The ASA issued new guidelines on December 21, 2016 (ATG No 2273) that required non-optional and optional fees to be made clearer where estimates are published.
Auctioneers previously employed a series of small symbols to indicate when a lot may be subject to extra costs and fees such as VAT, import VAT at a reduced or standard rate or Artist’s Resale Right (ARR), or whether or not it is the subject of a price guarantee or an ‘irrevocable bid’.
The meaning of these symbols was usually found in the auction house’s terms and conditions to the back of the catalogue. However, the ASA and the Committee of Advertising Practice (CAP) guidance suggested the fees should be clear on each page of any advert or catalogue.
Antiques Trade Gazette’s parent company Auction Technology Group issued guidance on the ASA’s rules which is reproduced on the ATG website.
“We believe that the guidance we have issued, if followed, should hold auctioneers in good stead,” said Richard Lewis, chief operating officer at ATG. He added: “This ruling demonstrates the importance of including VAT and buyer’s premium, and any references to additional fees, next to auction estimates.”
In the recent ruling from the ASA on Christie’s, it said the auction house must ensure “information about how those charges and taxes were calculated were adequately signposted” and “ensure that quoted guide prices in future advertising for auction items or lots made clear that non-optional charges… were payable on top of the hammer price”.
The ASA’s investigation was focused on Christie’s online catalogue from the Interiors sale of January 31, which included items from Sir David Tang and from Bywell Hall in Northumberland.
The ASA said it upheld the complaint that the advertising was misleading because the “guide prices quoted in the listings did not sufficiently make clear that buyer’s premium and VAT were payable, that detailed information about the calculations of those additional fees and taxes were not adequately signposted in the listings, and the rates of buyer’s premium quoted in the Conditions of Sale were not inclusive of the rate of VAT payable”.
In a statement Christie’s said it had “already worked in accordance with previously stated recommendations to ensure that we clearly publish information in regard to the additional charges that can be incurred on top of the ‘hammer price’ in an auction (such as buyer’s premium, VAT and Artist Resale Rights where applicable).”
It added: “We are therefore surprised by this finding. However, we will continue to work to improve the visibility in this area.”