Carsguide’s ad campaign against rivals Carsales ruled misleading and deceptive by court
Online car classified website Carsales.com.au has won its court case against rival CarsGuide.com.au over a recent ad campaign which it said was misleading and deceptive.
The Victorian Supreme Court today upheld Carsales’ argument that many of the representations made in the campaign, which started on June 15, were false.
Among the claims made in the case were that carsales.com sells a consumer’s contact details to dealers, that carsales.com passes on a consumer’s details to dealers without the consumer’s knowledge and that a consumer’s details are provided to a range of dealers if the consumer enquires about a car using the website.
Justice Judd in his ruling said: “I find that by making the representations through its advertising campaign the defendant has engaged in conduct that is misleading or deceptive or likely to mislead or deceive the Australian public contrary to section 18 of the Australian Consumer Law”.
One execution of the campaign, created by BWM Dentsu, saw CarsGuide position a lightning embossed blimp directly over competitor CarSales’ head office in Melbourne alongside a billboard reading ‘Let lightning strike those who sell your contact details to dealers’.
The judge also ruled that: “The defendant’s attempt to explain or justify the purpose of its advertising campaign was unpersuasive. It was superficial and internally inconsistent. It would be fanciful to concede that the defendant was disinterested in the value to its client dealers…”
Publicly listed Carsales this afternoon trumpeted its victory in a statement CEO Greg Roebuck said: “We saw the carsguide.com.au campaign as trying to damage the relationship of trust that carsales has established with consumers over many years.
“We see this decision as a win for both us and the consumer, who will now not be subjected to these misleading advertisements.”
In a statement issued this afternoon Carsguide CEO Lauren Williams said: “Since early 2015, Carsguide has not charged dealers on a leads model basis.
“Unfortunately the court found that the advertisements conveyed misleading representations. Carsguide regrets this.”
Nic Christensen and Miranda Ward
Update 2.50pm Carsguide CEO Lauren Williams has issued the following statement:
“We were today unsuccessful in being able to continue Carsguide’s latest advertising campaign.
“In 2014, Carsguide introduced an approach to advertising cars that generally gives customers the choice to remain anonymous until they know who and where a dealer is.
“Since early 2015, Carsguide has not charged dealers on a leads model basis.
“Unfortunately the court found that the advertisements conveyed misleading representations.
“Carsguide regrets this.
“On the Carsguide website, you can get the dealer’s name and exact location without entering contact details for almost every dealer car listed. We think this is a benefit to consumers.”
I thought Carsales did get paid for supplying consumer details to dealers? isnt that why they dont show the location of the car ?
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They do get paid for it. They charge upwards of $40 whenever a consumer submits an enquiry.
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@Chuck D. I think you are missing the point. Try reading it again. Slowly, if necessary. It was an ill-thought out campaign and it has received a deserved slap on the wrist.
As the ruling states, Carlsguide’s justification was “superficial and internally inconsistent’ and the ads were “misleading” and “likely to deceive”.
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They do. I pay $41.50 each time I receive a lead.
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I enquired on a few dealer vehicles on Carsales and a few dealers called me. I guess Carsales made money off that, no biggie or issue – ended up getting 3 quotes back, one from Shepparton which was cheaper then any Melbourne dealer. Purchased the car the week after. Thumbs up to Carsales for a Good user experience
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@Dominic C I think I did read it slowly, what’s the point?
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@Dominic C – thanks for the advice, not sure why you are implying I need to read slowly?that’s a bit personal isnt it? Do you have a vested interest here or something?
I was simply pointing out that its well known that they charge dealers for consumer information?
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What a shame! I hope this doesn’t mean the end of these light hearted campaigns. I think Carsales should learn to lighten up a bit.
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@Tim @Chuck D. The ads claimed Carsales was tracking confidential information about customers and selling them to car dealers without the customer’s knowledge.
Justice Judd found the claim was false.
He found that while Carsales did provide details to dealers, the process was made clear to customers.
He also noted that Carlsguide operated under a similar, though not identical, business model.
See, simple 🙂
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Good outcome for common sense!
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Interesting going for the number 1 when you’re number….4?
Fees are paid for services rendered. Dealers may not pay for leads on carsguide but they do pay. Just a different model.
Good on CG for trying a different approach, however it made more of a splash within the ad industry it would seem than with consumers. No one really noticed.
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Just another example of Carsales using its monopoly power and strangle hold on dealers to try to crush any competitor, a sad day for the auto industry
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@Dominic C. Maybe I am missing something here but I didn’t interpret the adverts as claiming that Carsales ‘tracked confidential information’ about consumers??? I found the messaging to be rather simple – you fill out a form, you give your name and number, and Carsales then passes that information along to the dealer for a fee. Sure the adverts were cheeky and lightening bolt probably poor taste, but ultimately the messaging was pretty spot on I thought…
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@Dominic C ….you and your mate :” Justice Rudd” must have seen a different ad because the one in the picture says that they sell contact details to dealers? Which they do.
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@Chuck D – advertising campaigns feature more than one piece of creative, derrrrrrr. Call your mates at Carsguide and get them to supply you every piece of ad copy from their TV, Radio, Print and Billboard campaign…… Then make your mind up…
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LOL – I dont need to ask anyone for creative , I am pretty sure there was no ad that said ” Carsales was tracking confidential information about customers and selling them to car dealers without the customer’s knowledge.” Just better lawyers.
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@Chuck D – is that you Carl?
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No .. Just a good friend who cares about the industry
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If you’re the real Chuck D lets get the band back together?
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Geez, questionable result!
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