Background
TransferWise Ltd is authorised by the Financial Conduct Authority (FCA) for the provision of payment services. As of 22 July 2016, complaints about misleading non-broadcast advertising for such services will be referred to the FCA for their consideration.
Summary of Council decision:
Three issues were investigated, all of which were Upheld.
Ad description
Claims on a website, www.transferwise.com, for an online money transfer service, seen on 30 August 2015, stated "THE CLEVER WAY TO BEAT BANK FEES ... With TransferWise you save up to 90% ...". It also included a currency converter calculator, which stated "You're sending exactly" in GBP and "Recipient gets" in another currency. Underneath it stated the exchange rate used, the fee applied, when the money would arrive and "You're saving: £X", which changed depending on the amount inputted into the calculator. A pop-up appeared when clicking on the saving amount or a button immediately below which stated "SEE HOW". The pop-up stated figures amounting to a comparison between TransferWise and the 'Average Bank'. In particular, it stated the fee, estimated rate, amount the customer would receive after transfer and saving for TransferWise compared to the 'Average Bank'.
Issue
1. The complainant challenged whether the savings claims quoted in the calculator were misleading and could be substantiated.
2. The ASA challenged whether the comparative claim "you save up to 90%" against 'banks' was misleading and could be substantiated.
3. The complainant and the ASA challenged whether the comparative savings claims were verifiable.
Response
1. & 2.TransferWise Ltd explained that they regularly commissioned an independent third party to conduct 'mystery shopping exercises' to compare competitors' costs of transferring foreign currency with the cost of TransferWise's service. The results of those mystery shopping exercises formed the basis of the claims "You're saving £xx" and "you save up to 90%". They provided the results of the most recent mystery shopping exercise, which took place between July and September 2015. They explained that they had commissioned market research for transfers of £1,000, £5,000 and £10,000 across six different currency routes, which were the most popular currency routes and made up the majority of UK transfers. They believed it was proportionate and reasonable for TransferWise to survey transfers for £1,000, £5,000 and £10,000 because transfers up to £10,000 made up approximately 99% of all transfers made with TransferWise. They said the mystery shopping exercise was conducted against all their major competitors and canvassed a significant proportion of the UK GBP foreign currency bank transfer market (over 90%). They believed the mystery shopping exercises were a relatively accurate measure of the actual savings customers could achieve by using TransferWise.
TransferWise believed the claim "You're saving £xx" would be read together with the claim "you save up to 90%", and as such, customers would not consider the “You’re saving £xx” claim to be absolute. They believed consumers would view the savings claim as a practical example of the savings they could achieve.
They said, according to the recent mystery shopping exercise, the mean average saving to a customer on a transfer of £1,000 into Euros was £45.84, which equated to an average percentage saving of 89.43%. They explained that they had taken the average percentage saving and had extrapolated it to transfers involving other amounts and other types of currency. They said £1,000 into Euros was the most frequently transferred amount on the most frequently used currency route. Until recently they had included a statement on the website explaining that the saving was based on transfers of £1,000 into Euros and they were willing to re-insert that statement.
TransferWise understood the ASA had a general rule that 'up to' savings claims were not misleading if 10% of the products or services advertised were available at the 'up to' price. They believed that consumers could always make a saving with TransferWise, compared to banks, because even if TransferWise was not initially the cheapest provider, they operated a price beating guarantee. They believed the evidence provided showed that customers could save at least 90% more than 10% of the time. They said that customers would have saved at least 90% in 31% of the scenarios surveyed as part of the mystery shopping exercise.
3. TransferWise believed the claims were verified, by way of the text in the pop-up box when the consumer clicked on the 'SEE HOW' button located directly underneath the calculator.
Assessment
1. Upheld
The ASA considered the claim "You're saving £xx" was an absolute claim and consumers would interpret it to mean they would save exactly the amount shown. We also considered that impression was enhanced due to the presentation of the claim in the currency converter calculator and the fact that the results varied according to the amount and currencies inputted into the calculator.
We considered the results of the mystery shopping exercise. We noted that for a transfer of £1,000 into Euros, the average saving was almost 90%. However, we noted that for all of the other transfers, except two, the average savings were less than 90%. We understood that TransferWise extrapolated the 90% saving (derived from the £1,000 into Euros scenario) to all other transfers, whatever the currencies and amounts involved, and we considered that the savings shown in the calculator were therefore artificial and based on a different scenario, rather than the actual saving a consumer would achieve for that transaction.
Because consumers would not achieve a saving of exactly the amount shown, we considered that the claim "You're saving £xx" had not been substantiated and we concluded that it 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),
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),
3.33
3.33
Marketing communications that include a comparison with an identifiable competitor must not mislead, or be likely to mislead, the consumer about either the advertised product or the competing product.
(Comparisons with identifiable competitors) and
3.39
3.39
Marketing communications that include a price comparison must make the basis of the comparison clear.
CAP has published a Help Note on Retailers' Price Comparisons and a Help Note on Lowest Price Claims and Price Promises.
(Price comparisons).
2. Upheld
We considered that the claim "save up to 90%" was a conditional claim and that given the text "The clever way to beat bank fees" consumers would interpret it to mean they would always save with TransferWise compared to banks, and in some circumstances those savings would be 90%. We considered that at least 10% of the product or service offered should generally be available with the advertised saving (in this case 90%), where an "up to" claim was made.
We noted that in three scenarios in the mystery shopping exercise, where £1,000 was transferred into Euros, US Dollars or Australian Dollars, an average saving of approximately 90% was achieved with TransferWise compared to the selected banks and that in the other scenarios more modest average savings were achieved. However, we noted that the currency calculator listed 16 different ‘sending’ currencies and 36 different ‘receiving’ currencies and allowed consumers to input currency amounts for every possible combination of currencies, with each one listing a "You'll save" amount. We considered that consumers were likely to interpret the calculator to mean they could transfer money across any of the currency routes listed, whereas data had only been provided in relation to six, which were, according to TransferWise, the most popular transfer routes. We considered that a survey of six transfer routes, even if they were the most popular, was insufficient substantiation for the claim because there were other transfer routes which had not been taken into account.
We also noted that data had only been collected in respect of three currency amounts for each of the six transfer routes: £1,000, £5,000 and £10,000. We noted TransferWise's comment that approximately 99% of all transfers were up to £10,000. However, we considered that different currency amounts, whether higher or lower than £10,000, were likely to achieve different savings and the mystery shopping exercise was limited to three currency amounts. We therefore considered that the evidence provided did not show that 10% of all transfers offered would achieve the maximum claimed saving of 90%.
Furthermore, we noted that some banks had not been included in the mystery shopping exercise. Although we noted TransferWise's comment, that over 90% of the UK GBP market was surveyed, we considered that to be able to substantiate the claim, all banks offering comparable services should have been surveyed.
For those reasons, we considered the evidence provided did not adequately substantiate the claim "save up to 90%" against banks and we concluded that it 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),
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),
3.33
3.33
Marketing communications that include a comparison with an identifiable competitor must not mislead, or be likely to mislead, the consumer about either the advertised product or the competing product.
(Comparisons with identifiable competitors) and
3.39
3.39
Marketing communications that include a price comparison must make the basis of the comparison clear.
CAP has published a Help Note on Retailers' Price Comparisons and a Help Note on Lowest Price Claims and Price Promises.
(Price comparisons).
3. Upheld
We considered that the claims would be understood as a comparison between TransferWise and banks (many of which were well-known businesses), and they therefore constituted a comparison with identifiable competitors. The CAP Code required that comparisons with identifiable competitors were verifiable. We noted that the ad did not contain any information, or a signpost to information, which would allow consumers to understand and check the validity of the claims. Although the text in the pop-up box provided some figures for TransferWise and the 'Average Bank', it did not provide sufficient detail about the basis of the comparison, including the identity of the competitors, the currency transfer routes compared and the currency amounts compared in the mystery shopping exercise, for consumers to be able to understand and check the validity of the claims.
Therefore, because the basis of the comparison could not be verified, we concluded that the ad breached the Code.
On that point, the ad breached CAP Code (Edition 12) rule 3.35 3.35 They must objectively compare one or more material, relevant, verifiable and representative feature of those products, which may include price. (Comparisons with identifiable competitors).
Action
The ad must not appear again in its current form. We told TransferWise Ltd not to make comparative savings claims against banks unless they held adequate substantiation for them and to ensure in future that any such claims were verifiable.
