Who: UK Committee of Advertising Practice (CAP)
Where: United Kingdom
When: 30 March 2023
Law stated as at: 18 April 2023
CAP has published a new Enforcement Notice on digital advertising of ‘free trials’ and promotional offer subscription services. The notice applies to subscription services that promote ‘free trials’ or other promotional offers online, which continue into a paid subscription after the trial period, unless cancelled. CAP provides guidance, relevant rules of the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code) and examples of best practice to help businesses comply with its rules when advertising “free trial” or promotional offers. Namely, businesses should avoid “subscription traps” – situations where consumers are enrolled into a paid subscription without realising it. Such “subscription traps” potentially arise when businesses fail to provide consumers with sufficient information or omit significant conditions when advertising such offers.
CAP provides the following examples of significant conditions for such ads:
- Whether a paid subscription starts automatically (after the trial) unless cancelled.
- The extent of the financial commitment if the subscription is not cancelled (during the trial).
- Any other significant conditions: for example, costs to participate.
Additionally, such significant conditions should be placed appropriately, meaning they should be “immediately visible, prominent and distinct from other information”
Additionally, such significant conditions should be placed appropriately, meaning they should be “immediately visible, prominent and distinct from other information”.
Therefore, such ads should inform consumers in a clear way about all significant terms of the offer which are important for consumers to make a decision. For example, the phase “T&Cs apply” is not sufficient, and the conditions of the offer should be outlined in the ad itself in a prominent way.
CAP has provided a deadline until 27 April 2023 for businesses to comply with its guidance outlined in the notice. After this date CAP intends to take targeted enforcement action against services which fail to comply.
Why this matters:
“Free trials” and promotional offers for subscription services are effective tools to engage consumers with a service. However, it is important to bear in mind the rules that apply to advertising of such offers to avoid misleading consumers. Adhering to the relevant CAP’s guidance set out in the enforcement notice will help businesses both comply with the relevant rules and gain trust of their consumers.