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Advertiser: Meridian Motors Limited
Medium: Internet (Company Website)
ASAI Code 6th Edition: 1.6(c), 2.22, 2.24, 2.41, 2.42
Two advertisements on the advertisers’ website referred to the following:
The first advertisement for a 2014 BMW X5 offered the following information:
Under the heading “Additional Information” an in-depth description of the car was provided.
The second advertisement for a 2014 BMW X5 offered the following information:
Once again under the heading “Additional Information” an in-depth description of the car was provided.
The complainants in both cases were informed that they would have to add 23% VAT to the price as it was not included in the advertised price. The complainants considered both advertisements to be misleading.
The advertisers said that they sold commercial and non-commercial registered vehicles to their large client base and had been doing so successfully for over 10 years. They said that in relation to the vehicles mentioned by the complainants their client base could have been:
• Commercial businesses that purchase vehicles for business use.
• Commercial businesses that purchase vehicles for the use of directors/staff (commercially purchased, privately taxed).
• Private individuals.
The advertisers said that the vehicles in question could have been sold to any of the three groups mentioned above. Had a business/sole trader/VAT registered entity wished to purchase the vehicle referenced in the first advertisement it would have cost them €61,000. To a private individual, with no VAT number, the cost would be €61,000+VAT.
They considered that in this case when the price of the vehicle was being loaded onto the website it should have referenced the fact that the cost was €61,000+VAT, since receiving the complaint the text on the website had been amended to reflect the fact that VAT was applicable to the price.
The Secretariat pointed out to the advertisers that Section 2.42 of the Code referred to the fact that “Except in marketing communications addressed primarily to the trade, prices quoted should normally include VAT and other taxes, duties or inescapable costs to the consumer.” It was not acceptable to advertise a vehicle to a consumer without including the cost of the VAT in the overall price.
The advertisers said that Section 2.42 of the Code did not allow the level of flexibility they needed and were they to enforce it in a narrow manner this would impact on their ability to attract business.
The Secretariat pointed out to the advertisers that the Code had been in existence for over 30 years and that Section 2.42 had never given rise to any significant concerns. They suggested to the advertisers that they quote both the VAT exclusive price – clearly stating that it was VAT exclusive and the VAT inclusive price - stating that it was VAT inclusive.
The Complaints Committee considered the details of the complaints and the advertisers’ response. The Committee considered that unless advertising was directed primarily to the trade, prices should be quoted on a VAT-inclusive basis. Where the advertising was directed to a mixed audience, as indicated by the advertisers, they could also if they wished give the VAT-exclusive price, provided it was clear that it was VAT-exclusive, and provided that the VAT-inclusive price was the more prominently stated price.
The Committee considered that the advertising was in breach of Sections 2.22, 2.24 and 2.42 of the Code.
The advertising should be amended in accordance with the advice indicated above in compliance with Section 2.42 of the Code.