Who: Committee of Advertising Practice (“CAP”), author of the UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (the “CAP Code”)
Where: UK
When: 1 May 2015
Law stated as at: 6 May 2015
What happened:
On 1 May 2015 CAP’s new rules relating to sales promotions came into force. The rules ensure that the CAP Code complies with and reinforces the European Unfair Commercial Practices Directive (UCPD) and the Consumer Protection from Unfair Trading Regulations (CPRs). In general these amendments allow promoters greater flexibility whilst ensuring that consumers are supplied with sufficient information to make an informed decision over whether to participate. The underlying principles are that promotions must not mislead, harm or offend an audience and that participants must be treated fairly are unchanged.
- Availability – rule 8.9 has been amended so that promoters must show that they made a reasonable estimate of the likely response to a promotion and either that they were capable of meeting the response or “that consumers had sufficient information, presented clearly and in a timely fashion, to make an informed decision on whether or not to participate – for example regarding any limitation on availability and the likely demand.” Additional wording has also been added to rule 8.17.8 in relation to the availability of promotional packs and that, “Any limitation of availability should be sufficiently clear for a consumer to assess whether participation is worthwhile”. These changes give flexibility to promoters who may now run promotions where demand may outstrip supply, provided that consumers are sufficiently informed.
- Purchase linked promotions – additional wording has been added to rule 8.11 to ensure that promoters should not encourage consumers to make purchases linked to a promotion if the number of promotional items is limited “unless the limitation is made sufficiently clear at each stage for the consumer accurately to assess whether the participation is worthwhile.” Again, this change gives promoters greater flexibility.
- Significant information – rule 8.17 has been amended so that promoters must include all significant information as well as “information where the omission of such conditions or information is likely to mislead.” Although this theoretically widens the amount of information that should be included, on a practical level, promoters should already be complying with this as any such omission would be contrary to the principle not to mislead consumers and also potentially a misleading omission creating exposure to enforcement action by Trading Standards under the CPRs.
- Closing dates – the rule here has been altered from:
“Unless circumstances outside the reasonable control of the promoter make it unavoidable, closing dates must not be changed. If they are changed, promoters must do everything reasonable to ensure that consumers who participated within the original terms are not disadvantaged.” to read:
“closing dates must not be changed unless unavoidable circumstances beyond the control of the promoter make it necessary and either not to change the date would be unfair to those who sought to participate within the original terms, or those who sought to participate within the original terms will not be disadvantaged by the change.”
CAP justified this amendment by stating that the rule needed to reflect the limited circumstances where CAP may consider it acceptable to change a closing date. However, there is no further information on these particular circumstances and the accompanying materials state that CAP will issue guidance to support this in due course.
- Difference between gifts and prizes – additional wording has been added to rule 8.19 stating that, “The distinction between prizes and gifts, or equivalent benefits, must always be clear. Ordinarily, consumers may expect an item offered to a significant proportion of participants to be described as a “gift”, while an item offered to a small minority may be more likely to be described as a prize.” This new wording is less prescriptive than the previous rule whilst continuing to ensure that consumers are not mislead by the terminology.
Further CAP Guidance, published on 30 April 2015, supplements these changes and states that promoters should remember six key things when running a promotion; namely:
- Anyone running a promotion is responsible for that promotion.
- The terms and conditions for the promotion must not be changed or altered. The guidance gives the following examples that would be contrary to the rules: (a) failing to run the promotion due to a lower response rate; and (b) excluding entrants without evidence of cheating.
- The promoter should also make key restrictions clear so that people looking at the marketing communication know whether they are eligible to participate.
- The terms and conditions should not exclude key information.
- The prize must be awarded and if the promoter is unable to award the original prize, then they should award a reasonable equivalent.
- The promoter must be clear about availability.
Why this matters:
Although these changes are important and will undoubtedly impact on marketers who regularly run promotions, the underlying principles remain that marketing communications must not mislead and promotions must be administered fairly. Some of these amendments also require further guidance from CAP (e.g. the circumstances where closing dates can be altered) before marketers will be able to accurately assess their impact.
