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Codes and Law   The Unfair Trading Regulations  May 2008

This new law seeks to provide a modern, simplified consumer framework, replacing lots of older laws, and being common across Europe. Promoters will most likely be formally responsible, but agencies will normally also be liable under their contracts of service with clients . The Act bans “practices which are contrary to the requirements of professional diligence”, those that are misleading or aggressive plus 31 specified practices are banned under all circumstances.

Those likely to be affected should seek formal legal advice, but the key ones for marketers to consider are:

 

The Act

Grade

The Implications for Marketers

2. Displaying a trust mark, quality mark or equivalent without having obtained the necessary authorisation.

Low

Make sure all endorsements are approved

6. Making an invitation to purchase products at a specified price and then:

(a) refusing to show the advertised item to consumers; or

(b) refusing to take orders for it or deliver it within a reasonable time; or

(c) demonstrating a defective sample of it,

with the intention of promoting a different product

High

Ensure that you have sufficient stock of an item before advertising it.

 

7. Falsely stating that a product will only be available for a very limited time, or that it will only be available on particular terms for a very limited time, in order to elicit an immediate decision and deprive consumers of sufficient opportunity or time to make an informed choice.

Low

Ryanair and Easyjet both suffered issues with this in Spring 2008.

10. Presenting rights given to consumers in law as a distinctive feature of the trader’s offer.

Low

Avoid highlighting what is common or taken as norm

11. Using editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable by the consumer (advertorial). This is without prejudice to Council Directive 89/552/EEC (1).

High

Ensure that sponsorship or advertorials are clearly separated from editorial.

16. Claiming that products are able to facilitate winning in games of chance.

Low

Avoid excessive claims – frequently used in direct mail

18. Passing on materially inaccurate information on market conditions or on the possibility of finding the product with the intention of inducing the consumer to acquire the product at conditions less favourable than normal market conditions.

Low

Examples would be “ buy now, before the price rise” or “only available in this shop”

19. Claiming in a commercial practice to offer a competition or prize promotion without awarding the prizes described or a reasonable equivalent.

High

Ensure that your fulfilment procedures are 100% reliable. Have the prizes in stock before you start.

20. Describing a product as ‘gratis’, ‘free’, ‘without charge’ or similar if the consumer has to pay anything other than the unavoidable cost of responding to the commercial practice and collecting or paying for delivery of the item.

High

Free is a crucial word for marketers. ISP advice, based on guidance from the Government (BERR & OFT) is that genuinely free gifts with a purchase will not be prevented. It is primarily aimed at obvious abusers of the phrase.

 22. Falsely claiming or creating the impression that the trader is not acting for purposes relating to his trade, business, craft or profession, or falsely representing oneself as a consumer.

 High

 This effectively outlaws buzz marketing and all forms of marketing for a brand that purport to come from someone other than the brand – eg “consumer” blogs.

28. Including in an advertisement a direct exhortation to children to buy advertised products or persuade their parents or other adults to buy advertised products for them.

High

ASA rules already limit advertising to children this takes it a stage further. Children are under 12.

31. Creating the false impression that the consumer has already won, will win, or will on doing a particular act win, a prize or other equivalent benefit, when in fact either:

— there is no prize or other equivalent benefit, or

 

— taking any action in relation to claiming the prize or other equivalent benefit is subject to the consumer paying money or incurring a cost.

 

Low

Avoid excessive claims. Do not use the term “instant win” unless one will know that one has won and what one has won at the time of entering. Unique codes would not meet this requirements.

Recent (June 08) advice from the OFT would indicate thatfor the purpose of this Act if a winner ( winners only, not entrants)  has to call up or send in to receive their prize, or otherwise incur a cost, that the cost of this should be reimbursed to them with their prize.  This is at odds with the Gambling Association which does not regard a standard rate phone call or basic text as a payment to enter a game of chance.,