DECISION

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                                      DECISION

                         Special Meeting 23 October 2007

                        Convened Pursuant to Rule 3 of the

          Constitution of the Advertising Standards Complaints Board


Complaint 07/273

AWAP 07/009


         Complainant: The New Zealand Automobile Association Incorporated
         Advertisement: IAG New Zealand Limited (“State Insurance”)

Complaint: Four television advertisements were produced for IAG New Zealand
Limited to promote State’s Roadside Rescue service. The advertisements screened
multiple times on several channels. Each advertisement involved five people each of
whom wore a t-shirt with a white letter on the front. Together the letters spelt “State”.
The individuals offered “helpful tips” and an additional service for those wanting
“more than just car insurance”. Four advertisements included the following
statement, “We’ve got over 1000 roadside rescue vehicles on call 24/7”. Two
continued with, “Every day of the year”. The advertisements also showed an image
of a State branded roadside rescue vehicle.


The Complainant, The New Zealand Automobile Association, said:

[14 June 2007]

“The New Zealand Automobile Association Incorporated ("The AA") wishes to lay a
complaint with the Advertising Standards Authority regarding a current State
Insurance television advertising campaign on the basis that the advertising is
misleading.

The advertising promotes State Insurance's 'Roadside Rescue' service. It has
screened multiple times since Sunday 27 May. Recent screening times include
during 3 News at around 6.20pm on Sunday 10 June, and during Pop's Ultimate Star
on TV2 at around 8pm on Sunday 10 June.
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The advertising features a scene of a person in State Insurance branded clothing
holding an image of a State Roadside Rescue vehicle while another person in State
Insurance branded clothing says: 'We've got over 1,000 roadside rescue vehicles on
call 24/7 every day of the year'

The AA believes this is misleading for the following reasons:

1.   Gross overstatement of number of State roadside rescue vehicles

The ad claims State has over 1,000 roadside rescue vehicles. The AA understands
State has fewer than 100 such vehicles.

The AA provides breakdown assistance to 835,000 Personal AA Members and an
additional 391,000 vehicles covered by corporate and vehicle manufacturer
programmes. This service is delivered via a fleet of 156 Roadservice vehicles. This
equates to 7,859 customers per Roadservice vehicle.

The AA understands State Insurance has approximately 220,000 Roadside Rescue
customers. The AA also understand State services approximately 200,000 additional
vehicles covered by corporate and vehicle manufacturer programmes. To require
over 1,000 roadside rescue vehicles to service these customers would equate to 420
customers per Roadside Rescue vehicle, meaning State would service only 5.3% of
the number of customers AA services with a similar vehicle.

Additionally, the small visible presence of State Roadside Rescue vehicles on New
Zealand's roads suggests State has far fewer than 1,000 such vehicles.

2.   Misleading implication that non-branded, non-dedicated independent
     contractor vehicles are State Roadside Rescue vehicles

When AA's own Roadservice vehicles are unable to attend breakdown calls, the AA
utilises a network of approximately 400 independent contracting companies. These
contractors typically operate their own non-branded vehicles and most are not
dedicated solely to servicing AA Members. The AA understands State utilises a
similar model for breakdown calls that its own Roadside Rescue vehicles cannot
attend.

State's roadside assistance brand is 'Roadside Rescue'. Accordingly the AA believes
that it is misleading for State to imply, via it's claim of 'over 1,000 Roadside Rescue
vehicles' accompanied by an image of one of its own branded Roadside Rescue
vehicles, that it has over 1,000 Roadside Rescue vehicles when the vast majority of
these are non-branded independent contractors who are not dedicated to State
customers, and many of whom have work other than responding to State customers
requesting roadside assistance, which can limit their ability to attend to State
Roadside Rescue customers.

3.   State's 'on call 24/7 every day of the year' claim is misleading

The AA maintains a '24/7' 365 day a year roadside assistance service through the
use of its own 156 Roadservice vehicles and a network of 400 independent
contracting companies. Many of these contractors are not available at all times. For
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example some are sole traders who are physically unable to work 24 hours per day.
The AA understands State utilises a similar model.

The AA believes that even if non-branded independent contractor vehicles can fairly
be included under a description to 'over 1,000 roadside rescue vehicles', it is
misleading for State to claim that these vehicles are on call 24/7 every day of the
year' as many are either not available at all times, or have work other than
responding to State customers requesting roadside assistance, which can limit their
ability to attend to State customers.

Accordingly, the AA believes that State's 'on call 24/7 every day of the year' claim is
misleading.”


The Chairman ruled that the following provisions were relevant:

Code of Ethics

     Rule 2: Truthful Presentation - Advertisements should not contain any
     statement or visual presentation or create an overall impression which directly
     or by implication, omission, ambiguity or exaggerated claim is misleading or
     deceptive, is likely to deceive or mislead the consumer, makes false and
     misleading representation, abuses the trust of the consumer or exploits his/her
     lack of experience or knowledge. (Obvious hyperbole, identifiable as such, is
     not considered to be misleading).

Code for Comparative Advertising

     Guideline (a): Comparative advertising should be factual and informative and
     should offer a product or service on its positive merits. The intent and
     connotation of the advertisement should be to inform and not to discredit,
     disparage or attack competitors, competing products or services directly or by
     implication.


Procedure: The Chairman ruled to deal with the matter by “adjudication with
attendance of the parties” pursuant to Rule 3 of the Complaints Procedures of the
Advertising Standards Complaints Board. This system was designed to resolve
disputes between competitors. Accordingly, the Chairman appointed a Panel.


The Panel: Mr R. Thompson, Chairman of the Advertising Standards Complaints
Board. Co-panelists Mr E Abernethy, Chairperson of the Advertising Standards
Complaints Appeal Board and Mr R Moffat, Member of the Advertising Standards
Complaints Appeal Board.


The Complainant, The New Zealand Automobile Association, was represented by
Mr D. Swift - General Manager Membership.
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The Advertiser, IAG New Zealand Limited, was represented by Mr M. Taylor –
Research Manager and Mr. A. Olney, Russell McVeagh.


The Advertiser, IAG New Zealand Limited, said:

[9 July 2007]

“State Insurance is a business division of IAG New Zealand Limited. We are
therefore writing in response to your letter of 28 June 2007 regarding the above
complaint about a State television advertisement.

The advertising

The New Zealand Automobile Association (NZAA), which is one of our competitors,
is the Complainant. The Complaint relates to an advertisement which promotes
State's Roadside Rescue service. "Roadside Rescue" is used to describe State's
vehicle breakdown service, which is available on subscription to customers who take
out comprehensive car insurance with State.

The advertising referred to in the Complaint first screened on Sunday 27 May 2007.
There are four variations of this advertisement. Full scripts of all four variations are
attached at Schedule 1. As you will see, two of the advertisements make the claim

'We've got over 1000 roadside rescue vehicles on call 24/7 every day of the year".
This is the statement which has been objected to by the Complainant.

The complaint

The Complainant alleges that the statement identified above is misleading as it:
1.   grossly overstates the number of State Roadside Rescue vehicles;
2.   implies that non-branded, non-dedicated independent contractor vehicles are
     State Roadside Rescue vehicles when they are not; and
3.   claims that all 1000 vehicles are 'on call 24/7 every day of the year' when this
     cannot be the case.

The Deputy Secretary has identified that the Complaint appears to be made under
Rule 2 of the Advertising Code of Ethics and Guideline (a) of the Code for
Comparative Advertising. Rule 2 of the Code of Ethics dictates:
            Truthful Presentation - Advertisements should not contain any
            statement or visual presentation or create an overall impression which
            directly or by implication, omission, ambiguity or exaggerated claim is
            misleading or deceptive, is likely to deceive or mislead the consumer,
            makes false and misleading representation, abuses the trust of the
            consumer or exploits his/her lack of experience or knowledge. (Obvious
            hyperbole, identifiable as such, is not considered to be misleading).
Guideline (a) of the Code for Comparative Advertising provides:
            Comparative advertising should be factual and informative and should
            offer a product or service on its positive merits. The intent and
            connotation of the advertisement should be to inform and not to
            discredit, disparage or attack competitors, competing products or
            services directly or by implication.
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State stands by its advertising and the statement which has been made. Our
position is that all of our advertising complies with the Code of Ethics, and in
particular that the statement complained about is not misleading as all of its
elements can be substantiated. Further, we do not consider that the advertisement
constitutes comparative advertising and as a result the Code for Comparative
Advertising is not relevant and has not been breached. These submissions are
discussed in further detail below.

The advertising can be substantiated

In order to establish that the advertising can be substantiated, we shall deal with
each of the allegations made by the Complainant in turn.

     1. Gross overstatement of number of State Roadside Rescue vehicles

The advertising claims that State has "over 1000 Roadside Rescue vehicles". The
Complainant has queried this claim alleging that it understands State has fewer than
100 such vehicles.

State's Roadside Rescue service is managed by First Rescue and Emergency (NZ)
Limited (First Assistance). lAG New Zealand Limited own 50% of the shares in First
Assistance. State agrees with First Assistance the key performance indicators for its
vehicle breakdown service and First Assistance then manages the relationships with
individual service providers to ensure these service levels are maintained. State
customers are connected with First Assistance via a call centre operation when they
request roadside assistance using the 0800 number. It is the First Assistance call
centre which arranges for the Roadside Rescue vehicle to be dispatched.

The "over 1000 Roadside Rescue vehicles" claim was originally based on information
provided by First Assistance. Accordingly, upon receiving the Complaint, we sought
verification from First Assistance as to its accuracy. First Assistance has confirmed
that State does indeed have over 1000 Roadside Rescue vehicles available.

     2. Misleading implication that non-branded, non-dedicated independent
        contractor vehicles are State Roadside Rescue vehicles

As evidenced above, State does in fact have over 1000 Roadside Rescue vehicles
available for its customers. The Complainant's allegation, that vehicles which are not
specifically branded "Roadside Rescue" and are not solely dedicated to State
customers cannot be described as Roadside Rescue vehicles, is contrived and
erroneous.

The advertisement contains an image of a branded State Roadside Rescue vehicle
to reinforce the consumers' association with the brand. That being said, as State out-
sources its Roadside Rescue service to First Assistance, clearly not all vehicles
available for Roadside Rescue call-outs will be branded by State. Notwithstanding
this, we note that a Roadside Rescue vehicle is essentially one that provides
services to State's Roadside Rescue customers. Additionally, all providers of State's
Roadside Rescue service are required to wear a branded State vest when they
attend Roadside Rescue call-outs so that customers can be confident they are
receiving a State service. Accordingly, the fact that the vehicles themselves are not
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necessarily branded with State Roadside Rescue does not detract from the fact that
there are still over 1000 Roadside Rescue vehicles available for State customers.

      3. State's 'on call 24/7 every day of the year' claim is misleading

There is nothing misleading about this claim - State's Roadside Rescue service is
available for customers to access 365 days a year, 24 hours a day. Each Roadside
Rescue provider agrees to make themselves available to be on call 24 hours a day, 7
days a week, unless they are already attending a call or are unavailable for personal
reasons. In any event however, the Complaint is again contrived in so far as it
alleges that customers will be misled into thinking that all 1000 Roadside Rescue
vehicles are each on call 24/7 every day of the year.

From a customer's perspective, what is important is that they can contact someone
and receive help 24 hours a day, every day of the year. This is the key message
being portrayed in the advertising. The fact that State has over 1000 Roadside
Rescue vehicles is simply one method used to ensure that State Roadside Rescue
can deliver this level of service. State maintains that it delivers its customers a great
service. Indeed figures indicate that 80% of all call outs are mobilised at the roadside.

Average call out times across NZ over the previous 12 months were 29 minutes from
the time a service provider was engaged, with more than 80% of customer calls
being answered within 20 seconds of them dialing.

The advertising is not comparative

As mentioned above, despite the indication that the Code for Comparative
Advertising is relevant to this dispute, we do not consider that the advertisement in
question constitutes comparative advertising.

As a starting point, the Code describes comparative advertising as "advertising that
identifies a competing product or service". There is no reference, either directly or by
implication, to the NZAA or any other competitor in the statement "We've got over
1000 roadside rescue vehicles on call 24/7 every day of the year". Indeed the whole
advertisement simply promotes the State Roadside Rescue service on its own
merits, as an extra benefit that is available when customers take out comprehensive
car insurance with State.

Vehicle breakdown services are promoted and offered by a number of organisations
in New Zealand. Like State, many of these organisations outsource the provision of
vehicle breakdown services to suppliers such as First Assistance. This does not
detract from the fact that all of these organisations compete with each other for
customers at a retail level. Finally, we note that in addition to the NZAA and First
Assistance, International SOS also supplies roadside assistance services to
corporations, insurance companies and individual customers in New Zealand.

In light of the extensive competition in the market and the fact that no competitor is
identified, either directly or by implication, in the State Roadside Rescue
advertisement, we do not consider the Code for Comparative Advertising to be
relevant or breached in the current situation.
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Conclusion

By way of summary, State asserts that the advertisement does not breach Rule 2 of
the Code of Ethics as all the elements of the statement complained about have been
substantiated. Further, as the advertisement does not identify any competitor, State
does not consider that the Code for Comparative Advertising is relevant and in any
event asserts that Guideline (a) of this Code has not been breached. Accordingly we
request that this complaint be dismissed.”


The Advertiser, IAG New Zealand Limited, also said:

[21 September 2007]

“Colmar Brunton have now concluded their verification work and I attach a copy of
their full report.

You will note that on page 8 of their report they state that they can be 100% confident
in the claim that more than 1000 roadside rescue vehicles are available 24/7 every
day of the year.

On the basis that you will be providing a copy of this report to the Automobile
Association (AA) and because our claim has now been independently verified, we
suggest that you invite the AA to withdraw their complaint.”


The Complainant, The New Zealand Automobile Association, responded:

[26 September 2007]

“Pursuant to our telephone conversation yesterday afternoon, we have identified two
apparent flaws in the methodology used by Colmar Brunton to validate State's claim
of having 'over 1,000 Roadside Rescue vehicles on call 24/7 every day of the year'.

I thought it best to raise these now so that the issue can be clarified ahead of the
hearing. I'll describe each as clearly as I can.

1. On page 13 of the Colmar Brunton report, Column B of the second row of the table
lists the number of businesses with exactly one vehicle available on call for State's
Roadside Rescue service as 103. Column C lists the 'Total number of vehicles
available to First Assistance for State's Roadside Rescue service' from these 103
businesses as 103. Column H of the same row however lists 119 vehicles from these
businesses as being available 24/7 and every day of the year. We cannot
understand:
i. how 103 businesses with only one vehicle each can provide a total of 119 vehicles
available to State 24/7. 103 x 1 usually equals no more than 103.
ii. how 103 businesses with only one vehicle each can provide any more than 52
vehicles to State on a '24/7, every day of the year' basis, when Column F lists 51 of
the 103 businesses as businesses 'where NOT ALL vehicles were available 24/7'. If
these businesses have only one vehicle each, and not all their vehicles are available
24/7, then surely that means that their one vehicle is not available 24/7.
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2. Column H of the table on page 13 of the Colmar Brunton report lists the 'TOTAL
number of vehicles available 24/7 and every day of the year'. We see an apparent
flaw in the methodology regarding Column H which leads to an overstatement of the
total figure reported, as follows:
- Column H is calculated by adding the figures in Columns E and G.
- Column G is described as 'Total number of vehicles available 24/7, every day of the
year (where NOT all vehicles are available)'. It is calculated by multiplying Column A
(the number of vehicles operated by that business) by Column F (the number of
businesses with vehicles available 24/7, every day of the year where not all vehicles
were available 24/7)
- the methodology used to calculate the figures in Column G appears to be flawed.
To gain an accurate figure of the number of vehicles that are available 24/7, Column
F should not be multiplied by Column A as Column A lists ALL the vehicles operated
by the business, including those not available 24/7, This means that the total number
of vehicles from those businesses whose vehicles are not all available 24/7 is listed
as the total size of their fleet which is flawed because if not all their vehicles are
available 24/7 (as listed), their number of vehicles that ARE available 24/7 should be
smaller than the their total fleet size.
- This apparent error in the methodology leads to an overstatement of the total
number of vehicles available 24/7 as listed in Column H.
- To gain an accurate figure of the number of vehicles that are available 24/7,
Column F should not be multiplied by Column A. Instead the actual number of
vehicles that these businesses have that are available 24/7 should be tallied and
taken through to Column G.

The Colmar Brunton report lists the number of Roadside Rescue vehicles on call
24/7 every day of the year as 1,021. If the apparent errors in Colmar Brunton's
methodology, as described above, are corrected, it would appear that State does in
fact have fewer than 1,000 Roadside Rescue vehicles on call 24/7 every day of the
year.

We are happy to discuss this at the hearing but given the complexities of describing
the apparent flaws in the Colmar Brunton methodology, we thought it best to put
these in writing now.

Aside from our concerns regarding the Colmar Brunton methodology, we continue to
believe that State's advertising is misleading for the reasons outlined in our initial
complaint to the ASA and look forward to discussing these issues at a hearing.”


The Advertiser, IAG New Zealand Limited, responded:

[3 October 2007]

“Reading through D. Swift’s response, he argues that Colmar's calculations are
incorrect. I can see where the confusion arises as they are complicated to follow,
however I believe that he is wrong in his assumptions.

To prove this I have put some responses below with regards his points, and have
also split out the table on page 13 which is causing the misinterpretation of the data. I
am hoping that by reading through my points, and following the Excel table, D. Swift
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can follow how the calculations were performed and how we came to the conclusions
that we did.

Before I cover his arguments though, I just want to give an overview to the study to
explain why it has been set up like this, as this may help with understanding the
format of the outputs.

The survey's main objective was to demonstrate that State had over 1000 vehicles
Roadside Rescue vehicles on call 24/7 every day of the year. To do this we set out to
do two things:
1 - Measure (of those suppliers we phoned) the total number of vehicles that were
available for Roadside Rescue
2 - Prove that of these vehicles that are available, that over 1000 are available 24/7.

To be 100% sure that we had more than 1000 vehicles available 24/7, we kept
calling from our list of suppliers until we had spoken to enough suppliers to be able to
say without doubt that there were at least 1000 Roadside Rescue vehicles available
24/7. It is important to stress that we could have carried on interviewing suppliers to
get the total number of vehicles available 24/7, as we had not exhausted our lists,
however this was not an objective of the survey. If we had continued, this figure
would have been higher than the 1021 figure we achieved in this survey.

Likewise, we have not used a sample survey to then estimate the total number of
vehicles available. By manually telephoning each supplier to find out the number of
vehicles they had available for State 24/7, we can be 100% positive that we are
correct in our claim. The methodology used to carry out this survey leaves no room
for any margin of error.

D. Swift’s email – part 1
1. On page 13 of the Colmar Brunton report, Column B of the second row of the table
lists the number of businesses with exactly one vehicle available on call for State's
Roadside Rescue service as 103. Column C lists the Total number of vehicles
available to First Assistance for State's Roadside Rescue service' from these 103
business as 103. Column H of the same row however lists 119 vehicles from these
businesses as being available 24/7 and every day of the year. We cannot
understand:
i. how 103 businesses with only one vehicle each can provide a total of 119 vehicles
available to State 24/7. 103 x 1 usually equals no more than 103.

ii. how 103 businesses with only one vehicle each can provide any more than 52
vehicles to State on a '24/7, every day of the year' basis, when Column F lists 51 of
the 103 businesses as businesses 'where NOT ALL vehicles were available 24/7'. If
these businesses have only one vehicle each, and not all their vehicles are available
24/7, then surely that means that their one vehicle is not available 24/7.

- Looking at the table on page 13, this table should in fact be split out in 4 to ensure it
is easy to follow the calculations that have been done:

Columns B-C look at all businesses surveyed, and the total number of vehicles
available, whether this is 24/7 or not.
Columns D-E look at those businesses who said that all of their vehicles that they
have, all are available 24/7
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Columns F-G looks at those businesses who said that not all their vehicles are
available 24/7
Column H is then the total column, adding the results of columns E and G.

Therefore to read across the one row is incorrect, as businesses that appear in the '1
vehicle' row in columns B-C may not appear in the same row for D-E or F-G.

For example take a business with 11 vehicles in total, 1 of which is available 24/7. In
column B it would represented as 11 vehicles. However when you move to column F
this business would now appear in the row showing just 1 vehicle (as only one of
their vehicles is available 24/7). This is why there are more businesses with only 1
vehicle available 24/7 in column F, than you would at first expect . Some businesses
may have had a number of vehicles available, but when asked they drop down to
only having a few available 24/7. You will notice that in column F there are no
businesses with 5 or more vehicles available 24/7, this is because they are all
represented in the first five rows of Column F.

D. Swift’s e-mail – part 2
2. Column H of the table on page 13 of the Colmar Brunton report lists the 'TOTAL
number of vehicles available 24/7 and every day of the year'. We see an apparent
flaw in the methodology regarding Column H which leads to an overstatement of the
total figure reported, as follows:
- Column H is calculated by adding the figures in Columns E and G.
- Column G is described as 'Total number of vehicles available 24/7, every day of the
year (where NOT all vehicles are available)'. It is calculated by multiplying Column A
(the number of vehicles operated by that business) by Column F (the number of
businesses with vehicles available 24/7, every day of the year where not all vehicles
were available 24/7) - the methodology used to calculate the figures in Column G
appears to be flawed. To gain an accurate figure of the number of vehicles that are
available 24/7, Column F should not be multiplied by Column A as Column A lists
ALL the vehicles operated by the business, including those not available 24/7. This
means that the total number of vehicles from those businesses whose vehicles are
not all available 24/7 is listed as the total size of their fleet which is flawed because if
not all their vehicles are available 24/7 (as listed), their number of vehicles that ARE
available 24/7 should be smaller than the their total fleet size.
- This apparent error in the methodology leads to an overstatement of the total
number of vehicles available 24/7 as listed in Column H.
- To gain an accurate figure of the number of vehicles that are available 24/7,
Column F should not be multiplied by Column A. Instead the actual number of
vehicles that these businesses have that are available 24/7 should be tallied and
taken through to Column G.

- Column A does not 'lists ALL the vehicles operated by the business, including those
not available 24/7'. That is column B.
- Column B is not used for either of the calculation columns (E or G), so this does not
cause us a problem overstating the number of vehicles used.

To help follow the workings I have broken up the table on page 13 to try and show
the build effect that is going on and culminates in the results shown in column H. The
tables can be broken down as follows as you read from left to right:
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Original table with added black columns to differentiate the workings behind the
spreadsheet
BREAKOUT 1 - Table showing split by whether all businesses' vehicles are available
24/7 or not. Columns D and D* then flow into the remaining tables
BREAKOUT 2 - Table showing businesses whose vehicles are all available 24/7.
Total is 904.
BREAKOUT 3 - Table showing businesses whose vehicles aren't necessary 24/7.
Taking the 145 businesses that fit into this group, we can see that they break down
to those with no vehicles available 24/7 = 32, and those that have some (including 2
who replied don’t know and had to check internally) = 113 businesses
BREAKOUT 4 - The last table takes these 113 businesses to find out how many of
their vehicles are available 24/7. As you can see although a number of businesses
have a large number of vehicles available, a much smaller number are available
24/7. This is why the number of businesses with only 1 vehicle actually increases,
because it is made up of businesses that overall have a much larger number of
vehicles available, but only 1 available 24/7. From this table we can deduce of the
146 businesses who state that not all their vehicles are available 24/7, 117 of their
vehicles are available 24/7.

Hopefully by splitting the results out as I have they should be easier to follow, and
prove that the calculations are indeed correct. This demonstrates that State are
correct in stating that they have over 1,000 Roadside Rescue vehicles on call 24/7
every day of the year.

If upon reading this and looking at the Excel spreadsheet there is still some
confusion, it may be easier to explain the workings face to face. I am more than
happy to go to AA and sit down with D. Swift to work through any questions he still
has, and try and explain the calculations that were carried out.”


The Complainant, The New Zealand Automobile Association, also responded:

[5 October 2007]

“I've spoken briefly to M… this morning and having digested M…'s explanation
below, we accept that the extra information provided by M… explains the errors we
perceived in the methodology adopted by Colmar Brunton in preparing the
calculations re State's fleet of contractor and Roadside Rescue vehicles.

Pursuant to our initial complaint to the ASA however, the AA still contends that the
State advertisements are misleading. I've outlined these concerns below. At
Michelle's request, and to facilitate dialogue to resolve our complaint, I've copied
Michelle on this email.

The AA believes the State Roadside Rescue advertisements are misleading for the
following reasons:

1. Misleading implication that non-branded, non-dedicated independent contractor
vehicles are State Roadside Rescue vehicles.
- An actor in the advertisements states 'We've got over 1,000 Roadside Rescue
vehicles on call 24/7 every day of the year'.
- 'Roadside Rescue' is State's roadside assistance brand
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- The statement is accompanied by an image of a branded State Roadside Rescue
vehicle.
- State has acknowledged on page 4 of its initial response to the ASA that 'as State
out-sources its Roadside Rescue service to First Assistance, clearly not all vehicles
available for Roadside Rescue call-outs will be branded by State'
- Accordingly, the AA believes the advertisement is misleading as it implies that State
has over 1,000 branded, dedicated Roadside Rescue vehicles when by State's own
admission this is not the case.

2. State's 'on call 24/7 every day of the year' claim is misleading.
The AA believes this claim is misleading for two reasons:

i. First Assistance performs work for many other customers so its own operators and
independent contractors are not available 24/7 for State customers
- State has acknowledged on page 3 of its initial response to the ASA that 'State's
Roadside Rescue service is managed by First Rescue and Emergency (NZ) Limited
(First Assistance).'
- First Assistance attends roadside assistance call outs for a number of clients other
than State. Notably First Assistance provides roadside assistance for a number of
vehicle manufacturer and lease company clients including Ford (approx. 30,000
vehicles), Honda (18,000), Mazda (14,000), Mitsubishi (14,000), Hyundai (12,000),
Audi (3,000), Peugeot (3,000), and Esanda. The AA estimates that First Assistance
provides roadside assistance for well over 100,000 vehicles in addition to State
customers.
- In addition, many of First Assistance's vehicles are independent contractors who
also perform work for their own customers, and/or other roadside assistance
providers as well as for First Assistance State. Accordingly these contractors are not
all available to State customers 24/7 every day of the year.
- We note in the Colmar Brunton report that respondents to the Colmar Brunton
survey were asked 'Could you please tell me the number of vehicles you have
available on call to First Assistance for State's Roadside Rescue service' and 'Are all
these vehicles available 24/7 and every day of the year?'.
- We believe that the question asked by Colmar Brunton is unclear that Colmar
Brunton is seeking a response regarding 24/7 availability to State Roadside Rescue
call outs only (as distinct from other First Assistance jobs), and that many
respondents have answered on the basis of availability to First Assistance, not solely
to State Roadside Rescue.
- Simple economics dictate that there is no way that over 1,000 contractor vehicles
could economically provide roadside assistance solely to State's estimated 220,000
customers eligible for the State Roadside Rescue service. The AA provides it's
Roadservice to 836,000 Personal AA Members and an additional 400,000 corporate,
vehicle manufacturer, rental car and lease company clients - some 1.236 million
customers in total - with a fleet of just 622 operators including its own AA
Roadservice vehicles.
- We invite State to clarify exactly how many of the First Assistance vehicles are
genuinely available solely to State Roadside Rescue customers and not to other First
Assistance customers.
- The AA also estimates that approximately 200 contractor companies, likely
responsible for over 500 roadside assistance vehicles, carry out work for both First
Assistance and the AA, many on an on call basis. We invite State to clarify how many
of these operators are included in the Colmar Brunton report as 'available 24/7 every
day of the year'
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- Accordingly, the AA believes the advertisement is misleading as it states that State
has 'over 1,000 Roadside Rescue vehicles on call 24/7 every day of the year' when
the requirements to service non-State customers means that this cannot be the case.

ii. State's 'on call 24/7 every day of the year' is not genuine
State acknowledges on page 4 of its initial response to the ASA that 'State's
Roadside Rescue service is available for customers to access 365 days a year, 24
hours a day. Each Roadside Rescue provider agrees to make themselves available
to be on call 24 hours a day, 7 days a week, unless they are already attending a call
or are unavailable for personal reasons' [Italics added].
- The AA contends that 'unavailable for personal reasons' which presumably includes
sleep, days off, sickness, holidays, meal times, social activities etc. is a significant
portion of an independent contractor's time, and that individual contractors, and
potentially many other contractors, who are included in the Colmar Brunton tabulation
of 1,021 vehicles claimed to be 'on call 24/7 every day of the year' are not actually
available 24/7 every day of the year as claimed.
- Accordingly, the AA believes this also makes the advertisement misleading

I welcome State's response to these points.”


Television Commercial Approvals Bureau (TVCAB) said on behalf of the
Media:

“The TVCAB advises that the advertisements complained of were accepted and
approved on the basis of what we considered was reasonable substantiation.

From the updated information supplied by State in relation to this complaint we have
no reason to have queried the original commercial further.

We await the ASCB's interpretation of the figures, and the outcome of the complaint,
with considerable interest.”


Oral Submissions

Both Mr Swift for the Complainant and Mr Olney representing the Advertiser
presented oral submissions and responded to questions posed by Members of the
Panel. Written copies of the oral submissions were provided and are held on file.


Deliberation


The Panel confirmed that prior to this deliberation, it had taken into account all the
submissions made in relation to the complaint. It also identified the four
advertisements, which were the subject of the complaint and the Rules and
Guidelines against which the advertisements were assessed.

The Panel observed that the four advertisements were similar and that each one
included the following statement, “We’ve got over 1000 roadside rescue vehicles
on call 24/7”. Two of the advertisements continued with the statement, “Every day
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of the year”. All four advertisements contained the image of a State branded
roadside rescue vehicle.

The Panel considered it appropriate to reiterate its role when determining a
complaint. In particular, that it was required to consider the advertisement from the
point of view of the consumer. Similarly, the Panel noted that it was required to
examine the issues raised by the Complainant, in terms of Rule 2 of the Code of
Ethics and Guideline (a) of the Code for Comparative Advertising.

Code for Comparative Advertising - Guideline (a).

The first issue for the Panel was whether the advertisements fell within the ambit of
the Code. To assist it, the Panel referred to a previous decision 06/119; AWAP
06/004. However, in the Panel’s view, the four advertisements before it were
distinguishable on the facts. Unlike the wording in the Dulux advertisement, there
was no comparison in the IAG/State advertisements between other products or
industry participants either directly or by implication. Accordingly, the Panel
concluded that the advertisement did not fall within the ambit of the Code.
Consequently, the Code for Comparative Advertising was not relevant to its
determination. Both parties to the complaint concurred with this aspect of the Panel’s
ruling.

Code of Ethics - Rule 2

The Panel then turned to Rule 2 of the Code of Ethics. Rule 2 required the Panel to
determine whether, in its view, the advertisement contained any statement or visual
presentation or created an overall impression, which directly or by implication was
likely to mislead or deceive the consumer.

The Panel referred to the words; “We’ve got over 1000 roadside rescue vehicles”.
It noted the issue raised by the Complainant in relation to the number of vehicles. It
noted the image of the branded State Roadside Rescue vehicle in the
advertisements. It also examined the figures provided by Colmar Brunton.

The Panel referred to the Complainant’s response dated 5 October 2007. It noted
that the Complainant was satisfied with the methodology adopted by Colmar Brunton
to substantiate the claim and also, that it was satisfied with the figures provided in the
survey. However the issue of vehicle ownership appeared to remain unresolved. In
other words, although the Complainant accepted that there were over 1000 roadside
rescue vehicles, it did not accept that over 1000 roadside rescue vehicles were
necessarily owned, branded and dedicated State Roadside Rescue vehicles as the
advertisements implied and as the consumer could assume after watching the
advertisements. To resolve this issue the Panel examined the relevant wording of the
advertisements together with the transitory image of the State branded Roadside
Rescue vehicle.

The Panel considered the meaning of the word “got” in the context of the statement
“…We’ve got over 1000 roadside rescue vehicles…”. It noted that the New Zealand
Oxford Dictionary described the word to mean, inter alia, “come into the possession
of”. The Panel then considered the word “possession”. It noted, in particular, that the
word was not always associated with the concept of ownership in the normal sense
of the word. Accordingly, in the context of these advertisements the Panel was
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satisfied that the Advertiser was not required to “own” over 1000 vehicles or, in the
words of the Complainant, to have a dedicated fleet of over 1000 vehicles. In the
Panel’s view the consumer take out would be similar. In other words, when viewing
the advertisements the consumer was unlikely to relate the word ‘got’ with the
concept of ownership in the strict sense of the word.

The Panel then turned to the image of the State branded Roadside Rescue vehicle
used in the advertisements. The issue, in the Panel’s view, was whether after viewing
the advertisements, the consumer would expect only a State branded rescue vehicle
to assist with a breakdown after a telephone call to the State Roadside Rescue
Service. In the Panel’s view, this was an unreasonable expectation or ‘take-out’ from
the image in the advertisements. The Panel examined the image in the context of the
advertisements but, in this instance, concluded that it was not a State branded
Roadside Rescue vehicle that was being promoted rather the State Roadside
Rescue Service. As they were ‘service’ focused advertisement rather than ‘vehicle’
focused advertisements, the Panel was satisfied that the vest worn by all IAG/State
drivers, irrespective of the vehicle markings, clearly identified the wearer as being
part of the IAG/State rescue service team and as such provided sufficient
identification or branding for the purposes of the advertisements. Similarly, it was
unlikely in the Panel’s view that the consumer would expect to see the same make of
vehicle as that which appeared in the image in the advertisements. Therefore the
Panel concluded that in terms if this aspect of the complaint, the advertisement was
not misleading, either directly or by implication or in breach of Rule 2 of the Code.

The Panel also considered the concern expressed by the Complainant in relation to
non-branded, non-dedicated independent contractor vehicles being inappropriately
perceived by the consumer as being State Roadside Rescue vehicles. In the Panel’s
view, this concern was partly satisfied by the reasoning above. In particular, that the
advertisements promoted a service. Therefore any perception of ownership of the
non-branded, non-dedicated independent contractor vehicles was not material to
either the promotion or the Panel’s deliberation. In addition, it was the Panel’s view
that outsourcing was a fact of life which was recognised and accepted by the general
public and, in the context of this complaint, the consumer. Therefore any alleged
perception which the consumer might have that IAG/State owned a fleet of over 1000
dedicated and branded vehicles, in light of the economics of such ownership, was
somewhat improbable. Therefore the Panel concluded that this aspect of the
advertisements was neither misleading nor deceptive and similarly did not breach
Rule 2 of the Code.

The Panel then turned to the words; “…on call 24/7 …”. This aspect of the
complaint appeared to raise two issues. One related to the fact that in the
Complainant’s view 1000 vehicles cannot be ‘on call 24 hours a day 7 days a week’
for the exclusive use of the State Roadside Rescue Service. The other related to the
fact that, in the Complainant’s view, an IAG/State service provider cannot, when
taking into account that they may be unavailable for personal reasons, “be on call 24
hours a day 7 days a week”. In the Panel’s view, the first issue has been satisfied by
the reasoning above. In other words the fact that (…over 1000…) vehicles are not
necessarily solely dedicated to State Roadside Rescue Service members is not
material to the Advertiser’s claim. Outsourcing is a fact of life and it is sufficient that
each IAG/State service provider is clearly identified.
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In the Panel’s view, what is important to the consumer is that if they take up the offer,
the service that is promoted is the one they receive. In other words if a member’s
vehicle breaks down that member will receive assistance.

In relation to the second issue it is the Panel’s view that the words “on call” in terms
of the personnel or service providers relates to the issue of availability rather than
exact numbers. Therefore, as long as the consumer is satisfied that the service that
is promoted is the one they receive, the actual numbers are not material to the
Advertiser’s claim. Any perception that the consumer may have that over 1000
IAG/State service providers are waiting solely for a State Roadside Rescue Service
call out is clearly misconceived. Therefore, the Panel concluded that these aspects of
the advertisements were neither misleading nor deceptive nor were they in breach of
Rule 2 of the Code.

The Complainant raised a similar issue with the use of the additional words in two of
the advertisements, “every day of the year”. However for those reasons already
cited, the Panel was of the view that they were not misleading or deceptive either
directly or by implication.

The Panel also noted the matter raised by the Complainant in terms of the following
questions in the Colmar Brunton questionnaire. “First, could you please tell me the
number of vehicles you have available on call to First Assistance for State’s
Roadside Rescue service?’, and, “Are these vehicles available 24/7 and every day
of the year?”. In the Complainant’s view it was unclear that Colmar Brunton was
seeking a response regarding 24/7 availability to State’s Roadside Rescue call outs
only. However, the Panel disagreed. In the Panel’s view the questionnaire was clear.
The introduction clearly stated, “Good morning …Can I speak to …My name is …
from Colmar Brunton. We are calling on behalf of State Insurance and First
Assistance to conduct an independent audit to confirm the number of vehicles
available for State’s roadside assistance customers”. This was repeated in the
first question and has been highlighted by the Panel for identification.

In relation to the advertisement as a whole, the Panel concluded that, in context, the
message to the consumer was clear. It simply promoted a customer service. In other
words, in the event of a breakdown a State Roadside Rescue Member could, after
calling the service, expect (i) the attendance of a person (ii) that the person could be
identified as part of the IAG/State Roadside Rescue team (iii) that the person has
sufficient knowledge and equipment to have a reasonable chance of rectifying the
problem.


Accordingly the Panel ruled to not uphold the complaint.




Decision: Complaint Not Upheld

				
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