of vulnerable customers**” in the ad, accompanied by a tick in the columns headed “Co-op Funeralcare and Simplicity”. The asterisks linked to text which stated “CMA – Funerals Market Study, Interim Report and Consultation 29 November 2018, pages 6-9”. We understood that the referenced pages of the CMA’s report - the Executive Summary - did not mention either company by name, nor did it identify any large nationwide chains known for taking advantage of vulnerable customers.
We noted that the report stated that “It seems clear that the extreme vulnerability of customers has been a major factor in enabling suppliers to charge high prices in this sector” and continued by stating “But there are other factors at play”. The provisional conclusion of the report stated “there are reasonable grounds for suspecting that one or more of the following features or combination of features prevents, restricts or distorts competition in the supply of services by funeral directors at the point of need in local areas”, and listed “Customers’ vulnerability and difficulty in engaging at the point of need” as one of those features. It did not mention by name either of the companies Neocremations referenced in their ad. Notwithstanding any conclusions that readers might draw from the report regarding Co-op Funeralcare and Dignity Plc’s business practices, we considered that claims that they were “known for taking advantage of vulnerable customers” gave the impression that they operated in an unethical manner. We considered that such claims went beyond justified critical comment, and attacked Co-op Funeralcare and Dignity Plc’s business practices.
We therefore concluded that the ad denigrated those companies and was in breach of the Code. The ad breached CAP Code (Edition 12) rule 3.42 3.42 Marketing communications must not discredit or denigrate another product, marketer, trade mark, trade name or other distinguishing mark. (Imitation and Denigration).
The ad must not appear again in the form complained of. We told Serenity Technologies Ltd t/a Neocremations to ensure their future advertising did not denigrate their competitors.