Wednesday, March 11, 2015


Dear Consumers,
         It’s amazing how many top South African companies use the words “up to” when promoting their products or services. This is particularly prevalent among firms like Discovery; Momentum and various banks that have extensive rewards programmes.   
         Say an insurance company advertises that it will give you back “up to” 50% of the total of the premiums you have paid after two years. What would that mean to you?
         My interpretation would be that they could be giving you a lot less than 50%, but the figure sounds impressive and it makes the claim correct for any amount from just over 0% to 50%.
         A high percentage is a bait to get customers on the hook when the truth of the offer is so variable that it can be extremely suspect. That’s my belief.
         However in a confusing part of its Code of Conduct the Advertising Standards Authority of South Africa (ASA) says this type of advertising should not be used, but only if certain obscure conditions apply.
         Clause 4.5 states: “Claims, whether as to price or performance, which use formulas such as ‘up to 10 kilometres per liter’ or ‘prices from as low as R5’ are not acceptable where there is a likelihood of the consumer being misled as to the availability of the benefits offered. Such claims should not be used.”
          In Clause 4.5.1 it adds that this should only apply “where the price or other advantage claimed bears no relation to the prevailing level of prices or benefits, and in particular where it does not apply to the goods or services actually advertised or to more than an insignificant proportion of them.”
         My question is: “How is anybody who sees this kind of adverting supposed to know what this last clause means exactly?” 
         The ASA’s view is that it’s up to the customer or client to find out by looking at the firm’s Terms and Conditions – a curse of modern advertising. But I doubt that there is any company website that explains the ramifications of this at all, let alone clearly.
         About four years ago Capitec, one of South Africa’s youngest and most innovative banks tore up its Terms and Conditions (See “Brilliant Trail Blazer’s new Consumer Standard”). Unfortunately there is no sign of other businesses following suit.
         After my admittedly rather short investigation my guess is that the Discovery Group uses “up to” with at least one “as much as 14%” as a variation possibly more than anybody else.
         On its website for the five arms of its empire that extends to Medical Aid, Life and Short Term Insurance, Credit Cards and the Vitality Wellness Awards scheme these two words are mentioned “up to 300%” of the time, or is it “up to 60%” or “up to 30%”?
       Any of these could be right because they cover such a wide guess.
         Discovery also uses them in its Television advertising and possibly elsewhere.


         Here are some samples of the many examples and at least one variation that you can find on the Group’s website. The * comments are mine.

Medical Aid: “Our plan contributions are as much as 14% lower than those of all South Africa’s medical schemes.” * Does this mean 0.1% lower, 10% lower or what?
“Executive Plan: Guaranteed full cover in hospital for specialists on payment arrangement and up to 300% of the Discover Health rate for other specialists.”
There are various other “up to” percentages for less costly plans.

Life Insurance: “Up to 60% of your premiums can be paid back to you depending on how well you manage your health.
“Receive up to 28% off your premiums up front.
“Up to 30% of you premiums back every year.”
Various “up to” percentage discounts are given if you have the other services provided by the group. * So it’s up to you to sign up for as many as possible to get a percentage of that juicy carrot that may or may not be much more than a pittance.

Short Term Insurance: “Up to 50% back on your BP fuel spend each month for driving well.”
Another version given is, “Get up to R800 of your fuel spend back each month.”
* This implies that you get money back wherever you buy your fuel, not just at a BP station.

Vitality: “Get up to 25% cash back on HealthFood items at Pick n Pay or Woolworths.
“Get up to 25% cash back on HealthGear at Sportsman’s Warehouse and Total Sports.” * Is this a lucky dip? Does it mean that today you could get say a 3% discount, tomorrow 8% and perhaps very occasionally when the stores want to get rid of excess stock 25%? Why is this so vague? Surely there should be a definite percentage discount if there is one.
“Save up to 80% on monthly gym fees at Virgin Active or Planet Fitness.”

I emailed the above to Adrian Gore, Discovery’s founder and Group Chief Executive and invited him to comment if he wished. I was told he had seen it although he was in London. The job of replying then tumbled down the ranks from Hylton Kallner, the Chief Marketing Officer who is also a director to Rene Vosloo, Head of Corporate Communication and Media Relations.

According to her I had got it all wrong if I thought Discovery had done anything amiss, so you readers will have to be the judge.
This is what she told me: “At Discovery we take our commitment to our clients and our abidance of the ASA Code of Conduct very seriously. Discovery doesn’t utilise the phase ‘up to’ unless our clients can and do obtain the values quoted under reasonable scenarios – for certain of the products quoted, clients receiving less than the benefits listed are in the minority (*by giving “up to” percentages no specific benefits are given), with the majority of clients in fact obtaining maximum ‘up to’ benefit. This is in line with our own principles of fairness and honesty as well as the FSB’s (Financial Services Board) Treat Customers Fairly legislative framework under which our products operate and are regulated.
“We are therefore confident and comfortable that all our material is developed within the ASA Code of Conduct.”
The FSB lists six requirements as part of its Treat Customers Fairly code. One of these is that: “Customers are provided with clear information and kept appropriately informed before, during and after front of sale.”
*But how clear is any “up to” a certain percentage at the “before” stage?
         One of the largest financial groups in South Africa MMI Holdings, more commonly known as Momentum is in a similar, if not quite as extensive an area of business as Discovery. It’s into Medical Aid, Life and Short term insurance; Fitness Promotion as well as Investments.
         The Proteas Cricket team is covered by Momentum Health.
         I don’t know which one, out of these two groups, first started this “up to” marketing, but Momentum’s is remarkably similar to Discovery’s.
         My guess it that there is an “up to” 100 chance that Discovery started it but then again the probability is “up to” 100% that Momentum got in first.
         On its website and in a Television advertising campaign during the World Cup cricket on DSTV Momentum tells us: “Get up to 60% off your Momentum life insurance; up to R5 400 paid into your Health Saver Account; join Virgin Active or Planet Fitness gyms for R99 and save up to 80% of your membership fees; up to 20% off your golf and cycling equipment at The Pro Shop or Cycle Lab and up to 50% off Mango flights.”
         Unlike Discovery Momentum does not state specifically that it abides by the ASA Code of Conduct but its Group Chief Executive Nicolaas Kruger had this to say in his introduction to the firm’s Code of Ethics.
         “Momentum is committed to do what is right, fair, reasonable and lawful.”
         There’s a heading entitled Speak Up, which could apply to me. It says: “We encourage people to speak up against any breach of our values and standards and have zero tolerance policy on retaliation as it is our belief that speaking up is always the right thing to do.”
When I asked Nicolaas Kruger Momentum’s Group CEO for his view he passed the job to Zureida Ebrahim the CEO, Client Engagement Solutions who replied on the letterhead of Momentum Multiply, which is its wellness and rewards scheme.
         She maintained that “client-centricity” was the heart of their business and they “demonstrated this in the ease and transparency in which our clients can take advantage of the various levels of benefits (hence the use of ‘Up to…’) available to them.”  *It’s hard to fathom how ‘up to’ percentages can be at all transparent. I would say they are the complete opposite to this. They hide the true picture.
         Zureida went on to say: “As the conditions of the ‘Up to …’ offer cannot be contained in the limited space of an advertisement, all our advertisements provide a website address where clients can view the terms and conditions of the offer.
         “Our sales process also provides a further opportunity for clients to gain more information on how the programme works as well as the benefits available to members.”

         She included a ruling made by the ASA in 2012 when somebody had evidently complained about the use of “up to” in ads. So I am not the only person who thinks this kind of advertising should not be allowed.
         Below is the ASA’s complicated ruling that “up to” ads are perfectly okay.

         Well I bet that if a survey was done there is "up to"a 90% chance that the majority of people would think this is certainly not alright.
         Based on my experience of the ASA’s decisions the chances are “up to” 100% that this decision was taken to appease all those companies that would have to go to considerable expense if they were ordered to change their “up to” ads to something more plausible.
         The ASA claims to be an impartial, independent body set up by the marketing and communications industry to ensure that its system for self-regulation works in the public interest.
         Only the industry knows how it can impartially enforce its Coded of Conduct when it is regulating itself. It’s like appointing your own judge at your trial.
         It’s dubious impartiality and bias towards big business was glaringly exposed in the way it dealt with various complaints that I made, the results of which you can read on my blog.
         Yours faithfully,
         Jon, your Consumer Watchdog, who does his best to get big business to come to heel.

P.S. I will be sending the link to this post to Leon Grobler, the ASA’s Manager Dispute Resolutions just in case he might one day say he knew nothing about what the advertising industry has really been “up to.”

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