There is an old adage that if something sounds too good to be true then it probably is.
While this maxim may not always apply, it did in the Court of Appeal’s recent decision in Godfrey Hirst NZ Limited v Cavalier Bremworth Limited  NZCA 418 where the Court found Cavalier had made a number of misleading statements in advertising product warranties.
Advertisers and marketers should take note.
The case concerned “headline” statements (representations) made by Cavalier on its website and attached to carpet samples promoting warranties from its fibre supplier, Invista, for its “Habitat Collection” of carpets. At issue was whether those representations were misleading or deceptive in the context of the actual warranties given (otherwise called ‘qualifying information’). The High Court said yes, but only to a limited extent. The Court of Appeal also said yes, but to a larger extent.
Perhaps the most damning misleading statement concerned the ‘lifetime’ stain resistance warranty. The headline on Cavalier’s website read:
“Lifetime stain and soil resistance* specially engineered fibres repel and lock out stains so spills are easier to clean” [*referring to a hyperlink to download the warranties booklet]
Impressive, yes? Well, sadly no if you downloaded and read the warranties booklet as the Court did. As the Court noted (at paragraph  of its decision), a “careful reading” of the 23 pages of the warranties booklet demonstrated major limitations. For example, for the warranty to be valid:
- “The consumer must vacuum the carpet frequently (pp 4 and 17).
- The consumer must have the carpet professionally (not DIY) steam cleaned at least every 24 months and must provide INVISTA with professional cleaning receipts, if required (pp 4, 14, 17–21).
- The consumer must clean a spill promptly using the Basic Cleaning Steps (BCS) set out in the warranties booklet (pp 4 and 17–18).
- If the BCS fail, the consumer must have the affected area of the carpet professionally cleaned at their own expense (pp 4 and 17–21).
- If the affected area remains unsatisfactory after the professional cleaning, the consumer must contact the STAINMASTER® carpet service centre and provide proof of the professional cleaning within 30 days of the professional carpet cleaning (p 4).”
In addition to these, and other similar demands, the booklet provided a detailed list of no less than 50 – 50! – types of stains not covered under the warranty. These included crayon, furniture polish, hair spray, hand lotion, insecticide, lipstick, acne medication, plant food, toilet cleaner, and pet and human stains, including blood and urine.
Hang on – I thought the warranty said “Lifetime stain…resistance* specially engineered fibres repel and lock out stains so spills are easier to clean”? ‘Specially engineered fibres’? You sure? ‘Spills are easier to clean’? But, after the list, what type of spill is left? Tap water?!
In considering whether headline representations breach the Fair Trading Act the Court proffered five principles to guide itself; in short:
- What overall impression does the advertisement give?
- Individual statements within an advertisement should not be assessed in isolation.
- Is the information qualifying the headline statement sufficiently prominent?
- Is there a glaring disparity between the headline representation and the qualifying information?
- Does the advertisement when viewed as a whole have a tendency to lure to entice consumers into “the marketing web” by an incorrect belief engendered by the advertiser?
I suggest, not out of arrogance but as a former marketer myself, that advertisers and marketers would do well to adopt these guiding principles also.
The Court’s decision makes a fascinating read (a copy can be found here:). As a colleague of mine is wont to say: do it.
This article first appeared in the Waikato Business News