Unfair trading or marketing gloss?
Many companies are unaware of recent changes in advertising and marketing regulations – and how these affect not just promotions, but websites too.
- by Peter Labrow
Recently, I attended an excellent training course on two new very important pieces of legislation – Unfair Trading Regulations 2008 and Misleading Marketing Regulations 2008. These came into force in May of 2008.
I know that this sounds like it’s going to be a dull subject for a blog, but if you get on the wrong side of these regulations, life could get pretty exciting, but not in a good way.
That’s because getting on the wrong side of the new regulations is a criminal offence – company directors face a fine of up to £5,000 in the Magistrates’ Court and (take a deep breath) up to three years in prison and unlimited fines in the Crown Court. Sounds like something you should be taking seriously, then.
It’s this last part which should sharpen the minds of anyone creating content for websites and e-mail campaigns. It’s often thought that the Advertising Standards Authority (ASA) provides the only blocks on outrageous advertising and that something which falls foul of the ASA will result in nothing more serious than gently slapped legs. Not so. The key difference between the new regulations and the old is that they make misrepresentation a criminal offence.
There are some real traps in the new legislation that will catch out the unwary. It’s really important that anyone preparing copy for a website or e-mail campaign has some knowledge of what isn’t allowed, otherwise you could find yourself in hot water.
I’m not going to go through the whole of the new legislation, but just cover some of the more interesting points.
- Claiming to be a signatory to a code of conduct when the trader is not, or displaying a trust mark or quality mark that hasn’t been earned, is an offence. I’ve seen plenty of companies slap accreditation badges on their websites – now it’s a criminal offence. Likewise, if you have your own code of conduct, and claim that it’s approved by a public (or other) body, then that’s an offence too. It’s also an offence to claim that another body endorses your company, its products or services when it doesn’t.
- The good old buy one, get one free (BOGOF) offer is still OK, if the price of the single item is the same as it was before the offer, and that there isn’t an additional cost to having the two items that isn’t there for the one. For example, you can’t say that it’s buy one get one free if you then charge an administration fee: free means unencumbered by cost.
- If you have an offer that contains a free item (say, an MP3 player free with a product or service) then there shouldn’t be a charge to ship it unless it can be shown to be an ‘unavoidable cost of participation’.
- You can’t mislead someone that the offer is special for them, if it isn’t. For example, if you market a discount for customers who have bought product x, and other customers can get the same discount, then you’re breaking the law.
- You can’t play unduly on people’s fears – so, as an example, if you’re a security company, you could push things too far by saying ‘without our product, x could happen’.
- False prizes: you can’t begin a promotion telling people that they have won a prize, if they haven’t.
- It’s not all in the actualities of the marketing either. If your design or wording creates an impression that can be shown to affect decision-making, then it could be illegal. For example, a poster showing ‘free sunglasses’ where it’s not clear that to get the free sunglasses you need to buy another, regular pair of spectacles. Or it could be in the type of illustration shown. If you’re selling eggs from battery chickens, and you show a picture of a nice open farmyard, then it could be reasonably shown that you are using the picture to deceive – and that the picture itself (even if supported by alternative wording) could affect a buying decision.
- Here’s an interesting one. As a trader, you can’t pose as a consumer. This means that it’s an offence to, for example, put seemingly objective endorsements from customers on your website. I say that it’s interesting, because this seems to be a growing practice, with customers using social networking, product reviews and the like to give themselves endorsements.
- Falsely stating that a product or service will only be available for a specific time, or available at an offer price for a specific time is no longer on. If a customer can get that product or service at the same price at other times, then you’ve broken the law.
- Here’s another interesting one. You can’t present any rights given to the customer in law as a distinctive feature of the offer. Under law, consumers have certain protections – for example, under the Sale of Goods Act, a product should be of merchantable quality, which is to say it should perform the job expected of it. So, the soles shouldn’t fall off a pair of shoes in the first few days of owning them. Therefore, in this example, you can’t make a feature of people returning goods because they don’t do the job – but you could still offer a satisfaction guarantee.
- You can’t market an offer in one language and then provide the service (or even after-sales support) in another.
- Advertorials need to be clearly identified as such – as it’s now an offence to use editorial content in the media to promote a product or service where the trader has paid for the pages in use.
- Your promotion can’t look like an invoice – I’m sure we’ve all had faux invoices from certain Internet companies which are actually mailers promoting their services in a way that looks like you’re already a customer. Now, they’re illegal, not just dishonest.
- Unsolicited e-mail (spam) gets another shot taken at it with the new legislation, which makes it an offence to make persistent unwanted solicitations by telephone, fax, e-mail or indeed any other remote media (such as SMS).
- Finally, one which I’m sure we will have all experienced in some way: you can’t tell a customer that your job or livelihood is in jeopardy if they don’t buy the product or service. If you’ve had someone saying that they need to mark you as ‘excellent’ on a quality survey or assessment sheet or they will have ‘problems with head office’ or some such, then that’s pretty much in the same boat.
Since I’ve only outlined some of the regulations, you can tell that they are pretty exhaustive. But, by and large, they are good – and will help buyers. At the moment, the regulations are new, and it isn’t hard to spot lots of companies who are breaking the law, perhaps unintentionally.
Another new change is that, previously, only consumers could make complaints. Now, that isn’t the case – competitors can now also make complaints. This is a good thing, as they are often better placed to see when someone is trying to fudge things or pull the wool over customers’ eyes. What the law is looking for is the effect the marketing will have on the ‘average consumer’ – ie, will it influence a buying decision in the public at large.
The whole point is to create harmonised advertising and marketing regulations across the EU, though there are some notable differences in a few countries. Take the use of the word ‘free’ for example. In the UK, we’re used to seeing promotions such as ‘buy this item and get a free pen’ – but in some countries (Germany and Sweden) that’s against the law. Why? Because in those countries, the pen isn’t ‘literally’ free – you have to buy something else to get it.
The new legislation replaces:
- The Fair Trading Act 1973
- The Control of Misleading Advertisement Regulations 1988
The new legislation augments and doesn’t replace:
- The Consumer Protection Act 1987
- The Supply of Goods and Services Act 1982
- The Sale of Goods Act 1979
- The Unfair Contract Terms Act 1977
The bottom line is that if you are preparing e-mail campaigns or writing copy for website pages, you need to find out enough about the new regulations to keep on the right side of them. You also need to be sure that where you are using an external copywriter, that the copywriter is aware of them.
When you are running specific promotions, it’s worth getting a lawyer to review them. It doesn’t cost much (in the grand scheme of things) and it can save you a lot of bother. We’d recommend our legal partners, Singletons, who (as a guide price only) would charge perhaps £80-£250 to review a campaign.
Remember also, we’re not lawyers. You need to check out your own specific promotions and not treat this blog as legal advice!