Who: The Committee of Advertising Practice (“CAP”) and the Broadcast Committee of Advertising Practice (“BCAP”)
Where: UK
When: 4 November 2014
Law as stated at: 13 November 2014
What happened:
CAP and BCAP have opened a consultation on making changes to the CAP and BCAP Codes based on recent changes to consumer law. The first of which relates to distance selling rules and the second of which relates to changes to sales promotion rules.
1. The distance selling rules
The Consumer Protection (Distance Selling) Regulations 2010 (the “DSRs“) were replaced on 13 June 2014 by the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (the “CCRs“) but the CAP and BCAP Codes still reflect DSRs best practice.
The current provisions sit in sections 9 and 8 of the CAP and BCAP Codes respectively and relate to issues such as including the main characteristics of the product and making the marketer’s identity clear in distance selling marcoms.
CAP and BCAP have proposed to remove the existing rules rather than replace them for the following reasons:
i. the DSRs implemented a minimum harmonisation directive and so additional and best practice requirements could be established, but the CCRs implement a maximum harmonisation directive so the CAP and BCAP Codes cannot impose additional rules;
ii. the CCRs require that certain pre-contractual information must be provided to consumers but it does not necessarily need to be set out in advertising.
iii. post-contractual information requirements of the CCRs are only relevant to advertising where the trader breaches statements made in their ads. However, as CAP says “[in] such cases, the ASA would look at these under its “Misleading advertising” rules” which are in section 3 of the Codes.
iv. CAP and BCAP have had a limited role in enforcement of the distance selling rules; from 2011-2013 the ASA resolved 600 non-broadcast cases under the distance selling rules and only 10 broadcast cases. Under the CCRs, there is a duty on the local weights and measures authorities (trading standards) to consider complaints about breaches of the CCRs and so removal of the distance selling rules from the CAP and BCAP Codes would not leave a gap in the regulation and enforcement of the CCRs. Therefore, CAP “considers it is proportionate to remove rules which do not mandate the content of advertising”.
The consultation is open now and ends on 13 January 2015.
2. The sales promotion rules
Section 8 of the CAP Code sets out rules on sales promotions and CAP have proposed some changes to ensure that they remain consistent with current interpretation of the European Unfair Commercial Practices Directive (the “UCPD“, implemented into UK law by the Consumer Protection from Unfair Trading Regulations (the “CPRs“).
The changes include the following:
i. in relation to the rule that promoters must be able to demonstrate they have made a reasonable estimate of likely response, currently promoters must be able to demonstrate they were capable of meeting that response; the proposed change on the other hand would add an alternative that promoters can demonstrate “that consumers had sufficient information to make an informed decision on whether or not to participate”. This is because if promoters ensure they are transparent about likely demand, and consumers are able to make an informed transactional decision on this basis, this will minimise consumer disappointment and likely meet the CPRs to maintain the reputation of the promotions industry;
ii. In relation to the requirement that “promoters must avoid complex rules”, CAP proposes this is changed to a requirement that “Promoters must avoid rules that are too complex to be understood by potential participants”. This is because in the light of UCPD, “CAP acknowledges that ‘complex’ rules might not necessarily be impermissible, depending on the circumstances”; and
iii. the rule against changing closing dates unless outside of the reasonable control of the promoter is proposed to be changed so that this is only prohibited where the closing date is changed “in a way that is likely to disadvantage the consumer”. CAP says this is likely to reflect the UCPD and that the ASA is used to dealing with such issues.
The consultation is open until 16 December 2014.
Why this matters:
The consultations give marketers the opportunity to give their view on:
i. whether the distance selling rules in the CAP and BCAP Codes should be removed – which would result in less scope for inconsistencies between the CCRs and existing CAP and BCAP Code rules and one less layer of regulation in the area for marketers; and
ii. numerous changes to the sales promotion rules in the CAP Code – which would likely impact the promotion rules and the risk analysis that marketers conduct in relation to compliance.
Marketers should consider seizing the opportunity to influence change in these areas as they are likely to affect numerous marketers on a day-to-day basis.
