Consider the impact of selling the business on longevity claims
Business and brand longevity claims such as "established since" and "founded in" are often hotly contested and scrutinised by competitors. A company website claim that it had been founded in 2001 was challenged by a competitor on the basis that a third party had acquired the right to use the brand. The complainant also flagged Trustpilot reviews and customer numbers claims. The ASA looked into the deal and noted that rather than purchasing Victoria Plum as a ‘going concern’, AHK Designs purchased a pre-pack sale of VPL’s business and certain assets, which included the intellectual property rights and the “goodwill in the business”.
The ASA considered that the claims regarding Victoria Plum’s longevity would have an impact on consumer confidence and expectation, and because it had actually gone into administration and previous consumer orders had not been fulfilled, the ASA considered that the impression created by the claims, of an ongoing business that had served over 2 million customers and attained an “Excellent” Trustpilot score over the course of an uninterrupted trading history, were misleading. (AHK Designs Ltd, 22 May 2024)
Ads need to be identifiable as such: whether it's an envelope or an insta reel
In what was heralded as a precedent setting ruling, the ASA upheld complaints that various Instagram reels and TikTok posts in relation to the brand TALA by the influencer that owned the brand were not clearly identifiable as advertisements. The brand argued that Grace Beverley was widely synonymous with the business and its branding, which they believed was unusual within the fashion industry. It gave various examples of how it considered the relationship was clear in the ads including the fact the relationship was expressly stated in Ms Beverley's bio. Something that was for a period viewed positively but has been found insufficient in recent years. It's clear this isn't an instance where anyone was attempting to conceal the commercial relationship and most likely felt it self-evident.
The ASA noted that the ads contained some indicators that could have suggested that Ms Beverley had a commercial interest in the TALA brand, for example, she often spoke in the first-person plural (“factories we literally had to beg at the door to get into”). However the ads were several minutes long and those references were made part-way through, so a user was required to engage with the ads before they heard them, which was too late for them to be obviously identifiable. Using the co-publishing feature on Instagram would not necessarily be understood by consumers as indicating a commercial relationship. The reference to the brand account handle wasn't sufficient as a label. Although the ASA cannot require a specific label be applied it consistently states in the action section of rulings on this point that identifiers such as “#ad” should be clearly and prominently displayed. (We Are TALA Ltd, 22 May 2024)
Direct mailings must reveal commercial intent
A B2B direct mailing was ruled misleading because it wasn't identifiable as a marketing communication and didn't reveal its commercial intent. It's long established ASA precedent that when it comes to direct mailings it needs to be clear from the envelope itself. The ASA considered recipients might expect, from the generic ‘scales of justice’ logo and the text “PRIVATE” and “IMPORTANT INFORMATION” on the front of the envelope, that the information enclosed related to the law in some way and had been sent by a public body. There was some information about the company but not enough to detract from the overall impression and the complaint was upheld. (Avensure Ltd t/a Employment Law Advice Bureau 22 May 2024)
Referring to hangovers could be interpreted as a medical condition
An advertisement for a food supplement product "Hangcure Rebound" and making the claim “No need for crazy remedies anymore“ was found to breach the CAP Code. Claiming to treat a hangover is likely to be seen as a claim to treat an adverse medical condition for which a medicines licence is required. Foods cannot claim to treat, prevent or cure disease. In this instance the claim was strongly implied in the ad and then made explicit in the hashtags, “#hangcure #hangcurerebound #ultimatehangovercure […] #hangover #hangoverremedies”. The ASA didn't accept the advertiser's submission that "Hangcure" was an acronym of its values "honesty, authenticity, non-stop improvement, growth, community, understanding, reliability and ethical". (Hangcure Ltd, 15 May 2024)
Prices and introductory offers must be accurate
A storage company's website claimed "Get 50% off your storage for up to 8 weeks" and "The prices you see above are the prices you pay, No Hidden Fees." A customer complained to the ASA after the the weekly price of their storage unit was increased beyond the quoted price. The advertisement was ruled misleading because it did not clearly state that prices could increase after the introductory offer period. The fact the potential increase was stated in the T&Cs was not sufficient as customers need to have key information relating to offers upfront. (Pink Self Storage Ltd 22 May 2024)
Terms and conditions must be clear
The ASA doesn't cover product labels unless they are included as a pack-shot within an ad or feature a sales promotion. In this instance an alcohol brand advertised a promotion to win one of five pizza ovens via a label wound around the neck of a bottle of wine. Key conditions need to be included in the ad and it's rare that consumers won't need to have information about how to participate or when the closing date is.
The advertiser hadn't set a closing date, except that it would run the draw 14 days after the last bottle of wine was sold and also required that entrants retained proof of purchase but didn't tell them. Given consumers had no way of knowing when the last bottle of wine was sold to calculate the closing date, the ad was ruled misleading for omitting significant conditions. Whilst a QR Code or signpost to a website with full T&Cs might be acceptable from the point of view of providing the full T&Cs it's not sufficient to replace the need for significant terms to be made clear. The CAP Code lists all significant terms and conditions in rule 8.17, which serves as a handy checklist for key information available to consumers. (Kingsland Drinks Ltd, 22 May 2024)
How to mitigate these risks
- Consider the impact of a change of hands on brand claims, and company "good will" as part of due diligence
- Remember referring to a medical condition is restricted to certain products
- Make the commercial intent clear
- Include significant terms and conditions in advertising
- Call your friendly neighbourhood advertising and consumer products lawyer to get help with the above
