Background
Summary of Council decision:
Three issues were investigated, all of which were upheld.
Ad description
A national press insert for BMW, featured images of the front of the car, the wheel and the satellite navigation system inside the car. Text on the front cover stated "ARRIVE ON TIME AND ON BUDGET. THE BMW 318d SPORT WITH NAVIGATION AND 5 YEARS' COMPREHENSIVE SERVICE COVER** INCLUDED FROM £299 PER MONTH*". The brochure also featured the details and offers for some of BMW's other models. Page 4 of the brochure was headed "THE ULTIMATE DESTINATION", and featured the terms and conditions of the offers. Text stated "*BMW 318d Sport Saloon with Business Navigation System and 5 years' comprehensive service cover. Plus £1,794 deposit. Finance offer excludes metallic paint £645 RRP as shown". Text further down the page stated "Offer available to business users only. Retail offers also available. Figures exclude VAT at 20%".
Issue
The complainant challenged whether the ad was misleading, because:
1. the offers advertised were only available to business users;
2. the prices shown excluded VAT; and
3. the models featured in the ad were shown with metallic paint and alloy wheels, which the complainant understood were not included in the price shown.
Response
1. BMW (UK) Ltd said the press insert was included in a number of automotive magazine titles and national newspapers. They said the offers were targeted at business users reading these publications and the fact it was directed at business users only was identified in bold print. They also explained that they had a high proportion of sales to business users when compared to competitors.
2. BMW said the prices shown excluded VAT, but noted that rule 3.18 of the CAP Code stated "... 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". They said the ad promoted VAT exclusive rentals and was directed at business users reading the publications and the fact it was directed at business users only was identified in bold print, including the caveat "Figures exclude VAT at 20%".
3. BMW said the car shown was available at the rental price advertised and the ad identified the amount of deposit and the further price details of the options that, when added to the deposit, would achieve the rentals shown. They said the featured models were available at the monthly rentals shown next to them in the main body of the ad if the additional price of the options was included in the deposit.
Assessment
1. Upheld
The ASA noted that asterisks in the main body of the text linked to the terms and conditions, which stated in bold text that the offers advertised were available to business users only. However, we noted that the ad had not been targeted specifically to business users, but appeared in automotive magazines and national newspapers that were likely to be read by members of the public. We considered that it should therefore be made clear that the deals applied only to business users. As the terms and conditions appeared on the fourth page of the ad and the text was smaller than that of the rest of the ad, we considered that consumers were likely to miss this significant qualification. We concluded this condition should have been presented more clearly and next to the prices, and the ad was therefore misleading.
On this 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.
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) and
3.9
3.9
Marketing communications must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify.
(Qualification).
2. Upheld
The CAP Code allowed VAT-exclusive prices to be given if all those to whom the price claim was addressed paid no VAT or could recover VAT. The Code also required any VAT-exclusive prices addressed to those who did not pay or could recover VAT to be accompanied by a prominent statement of the amount or rate of VAT payable. We noted that the terms and conditions to which the asterisk next to the prices linked included bold text that stated "business users only" and "Figures exclude VAT at 20%", but considered this did not make sufficiently clear to consumers that the prices were applicable to business users only and not to members of the public, who would pay VAT. We also noted that the VAT payable was included in the terms and conditions, but considered that linking the prices to the terms and conditions did not make this information sufficiently prominent.
We concluded that, because the ad did not make clear that it was advertising a VAT-exclusive price to businesses only or the VAT that was payable otherwise, it was misleading.
On this 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.
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.
3.4.3
3.4.3
the price of the advertised product, including taxes, or, if the nature of the product is such that the price cannot be calculated in advance, the manner in which the price is calculated
(Misleading advertising),
3.9
3.9
Marketing communications must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify.
(Qualification),
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).
3. Upheld
We noted that the models featured in the ad were available for the prices quoted in the main body of the ad, but this was without the metallic paint and alloy wheels, which would incur extra costs. While we noted that this information was included in the terms and conditions, we considered consumers were likely to assume that the cars as pictured in the ad were available at the prices listed next to them. We therefore concluded that the ad was misleading.
On this 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).
Action
The ad must not appear again in its current form. We told BMW (UK) Ltd to ensure that significant conditions were sufficiently clear and that prices listed referred to the products shown.
CAP Code (Edition 12)
3.1 3.17 3.18 3.19 3.3 3.4.1 3.4.3 3.9
