Wednesday, 21 September 2016

ASA take action after my complaints

Following my complaint to the Advertising Standards Agency a year ago regarding 'Penny Auction' websites the ASA launched a project into the sector. These sites are ripping people off for significant sums of money with promises that are clearly misleading in my view.

The are not auctions. Only the lucky few ever win and the amounts collected by the sites in 'bids' can be 10x the high street sale price. A TechCrunch article (July 26, 2010) on MadBid, one such site, called this model "a license to print money."[2] Other such sites includeBid Budgie and and SWOGGI.

The ASA have concluded that there are indeed "exaggerated claims, especially in relation to RRPs, savings claims and sold prices" which has resulted in the ASA drafting guidance distributed to all Penny Auction sites.

A monitoring exercise by the ASA earlier this year found that "there were still outstanding areas of concerns in marketing across the sector." and that the ASA are initiating "a series of investigations against all the pay-per-bid auction sites that we could identify" with the rulings on breaches of the ASA's Code and guidance notes on the code to be published "on our website later in the year".

I am pleased that the ASA has acted in the manner in response to my complaint. It will be a relief to many that at least this Rip Off Britain industry is having action taking against it.

This contrasts with the Gambling Commission who seem to be receiving a lot of criticism for being out of touch and who on this particular issue when I wrote to them refused to take any action and stating that they believed that penny auction sites were essentially not gambling sites. I tweeted "Gambling Commission says 'Gamified' penny auctions not gambling sites & not their responsibility as bring no harm." You can read the full reply from the Gambling Commission which I published here.

From: Louise Hogan
Date: Wednesday, 21 September 2016 11:05
To: Graham Jones
Subject: Advertising Standards Authority update - penny auction websites

Dear Mr Jones

Last year, you contacted our Chief Executive, Guy Parker, with your concerns about pay-per-bid auction websites for Madbid and Swoggi. In his response, Guy explained that because we felt there was potential for consumer harm and detriment and in line with our strategy to tackle more issues in the round through project work, we had launched a project into the sector. Rather than solely relying on complaints, this allowed us to look at the issues in more depth and on a wider scale. Now that we’re reaching the conclusion of this work, I wanted to update you on the findings so far.

We initially carried out a detailed review of the marketing, including the websites, for Madbid and Swoggi. We also contacted other relevant stakeholders, such as Trading Standards departments and Citizens Advice, to find out more information about any consumer complaints they had received. In conjunction with the complaints we had received directly, this research enabled us to build up a picture of potential Code breaches in the marketing for these companies.

The majority of issues we identified concerned exaggerated claims, especially in relation to RRPs, savings claims and sold prices. We also identified a general need to make clearer to consumers how the service worked and associated costs and to ensure that advertising was clearly differentiated from advertorial.

We contacted both Madbid and Swoggi to discuss the issues, ensure they understood their responsibilities under our Codes and seek assurances that their marketing would be amended to bring it in line with our rules. We also drafted guidance covering the main issues we had identified in the sector (published on the CAP website here) which we sent to all the other pay-per-bid auction websites, requesting them to review their own marketing to ensure it complied with the guidance.

After carrying out a monitoring exercise this year we identified that although some changes had been made, primarily in Madbid’s marketing, there were still outstanding areas of concerns in marketing across the sector. As a result we’ve initiated a series of investigations against all the pay-per-bid auction sites that we could identify. The rulings should appear on our website later in the year.

I hope this information has been helpful. If you have any queries please don’t hesitate to contact me.

Kind regards

Louise Hogan Maroney (Mrs)