Will your advertising get you into trouble?

Businesses should be aware that making misleading claims in their advertising is illegal.  The High Court has recently confirmed that the Advertising Standards Authority (ASA) was entitled to find that a company had breached the British Code of Advertising for misleading advertising. Losing that litigation will have done more damage than changing the adverts.

Coys of Kensington advertised that “Coys showrooms have been synonymous with fine and elegant motor cars since the company first opened in 1919” and used adverts saying “Coys Founded 1919 London”.

In fact Coys of Kensington Automobiles Ltd was only incorporated in January 2003 and did not begin trading until 2004.  Before that the company had a chequered trading history that included several liquidations and had operated in various corporate guises.  The ASA considered that the adverts would be understood by consumers to mean that they were financially stable.  That was important in the second hand car market which was notoriously unstable.  It told Coys to stop using the adverts.  Coys went to court and lost – which will have been expensive and also created negative publicity.

The complaint to the ASA was made by an aggrieved creditor of a previous incarnation of Coys which had gone into liquidation owing £1.7m.  Coys of Kensington Automobiles Ltd had bought the assets and goodwill and continued with virtually the same individuals and premises.

It is also of interest that the High Court dismissed the argument that a previous incarnation Coys had successfully defended a claim for Misrepresentation for using “Founded 1919” in an auction catalogue.

The morals?

If you are doing business with companies that present themselves as having an impressive history don’t take it at face value.

If you leave aggrieved customers and suppliers be careful what you say as they may go to great lengths to get back at you.

Contact Neil Howlett