Hoover returns to court next week to defend itself yet again over allegations stemming from the notorious “free flights fiasco” which has now dogged the company for five years.
The latest test case is being brought by two individuals claiming they were misled by Hoover in offering them flights which they could not reasonably have been expected to take. If Hoover loses, it could open the floodgates for thousands of compensation claims.
And despite the claim from Hoover spokeswoman Caroline Knight that the promotion “is over and done with”, the case could also reignite fears in the 7.5bn sales promotion industry which has spent the past five years trying to rebuild its image after the free flights affair.
When it promised “Two free flights to America” back in 1992, those contemplating the genius of such a generous offer could never have known that, five years down the line, the company would still be paying for it in bitter court wrangles.
Hoover is currently appealing against an earlier test case, heard in February. It was found guilty of abusing the “one application per household” rule by disallowing all claims made from the same address. Judge Bennett, who will also preside over next week’s hearing, awarded two complainants over 450 each in damages.
The judge ruled that the company should not have cancelled all rights to tickets but instead should have honoured its commitments by allowing one of the claims. Hoover refuses to release an up-to-date total of cases, but at least another 70 have been heard in small claims courts – one in five of which the company has lost.
Next week’s case at St Helens County Court on Merseyside will bear on how the two consumers were offered “unreasonable” alternatives after being denied their six chosen flight dates because they were “unavailable”.
Solicitor Nick Davis, at the J Keith Parks law firm in Liverpool, will argue that Hoover effectively discouraged people from taking up the offer. The Hoover promotion claimed that people could fly “whenever they liked between February 1 1993 and April 30 1994”. Davis does not believe that the so-called “unavailable” dates chosen were, in fact, “unavailable”. Hoover’s defence is likely to be that it has honoured its commitments. But the company is refusing to say what its position will actually be in court.
The promotion, which was launched in the summer of 1992, initially offered two free flights to Europe with the purchase of a product worth over 100. Successful sales inspired promoters to up the ante and give two free flights to the US – at a potential cost to Hoover of about 400 per ticket.
It would be an understatement to say that the promotion put the Hoover name on everybody’s lips – but for the wrong reasons. A 48m bill, and three senior executive firings made some very compelling headlines.
Davis claims to represent a further 120 people with similar complaints to those in the test case. If the test cases are successful, Hoover could be looking at a hefty bill, as Davis is predicting thousands could seek compensation. Of the 600,000 people who expected a holiday from the promotion (about 300,000 vouchers were issued), 220,000 made it to the US. That leaves the company with 380,000 disappointed people.
But the impact of the flights fiasco has spread well beyond Hoover. Before the row erupted, the Institute of Sales Promotion (ISP), which represents the sales promotion industry, received ten calls a week requesting legal and copywriting advice from people launching sales promotions. It now receives 25 calls each day.
“People have realised the importance of making a realistic estimation of consumer take-up and getting promotions legally checked,” says ISP secretary general Susan Short. “The Hoover case highlights the necessity of getting promotions checked by the relevant experts.”
But rather than putting people off taking up an offer, Short believes the Hoover fiasco has “made consumers more aware of the various channels of complaint”.
The Advertising Standards Authority, which received thousands of complaints from furious consumers, echoes this view. “The industry learnt a lot from that promotion. It has gone down in history as an example of what not to do,” says director of communications Caroline Crawford.
“Hoover’s was what I would describe as a typical ’small print’ promotion. I don’t think that it’s particularly popular to have a small print promotion of that type these days. And if any company is thinking of running one, I would advise them to make every single condition clear to the customer and take copy advice from the onset.”
Crawford adds that the ASA even revised its code as a result of the Hoover affair. It now states that “no promotion should bring the promotions industry into disrepute”.
“Hoover has publicly admitted it made a mistake,” insists Knight. “We continually make the point that this promotion ended in 1993 and I am not prepared to hash over old ground. This is over and done with.”
But for those assembled in St Helens next Wednesday, and thousands of others who may seek compensation if the decision goes against Hoover, it is far from over.