Online trading + offline advertising = Breach of ASA Regs?

A recent ruling of the Advertising Standards Authority suggests that businesses which trade online should think twice about circulating printed advertisements in certain situations.  Where an online business has variable pricing, which reacts to changes in supply and demand in the marketplace, it will be misleading to circulate hard copy advertising material which advertises those goods/services at a fixed price if the fixed price is not available for the full duration that the ad is in circulation.  

The ASA upheld a complaint against an online company which advertised a specific laptop in a brochure at £789.  The brochure also stated ““ … Check www.dabs.com for latest prices”.  However, the specified laptop was not available online for that price.  Part of the problem was an error in the advertisement, which failed to include the VAT element of the price.  Even allowing for this error, however, the ASA still held that the price in the brochure was misleading because the actual price of the goods was liable to fluctuate on a daily basis.

In its Adjudication notice, the ASA stated:
“We considered the text ‘ … Check www.dabs.com for latest prices’ did not make sufficiently clear that the prices in the ad were subject to regular change; we considered that a brochure was an unsuitable medium for advertising their products because it was likely to remain in circulation after prices had changed. Because the laptop was not available at the advertised price, we concluded that the ad was misleading.”

The conclusion to be drawn from this is that companies may need to re-think their advertising strategy in relation to their online sales.  Where the price of their goods or services is liable to fluctuate in price, then traders should ensure that the published price will be available for the duration of the advertisement. 

This decision adds another layer of legal regulation to the assorted consumer protection regulations already in place, including the Consumer Protection (Distance Selling) Regulations, the Ecommerce Directive, and the Consumer Protection from Unfair Trading Regulations.

Note:  the Regs which were breached by this advertisement were: CAP Code clauses 3.1 (Substantiation), 7.1 (Truthfulness) and 15.1 (Prices). 

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