Irresponsible Advertising
Eva Smith (Attorney) @ Lucid Living
“I badly wanted to buy a new bedroom set,” says Janie*, a thirty-year-old administrative assistant, “But I didn’t have the cash. Then I saw this ad, saying that I only had to pay R200 a month for 36 months, and the bedroom set could be mine.”
Like so many of us, Janie discovered that there were a many hidden costs when she actually went to the shop. “I had to pay delivery fees, and insurance, and a deposit,” she says. “And when I did my sums, I realised that I was paying about R 7000 for a set that only cost R2500 to start with. I felt like a real fool.”
Experts in advertising law have one important piece of advice for consumers: If it sounds too good to be true, it probably is.
For Lebo*, a newly qualified accountant, the ad that caught him out was for a car. “I’d just started working, and my friends all expected that now I would drive a fancy car. But actually, I wasn’t making that much money. When I saw an ad for the car of my dreams for only R 850 a month, I thought that Christmas had come.”
Lebo discovered that he would have to pay a 25% deposit, and that at the end of the payment term of 5 years, he’d still owe another 30% of the value of the car. “I decided to stick with taxis till I had more money,” laughs Lebo, “Because that car ad was just a big lie.”
The Advertising Standards Authority of South Africa (ASA) gets many complaints from people like Lebo and Janie. This organisation has the power to stop advertising that is not telling consumers the truth.
Here are some of the rules that advertisers need to keep in terms of credit agreements:
• In terms of the National Credit Act, ads for monthly instalments must tell you the instalment amount, how many instalments are due, the total amount owing including ALL hidden costs, the interest rate, and any residual or final payment.
• The ASA does not allow ads that don’t reveal all the unusual terms, and have specific rules about different industries.
But then why do we still see this type of advertising?
The ASA can only act when someone complains to them, so consumers need to act when they see a misleading ad. The details of the ASA are complaint@asasa.org.za or fax 011 781 1616. They need the complaint to be in writing, but you can phone to get an optional form from 011 781 2006.
The National Credit Regulator (NCR) can theoretically act against businesses that break the rules without a complaint. However, it is a good idea to let them know who these are. You can email the NCR on info@ncr.org.za or phone them toll free on 0860 627 627.
What will happen?
If the ASA finds that your complaint is valid, they will order the advertiser to fix their advertising. If the advertiser fails to do so, the ASA has other sanctions. It can order an advertiser to have all its advertising pre-checked for a fixed period, or it can order that the advertiser pay for an apology statement. In extreme cases, where the advertiser refuses to pay for this statement, the ASA will tell the media not to accept ANY advertising from a particular advertiser.
The NCR can fine a business up to R 1000 000 if they are found to be in breach of the Act.
Discussion blog:
What advertising have you seen that you think is harmful to consumers?
