A complaint was filed against CitiBank alleging that the contents of its “ Off to Macao Promotion” advertisements were false and untrue
Chinese Taipei
Case:
A complaint was filed against CitiBank alleging that the contents of its “ Off to Macao Promotion” advertisements were false and untrue
Key Words:
false, untrue, and misleading presentations, gifts and prizes
Reference:
The Fair Trade Commission Decision of June 25, 1997 ( the 295th Commission Meeting); Disposition (86) Kung Chu Tzu No. 087
Industry:
Finance and its Ancillary Industries (6010)
Relevant Laws:
Article 21 of the Fair Trade Law
Summary:
1. Article 21 of the Fair Trade Law states that “ an enterprise shall not make, on goods or in advertisements relating thereto, any false, untrue, or misleading presentations. Such provision also applies to the provision of services by an enterprise.”
In accordance with “the principle in handling false, untrue, or misleading presentations” adopted by the Fair Trade Commission, the term “ services” stated in Article 21 of the Fair Trade Law refers to the “ subject of trade” with economic value, and/or other transaction activities which can attract prospective customers for future transactions but not directly related to the “ subject of trade” , such as gifts and prizes offered by an enterprise. Therefore, any enterprise that makes false, untrue, or misleading presentations in its advertisements relating to its service content, such as the supply of gifts and prizes for sales promotion, shall be deemed in violation of Article 21 of the Fair Trade Law.
In addition, the gifts and prizes offered for sales promotion are often attractive to the consumers. Information such as contents of promotion, methods of participation including limitations on the number of participants, promotional period, quantity, methods, and other expenses, are important to the consumers in deciding to whether or not to participate in the said promotion. Therefore, an enterprise should clearly state the aforementioned information. Where information is purposely withheld in advertisements, thus misleads the consumer, such advertisement shall be considered false and untrue.
2. Upon investigation, it was found that the advertisements distributed by the defendant stated that: “ From this day on, as long as you are a CitiBank credit card holder, you do not have to accumulate your credit card spending and you will have a chance to take a trip to Macao for a reduced price beyond your imagination.”
For the overall presentation of the above described advertisement, the information being conveyed by the defendant was: “ As long as a consumer owns a credit card issued by the defendant, upon enrollment, the consumer can take a vacation in Macao at a special price of NT$1,800 during the promotional period. There is no need to draw the participants by raffle. Nor are there supplementary conditions or further restrictions.”
Upon investigation, it was found that CitiBank offered its participating credit card members a special price of less than NT$1,800 for the EVA Airways Taiwan/Macao economic class round-trip ticket (NT$1,000 for Gold Card and NT$600 for Diner’ s Card) and NT$3,000 to additional card holders (non-credit card members). After the consumers filed their applications with the reservation hot-line, names of the applicants were randomly drawn by a computer, with five applicants per group. Applicants whose name that were not drawn by the computer would thus denied the trip to Macao. Those who wished to again participate in the promotion should select another date for the trip, and file a new application.
According to data provided by the defendant, a total of 57,743 applications were received as of January 13, 1997; the actual number of successful applicants was only 20,484, a mere 35% of the total number of applicants. In addition, according to a survey conducted by this Commission on the participants, three out of every 28 participants had filed for application more then three times, but were still unable to make the trip to Macao. A participant gave up trying after applying for more than 10 times to no avail. Among those who were able to finally make the trip, two participants had filed their applications more than 10 times.
In addition, since the number of applicants was limited to five per group, the chance that an applicant would be able to make a specific trip on a specific date would even be slimmer.
The aforementioned facts obviously differ from the understanding and reasonable expectations that the consumers derived based on the information conveyed in the advertisements. For the limitations to the participation of the promotion, the defendant did not specify and provide important transaction information. Thus it is difficult to say that the advertisements did not cause misleading or affect fair competition.
3. The defendant argued that the airline seats were limited during the promotional period, and that it used the computer to draw the name of the applicants only when the number of applicants exceed the number of airline reservations. Those who were not chosen by the computer could still make further applications.
The defendant further argued that after receiving the letter issued by the Commission, it placed a half-page advertisement in The Great News on December 17, 1996, stating that “ due to active participation from the members, and with the limited number of daily airline seats to Macao, we will use a computer to draw the names of the successful applicants to ensure a fair chance to all applicants.”
On December 31, 1996, the defendant also ran a television commercial adding that “ the last trip to Macao will depart on May 31, 1997. Since the number of daily airline seats is limited, a computer will be used to draw the names of the applicants if the number of applicants exceeds of the available airline seats.” In the new version of the Cardholders’ News issued in 1997, it also printed an article “ How to Successfully Line up for the Application,” stating that whether the trip to Macao could be made would depend on the names drawn by the computer.
Upon investigation, however, it was found that since the beginning of the promotional period, the defendant had repeatedly advertised the promotion both on television and in the print media to attract the attention of the consumers. The message that “ as long as you own a CitiBank credit card, you can easily enjoy a trip to Macao for NT$1,800” was also repeatedly conveyed. The supplementary explanations were only provided after complaints had been filed and after the Commission had written the defendant to request an explanation. Although the act has since been corrected, it does not negate the fact that advertisements were false. It also proved that the defendant acknowledged that the advertisements were false.
In addition, although the advertisement fliers and the newspaper advertisements provided by the defendant stated that “ CitiBank reserves the right to change the contents of the promotion. Please refer to the Promotion Brochure provided by CitiBank for detailed explanation on the promotional activities,” the advertisements in question were formulated and published by the defendant. The arguments offered by the defendant did not disprove that the published advertisements were false, untrue, or misleading in their presentations. Therefore, the arguments offered should not be used as an excuse.
Summarized by Lin, Chiu-miao
Supervised by Hsu, Chao-ying
Appendix:
Citibank's Uniformed Invoice Number: A0003209
＠: For information of translation, click here
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