In particular they are looking into whether estimates in auction catalogues are misleading as they fail to either state or include the buyer’s premium alongside the guide price.
They are currently consulting with auctioneering bodies to gather industry views before deciding how to proceed. If they deem that current practices are in breach of UK advertising rules, the new guidance could lead to wholesale changes to the way auctioneers display their charges.
At the moment most auctioneers state their premium levels and other charges in the Terms and Conditions section at the back of their catalogues. ATG understands that the options being examined include whether the buyer’s premium percentages should be stated alongside the estimate for every individual lot.
The ASA began the project earlier this month following a complaint they received about “misleading auctioneer premium rates”.
“In the past year we only received one complaint,” said an ASA spokesman, “but we decided to be proactive and see if further work needed to be done in this sector which we hope our discussions with industry will tell us.”
The ASA has yet to make a public announcement about the investigation and the spokesman stressed to ATG that the work was still at a very early stage.
“Currently we are only at the stage of speaking to trade associations about this issue and nothing has been finalised. Certainly no ‘approach’ has been favoured. We also have not established what the outcome of our work will be yet as we still need to have many more conversations to define the scope of our work. However, it is likely we will publish guidance for the sector to help them stick within the advertising rules.”
The key factor to be determined in the investigation is whether the current way auction estimates are displayed meets the requirements of the CAP Code (the UK’s code of non-broadcast advertising). The code states that any quoted prices “must include non-optional taxes, duties, fees and charges that apply to all or most buyers”.
In theory, therefore, both VAT and auctioneers’ other charges (such as administration or insurance fees) might also need to be incorporated in the display of estimated prices.
The ASA investigation will likely be welcomed by many long-term critics of what they see as auctioneers’ less-than-transparent display of their charges. However, auctioneers themselves may well worry about practical implications to cataloguing and pitching estimates as well as, crucially, the effects any changes could have on bidding levels.
One precedent for the ASA is their previous project into ticket sales where they considered that, under CAP rules, booking fees should be included in the headline price for tickets, rather than as a separate fee added further on in the booking process.
However, it remains unclear whether the fact than an estimate is a guide rather than actual price will have any bearing on the issue.