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Retirement homes specialist Pegasus Homes has issued an apology after the Advertising Standards Authority (ASA) ruled that an advert for retirement properties was misleading and featured terms and conditions that were hard to understand.
A national newspaper ad published on 27 April 2024 for Pegasus Homes, a retirement property company, included text that stated, “Try before you buy with Pegasus Rent-to-Buy Experience the joy of a new Pegasus later living home, without the wait”.
Further text stated, “Once you’re ready Purchase within 12 months and get 9 months [sic] rent back* or Receive 5% off the asking price”. Small text at the bottom of the ad stated, “Terms and Conditions apply. Offers are available on selected apartments only. *The rent-to-buy tenancy must start by 30th June 2024 and your rental cashback will be refunded on purchase completion […]”.
The ASA challenged whether the conditions of the promotion had been made sufficiently clear.
Eventually, the advertising watchdog concluded that all marketing communications or other material referring to promotions must communicate all applicable significant conditions or information where the omission of such conditions or information was likely to mislead, including a prominent closing date if applicable.
The ASA considered consumers would understand from the claim “Once you’re ready Purchase within 12 months and get 9 months [sic] rent back* or Receive 5% off the asking price” to mean that if they rented a Pegasus Homes property for up to 12 months and bought that property within that time, they could either receive a refund of nine months’ rent or a 5% discount against the asking price of the property.
The ASA understood that to be eligible to receive a refund of nine months’ rent, consumers had to have started their rental tenancy by 30 June 2024.
The ASA acknowledged that the ad stated, “The rent-to-buy tenancy must start by 30th June 2024”. However, they considered that this wording appeared in very small text in the bottom right-hand corner of the ad, and therefore it could be overlooked. We considered that the duration of the promotional period and the speed at which it was necessary to start the rental tenancy was information likely to influence consumers’ understanding of, and decisions about, the promotion. They were therefore significant conditions which should have been stated prominently in the ad.
‘Additionally, because the asterisk that linked to that wording was alongside the claim that related to receiving nine months’ rent back, and not the claim about receiving 5% off the asking price, which came after it, it was therefore ambiguous as to whether the terms and conditions, including the closing date, specified in the small text applied to the latter part of the promotion.
The ASA acknowledged that the small text stated, “Terms and Conditions apply. Offers are available on selected apartments only […] Please speak to our sales team” alongside a QR code, website and telephone number. Notwithstanding that, we considered the text was small and could be overlooked, we understood that the QR code and website were not specific to where the terms and conditions could be found. We had not seen the full terms and conditions of the promotion.
The ASA understood that to be eligible for the rent refund, consumers had to instruct a solicitor (from Pegasus Homes’ approved panel) before month nine of their rental tenancy, have completed on the sale of the property by month 12, and put down a 10% deposit at exchange of contract. We considered those were significant conditions which were likely to affect consumers’ understanding of the promotion and their decision to participate. We therefore considered the omission of significant conditions from the ad was likely to mislead.
The ASA concluded that because the ad had omitted significant conditions, including a prominent closing date, the promotion breached the Code. The ad breached CAP Code (Edition 12) rules 8.17, 8.17.1, 8.17.4 and 8.17.4.a (Promotional marketing).
A spokesperson from Pegasus Homes told EYE: “We respect the ASA’s decision and a number of actions have been taken immediately to ensure this doesn’t happen again.
“Whilst we are disappointed with this decision, we would never want to mislead or misinform our valued customers and so we are taking this matter very seriously. Since these points were brought to our attention, we have undertaken extensive training from the ASA on the technicalities of the CAP Code, we have created a new and improved web page that has all of the terms and conditions for every promotion clearly detailed and a QR code on every advert directing customers to this, as well as ensuring that the message of our adverts are clear and all terms are clearly stated.
“We apologise for any confusion our marketing materials may have had on our customers or the general public, we always strive to be as transparent as possible to demonstrate the clear benefits that living within our communities brings our residents.”
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