February 27, 2017

The Committee of Advertising Practice has released an advice note following a series of ASA rulings against misleading advertising claims by six pay-per-bid auction websites, which followed an investigation into potentially unfair practices across this sector.  In the note, CAP offers advice to make marketers aware of the potential pitfalls across this sector.  It suggests that marketers should hold robust evidence for savings claims and that price claims, such as those for “sold” items, should include the cost of bids and shipping fees as they should be based on the full price paid by the successful bidders.

CAP also advises marketers to ensure that details of how the website works are made clear to users before they commit to signing up.  For example, it should be clear that there is a cost attached to making each bid and the cost of credit packages that consumers have to buy to participate should be visible before registration.  If there is a direct debit auto-top-up or any other significant conditions, these should also be stated prominently.

The ASA ruled on six pay-per-bid auction sites, also known as penny auctions, namely Madbid, Swoggi, LikleBid, Fastbidding, Bidwizeu and BidBid.  All were found to have misled consumers because they did not make clear any material information about the cost of individual bids and bid packages to consumers before they registered for an account.  The ASA also found that the “sold” prices displayed were misleading because they did not include either the cost of bids or the shipping costs, which were often greater than the “sold” prices.  The ASA concluded that malpractice across the sector resulted in “exaggerated claims, especially in relation to RRPs, savings claims and ‘sold’ prices for auctioned items”.  To read the CAP advice note Time runs out for misleading pay-per-bid auction websites and for links to the ASA rulings click here.  To read the ASA’s summary of its investigation and rulings click here.