Lying about discounts

Pat38493

Does anyone know, is it technically illegal and potentially fraud, for sales people to tell lies about discounts in order to secure contract.


For example, if a salesperson tells you that there is a 20% discount which is only available today if you sign up right now, but you find out later that they say the same or very similar to everybody on every day, isn't that technically fraud?


Likewise, if they advertise a 60% discount on prices, but then you later find out that their so called list prices are simply 60% higher than everywhere else, and so ridiculously high that they cannot be real prices at all, isn't that also fraud?


I have obviously seen this type of tactic many times and assumed it was just blarney, but I happened to be reading the trading standards website and it looked to me like it fits under their definition of fraud.


cheers
p

bod1467

The 20% today only claim is (I believe) "enticement" and you may be able to rescind the contract/return the purchase on that basis. (Not 100% sure though).

The 60% discount is a common marketing tool, but is subject to some advertising standards guidelines. As long as they have published pricing that matches the "high" price then they can offer the 60% discount if they wish. Many business sectors use this technique, such as double glazing. (I'm looking at YOU Anglian Windows - your 80% discounted price was still higher than the fixed price of two local firms I checked with).

Subject to the guidelines I mentioned, there is nothing wrong with using that sales technique. (Other than it is obviously a technique, most people can see through it, and some people [like me] will actively NOT go with a company using that technique).

bris

The first is unfair practice but if they say it to you that it is only available for 1 day if you don't sign up then refuse it the next day that would be legal.

As for the 60% higher that is normal for all companies and they are free to set their own rrp.

All the kitchen and furniture retailers have been using this practice for years. the law isn't stopping them so we will see these fake half price sales for years to come.

InsideInsurance

Laws vary depending on where the negotiations are happening. If you go into their store then your protection is much less than if they come into your home

The rules on discounts is fairly complex and fairly weak. If they say they have reduced their price by 60% then they need to be able to demonstrate that they have met the rules, cant remember them exactly but is basically something like its been sold at that price at some point in the last 90 days in one of their stores. Needless to say it isnt that hard for a chain to put prices up in one small store once every 90 days, take a hit on sales that day there but allow all their other stores to legitimiately keep using strong marketing slogans like 60% off.

MRSP/ RRP are more complex, especially as with many of these types of things the retailer is the manufacturer or they have an "exclusive" model. Generally trading standards claim they use "average selling price" when considering discounters claims however based on all the evidence against TK Maxx, Sports Direct, "discount villages" etc they clearly dont enforce it well.

Ultimately, just be happy with the price you are actually paying rather than buying because of a discount

unholyangel

Covered by unfair trading under banned practices (practices which are unfair in all circumstances and prohibited):

(7) Falsely stating that a product will only be available for
a very limited time, or that it will only be available on
particular terms for a very limited time, in order to elicit an
immediate decision and deprive consumers of sufficient
opportunity or time to make an informed choice.
A trader falsely tells a consumer that prices for new houses
will be increased in 7 days time, in order to pressurise him
into making an immediate decision to buy.

http://www.oft.gov.uk/shared_oft/business_leaflets/cpregs/oft1008.pdf


Just noticed you also said about inflated prices....which should be covered by this:

(18) Passing on materially inaccurate information on market
conditions or on the possibility of finding the product
with the intention of inducing the consumer to acquire
the product at conditions less favourable than normal
market conditions.
An estate agent tells a consumer that he has recently
sold several houses in the same area, just like the one the
consumer is viewing, at a certain price. If this is not true and
he is making the claim in order to persuade the consumer
to buy at an inflated price, the estate agent would breach the
CPRs.

powerful_Rogue

unholyangel wrote: »

Covered by unfair trading under banned practices (practices which are unfair in all circumstances and prohibited):



http://www.oft.gov.uk/shared_oft/business_leaflets/cpregs/oft1008.pdf


Just noticed you also said about inflated prices....which should be covered by this:

I wouldnt have thought your second quote would apply in this situation.

OP seems to be talking about shops offer 80% off etc. As long as the shop has sold the item at the higher price for a certain amount of time they are fine.

Pat38493

"Falsely stating that a product will only be available for
a very limited time, or that it will only be available on
particular terms for a very limited time, in order to elicit an
immediate decision and deprive consumers of sufficient
opportunity or time to make an informed choice."

Thanks for your help all. This particular one is interesting as this has happened to me quite a few times. I'm not sure whether the seller can get around it by keeping changing the exact discounts - i.e. today it's 20% off, tomorrow it's 21% off, Monday it's free 20% worth of extras and so on. To me though this is not fair practice.

frugal_mike

The 'x% Off' are often very silly. I went for a quote from a well known kitchen supplier that had a 60% off sale in the January sales. Picked mostly middle-of-the-road options, and the quote came back at £13,000. If we assume the 60%-off claim then that puts full price upwards of £30,000, which was laughable.

Newbold

The short answer to this is that it depends how big the company making the false claims is.

Amazon, for example, do it all the time with apparent impunity. Tesco also do it all the time - but were caught and fined fairly recently.

Several large supermarket groups use this method to increase sales (with the honourable exceptions of Lidl, Aldi and M&S) but normally they get away with it.

hcb42

every sofa store, carpet store, kitchen store, bathroom store do it - I try and avoid the obvious culprits as I wouldnt trust them an inch