A tweet posted on 30 December 2018 and two radio ads heard in December 2018, promoted a raffle competition to win a house.
a. The tweet, posted by Win A Mega Home, stated, "You have until tomorrow to buy a ticket to win this house!"
b. The first radio ad stated: "Dear Santa, I've been terribly good, so for Christmas I'd really like a £3m, six-bedroom riverfront home on the edge of the New Forest, with an amazing kitchen, oh, and its own cinema. Obviously. Or I'd settle for an Aston Martin DB11. That'd be ok. With Win A Mega Home you could go into the draw to win this amazing house, with the runner-up winning an Aston Martin DB11. It's £25 per ticket and you need to answer a question. Ticket sales close December 31st and all the details and Ts&Cs are on the website, so don't wait for Santa, click winamegahome.co.uk today."
c. The second radio ad stated: "Imagine your dream home. Imagine a £3m riverfront house at the edge of the New Forest with six bedrooms, six bathrooms, outdoor barbeque house, spectacular views, its own cinema and a whole lot more. With Win A Mega Home you could go into the draw to win this amazing house with the runner-up winning an Aston Martin DB11. It's £25 per ticket and you need to answer a question. Ticket sales close on December 31st so don't miss your chance to Win A Mega Home. All the details and Ts&Cs are on the website. Click winamegahome.co.uk today."
18 complainants, who understood that the quoted prizes, or reasonable equivalents, had not been awarded, and that they were still being promoted as the relevant prizes the day before the closing date, challenged whether the promotion breached the CAP and BCAP Codes.
Win A Mega Home Ltd said the competition launched on 26 March 2018 and the closing date was 31 December 2018. They were very disappointed in the low ticket sales, having approached the competition with a clear plan for selling the required tickets from the beginning. The owners of the business had experience of the speed and coverage of a national news story from reporting of a power failure at their property around Christmas 2013 which resulted in them receiving a large numbers of offers of assistance. They therefore believed that they could generate enough media coverage to enable them to sell all the tickets, or at least the 170,000 tickets they needed to sell to award the house.
Win A Mega Home explained that national media outlets (including print, online and broadcast) were sent two production items for use just before Christmas and again on the run up to New Year 2018, and that the broadcasters were also invited to visit the property in that period. None of it was used, despite similar competitions having received coverage on regional television channels, and despite the coverage the competition had already received in 350 newspapers and on over 200 websites nationally. They explained that they had seen exponential growth in ticket sales based on previous exposure on one national online website and that based on that they had expected total sales generated from that source alone to reach 100,000 tickets. The anticipated TV coverage was therefore expected to generate even more on top of that figure.
Win A Mega Home did not believe there was an issue with the timing of the tweet. They said their systems were designed to be able to deal with a lot of applications in a short space of time, and that the media plan was intended to generate a lot of sales in the period running up to the closing date.
Win A Mega Home explained that the winning ticket was bought on 30 December, at odds of 8 in 14,000 (14,000 entrants having given the correct answer "C"). They said the odds of winning over £100,000 on the Lotto were around two million to one. They considered the prize they had awarded to be remarkable given the odds. In relation to the Aston Martin, they said the press release they had issued made clear that in order for it to be won, a threshold of 195,000 tickets had to be sold. The inclusion of the car was to ensure as best as possible that after sales passed the 170,000 needed to award the house, there was still an incentive for consumers to buy tickets.
In respect of the cash prize Win A Mega Home explained it was never intended or described as an "equivalent” to the house. It was a completely different prize, the basis of which was clearly spelled out in the Terms and Conditions referred to in every ad. Of the sums raised through ticket sales, 25% was retained by Win A Mega Home and the balance awarded as a prize after deduction of the cost of sales. Actual ticket sales were just over £737,000. They therefore retained £184,250; leaving £552,750 from which cost of sales of around £442,680 was deducted, leaving a prize of £110,070.
At the end of the competition Win A Mega Home conducted a survey of all entrants and received 3,480 responses. They said 93% of those replied that they were likely or very likely to enter a competition of a similar nature again. Only 7% replied that they were unlikely to, or definitely would not.
Radiocentre endorsed the advertiser’s response.
The ASA considered that each of the ads made clear that the incentive for entering the competition was the prospect of winning the house pictured in ad (a) and referred to as a £3 million property in the radio ads (b) and (c). The radio ads also referred to a runners-up prize of an Aston Martin. We considered that those who saw and heard the ads would understand that, no matter how many tickets were sold, one winner would receive the property and that those who heard the radio ad would further understand that one runner-up would receive the Aston Martin.
We acknowledged that Win A Mega Home anticipated exponential growth in ticket sales towards the end of the competition period and we considered that it was not unreasonable for them to have continued to promote the competition right up to the closing date. However, we were concerned that their ability to award the house was dependent on ticket sales, which meant there was a significant risk that they would not be able to award the prize as advertised. It was a requirement of the CAP Code that promoters must award the prizes as described in their ads or reasonable equivalents.
We considered that any promoter that 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. Win A Mega Home had fallen significantly short of their sales target. The cash prize of £110,070 was clearly not a reasonable equivalent to a £3m house. We understood that only one winner had been identified, and that no prize (whether an Aston Martin, a reasonable equivalent or otherwise) was awarded to a runner-up.
The terms and conditions stated “in the event of less than the minimum number of ENTRIES 170,000 being sold by the CLOSING DATE, the PRIZE shall be a cash prize equivalent to 75% of the amount received for ENTRIES into the COMPETITION net of promotion costs”. In addition to our concern that the house or a reasonable equivalent had not been awarded, we were concerned that it was not actually possible for prospective participants to know what the prize would be before buying a ticket. They could not know how likely it was that fewer than 170,000 tickets would be sold, how much would be generated from sales below that threshold or what the promotion costs would be. We therefore considered that, even if that term had been prominently stated in the ads it would not have provided prospective participants with sufficient certainty as to the prize available. As it transpired, the winner received a prize that was only 15% of the total amount generated by the competition.
For those reasons we considered that the ads were misleading, that the promotion had not been administered fairly and that it was likely to have caused participants unnecessary disappointment.
The promotion breached CAP Code Edition 12 rules 3.1 (Misleading advertising) and 8.1, 8.2, 8.14 and 8.15.1 (Promotional marketing).
The radio ads (b) and (c) breached BCAP Code rules 3.1 (Misleading advertising) and 28.1 (Competitions).
We told Win A Mega Home to ensure in future that they awarded the prizes as described in their ads or reasonable equivalents.