Types of claims: “Established since …”


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Published
Mar 15th '24
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Marketers claiming that their business has been established for a specific number of years or implying that their business has been established for a long time should hold documentary evidence.

 

A consumer’s transactional decision may be affected by claims that a company is well-established or has a long history, especially in industries that might have a high level of failed or bankrupted companies. As such, unless the claim can be supported by evidence which demonstrates that it is accurate, a claim that a business has been established for a certain duration of time is likely to be considered misleading. Consumers buying products that are backed by guarantee, especially those that claim to be valid for a long time (for example double glazing), want reassurance that that company will still be around should they need to invoke that guarantee.

 

  • Impact of name changes or premises alterations

If the marketer can demonstrate a period of continuing trade, it should be acceptable for a business to refer to that heritage even if its trading name has changed or the business has moved premises. The Advertising Standards Authority (ASA) considered that “WALTONS EST. 1878” and “EST. 1878”, which were seen in an ad for a cabin retailer, were not misleading, because although ownership of the “Walton” brand had changed, the advertiser showed the brand had been maintained and had an uninterrupted trading history since 1878 (Rosimian Ltd, 10 February 2016).

 

Similarly, in 2021 the ASA decided not to uphold a complaint regarding Vauxhall Motors’ claim to be a ’British Brand since 1903’. Despite being owned by American and French companies (the latter of which was based in the Netherlands) since 1903, the Vauxhall brand was established and sold in the UK, and had maintained offices and operations in the UK (Vauxhall Motors Ltd, 07 April 2021).

 

  • Referencing earlier iterations of the business

A company (X) might have bought an existing or liquidated company (Y). X may want to adopt Y’s brand heritage by continuing to advertise Y’s business name as a trading style and referring to Y’s trading history. That approach is likely to be acceptable provided the purchasing business (X) can demonstrate that it has assumed the liabilities of Y, by paying Y’s debts, for example, and honouring Y’s guarantees.

 

In 2017 a complaint about “Providing Solutions for Professionals SINCE 1991” was upheld. The ASA understood that the claim was based on Healden Grove inheriting the reputation and trading history of an earlier incarnation of the same company, and considered that this was acceptable provided it could be substantiated. The advertiser could not demonstrate that Healden Grove had inherited the reputation and trading history of the former partnership upon its incorporation as a limited company in 1997. The claim was therefore considered misleading (Healden Grove, 1 March 2017).

 

  • Substantiating ‘established since’ claims 

In 2016 the ASA considered that “KPIGC has been enriching businesses…since 2006” would be understood by consumers to indicate that the company had been operating since 2006. Because the advertisers did not provide any documentary evidence to demonstrate this, the claim was considered misleading (KPI Gaming Consultants,13 July 2016).

 

Similarly, Viva Doors failed to provide any evidence in respect of their claim to have been ‘designing, manufacturing and installing glass doors and aluminium structures, that are both beautiful and functional for over 50 years’. This led to the ad being deemed misleading (Viva Doors Ltd, 12 April 2023). Slipsilk substantiated their ‘…since 2004’ claim by showing that their product receipts, company registration and domain name dated from 2004 (Slip Enterprises Pty Ltd t/a Slipsilk, 11 March 2020).

 

In certain circumstances, the law regulates what claims are permitted, especially if a purchased business run by the same people had gone into insolvent liquidation or if competing claims to ownership of the goodwill and a likelihood of confusion exist.

 

Source: Committee of Advertising Practice (CAP)

 

About CAP

The Committee of Advertising Practice (CAP) is the sister organisation of the Advertising Standards Authority (ASA) and is responsible for writing the Advertising Codes.

 

Note: This advice is given by the CAP Executive about non-broadcast advertising. It does not constitute legal advice. It does not bind CAP, CAP advisory panels or the ASA.

 

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