Background

Summary of Council decision:

Three issues were investigated, all of which were Upheld.

Ad description

A website, www.Bidwizeu.com, seen on 2 August 2016, for pay-per-bid auctions.

The home page listed a series of live auctions and each one had a "Bid Now" button. It also listed examples of auctions that had finished and provided a sold price for each item. For example, it stated "MacBook Pro. Sold For £25.71", "iPhone 6S Plus. Sold For £25.12" and "Apple Watch Sport. Sold for £25.53".

A banner stated "Save up to 90% on all our products!".

A pop-up box contained text stating "Why pay retail price? Save Up to 95% on brand new top products ...".

Issue

The ASA challenged whether:

1. the ad was misleading because it did not make sufficiently clear how the auction process worked before consumers registered, including the costs involved and the fact that when buying a bid package, they would be signing up for a 14-day trial membership after which they would be automatically billed £59.99 per month;

2. the claims "save up to 90% on all products" and "save up to 95% on brand new top products", were misleading and could be substantiated; and

3. the 'sold' prices listed on the home page were misleading, because they did not include the cost of bids.

Response

1. Systematic Entertainment Shopping Ltd t/a Bidwiz (Bidwiz) did not provide a substantive response to that point.

2. Bidwiz said they had removed the claim that stated up to 95% off prices.

3. Bidwiz said they had changed the website so that prices for closed auctions stated "closed at" instead of "sold for".

Assessment

1. Upheld

The ASA noted that the home page contained several references to membership such as "Sign Up" and "Free Registration". We considered, therefore, that consumers were likely to understand that they would need to become members of Bidwiz before they could bid. We also noted there were links at the bottom of the home page to the terms and conditions and a page headed "How it Works". Those pages contained some information about how the auction process worked, including that the monthly membership would be renewed automatically for a fee of £59.99 and that there was a three-month minimum subscription period. Although those terms mentioned that there was a cost associated with placing each individual bid, it was not clear what the cost per bid was, because in one example it was stated to be £2 and in another example it was stated to be £1. In any event, we considered that information was material information that consumers needed prior to registration to be able to make informed decisions about the service. We considered that information, which was only accessed via links at the bottom of the home page, was likely to be missed by consumers and was therefore unclear. With regard to the cost per bid, we considered that information was ambiguous and was also not presented clearly to consumers. Because of that, we considered that the ad was misleading.

On that 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).

2. Upheld

We acknowledged that Bidwiz had removed the references to savings of "up to 95%" from their website and we welcomed that change. However, we noted that other savings claims were still appearing on the website (for example, the online video on the "How it Works" page stated "90% OFF THE RETAIL PRICE!”).

We considered consumers would interpret the claims "save up to 90% on all products" and "save up to 95% on brand new top products" to mean that they would achieve a saving of approximately 90% or 95% compared to the price at which those products were generally sold by other retailers. We considered Bidwiz therefore needed to demonstrate that the sold price in the auction was 90% or 95% less than the price at which those products were generally sold. We noted that Bidwiz had not provided any evidence to show the price at which the promoted items were generally sold and the corresponding price at which the product was "won" in the relevant auction, to substantiate the savings claims. For those reasons, we concluded that the ad was misleading.

On that 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),  3.22 3.22 Price claims such as "up to" and "from" must not exaggerate the availability or amount of benefits likely to be obtained by the consumer.  Prices) and  3.40 3.40 Price comparisons must not mislead by falsely claiming a price advantage. Comparisons with a recommended retail prices (RRPs) are likely to mislead if the RRP differs significantly from the price at which the product or service is generally sold.  (Price comparisons).

3. Upheld

We considered consumers would interpret the "sold" prices as representing the total cost of purchasing the items listed. We noted that Bidwiz had amended their website to refer to "closed at" prices, however, we still considered that consumers would understand that price to represent the total cost borne by the bidder to obtain the item.

We understood that consumers were required to place bids to "win" the auction. We understood that there were ways in which participants could obtain bids free of charge and that, for them, the additional cost of purchasing bids would not impact on any savings they might make. However, for participants who did not bid with free bids and who instead had paid for bids, the "sold" prices did not take into account that additional cost, which would reduce any savings those participants were able to achieve. In the two examples we had seen on the website, the bids cost £1 and £2 respectively. We understood that multiple bids were sometimes needed to "win" the auction. Because the "sold" prices listed did not reflect the full cost to the bidder to obtain the item, in particular the individual bid costs, we concluded that the "sold" prices were misleading.

On that 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),  3.17 3.17 Price statements must not mislead by omission, undue emphasis or distortion. They must relate to the product featured in the marketing communication.    3.18 3.18 Quoted prices must include non-optional taxes, duties, fees and charges that apply to all or most buyers. However, VAT-exclusive prices may be given if all those to whom the price claim is clearly addressed pay no VAT or can recover VAT.  Such VAT-exclusive prices must be accompanied by a prominent statement of the amount or rate of VAT payable.  and  3.19 3.19 If a tax, duty, fee or charge cannot be calculated in advance, for example, because it depends on the consumer's circumstances, the marketing communication must make clear that it is excluded from the advertised price and state how it is calculated.  (Prices).

Action

The ad must not appear again in its current form. We told Bidwiz to ensure they held adequate substantiation for price savings claims in future; to ensure that "sold" or "closed at" prices included the cost of the bids placed and to ensure their ads made clear how the auction process worked before registration, including the costs involved and the fact that when buying a bid package, consumers would be signing up for a 14-day trial membership after which they would be automatically billed £59.99 per month and that there was a three-month minimum subscription.

CAP Code (Edition 12)

3.1     3.17     3.18     3.19     3.22     3.3     3.40     3.7    


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