GetChip - false advertising?

flaneurs_lobster

No

grumbler said:

flaneurs_lobster said:

grumbler said:

flaneurs_lobster said:

Whether the "value" of this "investment" is greater is a completely different question. 

Value of the prize?

And if it's wrong, then why, e.g., shops were forced to display prices per kg/L/... together with the price per item?

As I said, the rules are imposed by regulators, and I don't expect much from ASA.

Unit pricing is a completely different matter. That would only be relevant if we were discussing the cost of buying the same thing and how it was priced.

It's different only because it's some different regulation and, possibly, some different regulator.

Essentially, say, buying a 10% chance of winning £1 (once or every month) isn't different from buying a kilo of sugar.

Agreed that buying sugar is the same as buying a chance of winning £1 (?) although you would need to know the worth of the thing being purchased.

But Chip's proffer makes no mention of the size of the prize(s), only that your chance of winning is greater than PBs, hence not misleading.

grumbler

Yes

I wonder how true their "4x" figure is and whether they ever adjust it.

The number and the value of their prizes is fixed, but the number of 'entries' depends on the number and the value of qualifying deposits.

Johnjdc

Yes

NS&I should just announce that every bond will be guaranteed a win of at least 0.01p per month, and put out an advert saying the chances of winning are now 4000 times better than with Chip. Same logic, right?

flaneurs_lobster

No

Johnjdc said:

NS&I should just announce that every bond will be guaranteed a win of at least 0.01p per month, and put out an advert saying the chances of winning are now 4000 times better than with Chip. Same logic, right?

Correct .

eskbanker

To be pedantic, it's false in terms of (slightly) misrepresenting the PB odds, which were 24,500 to one in September 2022, but have been 24,000 to one in the five draws since then....

Malthusian

Yes, it's false advertising. To continue the "unit price" comparison, it's like saying that your chicken is twice as cheap as Sainsbury's and displaying a packet of Sainsbury's chicken which is twice the size of yours.
A competent regulator looks through this kind of sophistry and would base their ruling on what a consumer would most likely believe after reading the advert. In this case the consumer is clearly meant to think that they will win 4 times as much with Chip, which is false.

eskbanker

Malthusian said:

In this case the consumer is clearly meant to think that they will win 4 times as much with Chip, which is false.

That's a bit misleading too, in that 'winning 4 times as much' would normally signify the value of prizes rather than the frequency of winning, and Chip's claim only relates to the latter, being silent on returns!

flaneurs_lobster

No

Malthusian said:

Yes, it's false advertising. To continue the "unit price" comparison, it's like saying that your chicken is twice as cheap as Sainsbury's and displaying a packet of Sainsbury's chicken which is twice the size of yours.
A competent regulator looks through this kind of sophistry and would base their ruling on what a consumer would most likely believe after reading the advert. In this case the consumer is clearly meant to think that they will win 4 times as much with Chip, which is false.

Is it the same hypothetical consumer who is purchasing chicken the same consumer who is purchasing a financial product? 

I would assert that comparing the purchase of sugar and chickens (and the advertising of the pricing of these products) is not comparable to the purchase of a chance of winning a prize in a draw.

I wish to win a prize. For a single entry, which of Chip or Premium Bonds gives me the greater chance of winning it?

(I know about minimum holdings of PBs and it's not relevant). 

Johnjdc

Yes

flaneurs_lobster said:

Malthusian said:

Yes, it's false advertising. To continue the "unit price" comparison, it's like saying that your chicken is twice as cheap as Sainsbury's and displaying a packet of Sainsbury's chicken which is twice the size of yours.
A competent regulator looks through this kind of sophistry and would base their ruling on what a consumer would most likely believe after reading the advert. In this case the consumer is clearly meant to think that they will win 4 times as much with Chip, which is false.

Is it the same hypothetical consumer who is purchasing chicken the same consumer who is purchasing a financial product? 

I would assert that comparing the purchase of sugar and chickens (and the advertising of the pricing of these products) is not comparable to the purchase of a chance of winning a prize in a draw.

I wish to win a prize. For a single entry, which of Chip or Premium Bonds gives me the greater chance of winning it?

(I know about minimum holdings of PBs and it's not relevant). 

Why is "for a single entry" relevant if the cost of that entry isn't the same?

That's nothing to do with minimum holdings, it's to do with how the tickets are split.

If you buy £1000 worth of PBs and £1000 of Chip savings, the answer to which gives you the greater chance is: PBs.

If you buy £10000 of Chip savings and £1000 of PBs, the answer is Chip.

The question is, would a consumer interpret the advert as meaning "for the same amount of savings".

I think yes they almost certainly would, in which case it's false advertising.

Malthusian

eskbanker said:

That's a bit misleading too, in that 'winning 4 times as much' would normally signify the value of prizes rather than the frequency of winning, and Chip's claim only relates to the latter, being silent on returns!

Exactly. Nobody cares about anything other than the returns. The fact that Chip are being silent on them is the entire problem.
Why does Chip tell consumers that they are "4x more likely to win" even though, as others have pointed out, this tells you absolutely nothing?
1) Chip knows that all consumers love mathematical puzzles and will enjoy the process of researching both Premium Bonds and Chip prize accounts to find out how much a "ticket" is, then working out which product actually has a higher payout ratio
2) Chip knows that most consumers don't understand any of that and will just assume that "4x more likely to win = I will win 4x as much". If anyone complains they can fall back on "well it's technically correct so there".
Exploiting consumer ignorance is the definition of misleading advertising. The idea that consumers deserve to have their ignorance exploited is why we all have to pay for regulators.
When selling financial products, consumers should be given the information that is relevant to them, like APR for a credit card. This is the equivalent of telling people that your credit card is better because "our interest rate is half that of our rivals", and only putting in the small print that the interest rate is applied over six months rather than a year.