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*Terms & Conditions Apply, if you can find them.
Wednesday, March 11, 2015
IS "UP TO" PERCENTAGE MARKETING OKAY?
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
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 orperformance, 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 “wherethe 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 ofadvertingsupposed to knowwhatthislast clausemeans 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 companywebsite
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 newConsumer 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 “asmuch as 14%”as a variation possibly more than
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%”?
of these could be right because they cover such a wide guess.
Discovery also uses them in its Television
advertising and possibly elsewhere.
FOR INSURING YOUR CAR WITH DISCOVERY
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?
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
given is, “Get up to R800 of your fuel spend back each month.”
implies that you get money back wherever you buy your fuel, not just at a BP
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
“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
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 valuesquoted 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
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 legislativeframework under which our products operate and are
“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 areprovided
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
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
There’s a heading entitled Speak Up, which
could apply to me. It says: “We encourage people to speak up against anybreach 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 andtransparency 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.
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
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
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.
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 “upto”ads to something
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
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.
HOW CAN THAT POSSIBLY BE IN THE PUBLIC INTEREST?
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.
Jon, your Consumer Watchdog, who does
his best to get big business to come
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.”