Cardiff City FC’s “Golden Ticket” season ticket ad campaign allowed fans to buy their tickets early, promising funds raised would go into buying new players in the January 2010 transfer window. But the club was under a transfer embargo at the time. Cue unfair commercial practices proceedings as Stephen Groom reports.
Topic: Consumer protection
Who: Cardiff City Football Club, Peter Ridsdale and Cardiff County Council Trading Standards
Where: Cardiff Magistrates Court
When: May 2011
Law stated as at: 3 June 2011
What happened:
In December 2009, Cardiff City Football Club, then chaired by Peter Ridsdale, launched an advertising campaign promoting early sales of season tickets for the 2010-2011 season.
The "Golden Ticket" scheme included a refund on promotion to the Premier League (sadly not achieved though the play-offs were reached) and a five year price freeze. Chair Peter Ridsdale then made an announcement promising that revenues from sales would be spent on strengthening the squad.
The catch was that at that time bringing in new players was going to be a challenge. This was because the Club was operating under a transfer embargo due to unpaid taxes. This embargo wasn't lifted until after the January 2010 transfer window, so new players were signed.
Disappointed season ticket buyers complained to local trading standards and after due enquiry, criminal charges were brought against Ridsdale. Neither the Club itself nor the other Board Members who approved the scheme were prosecuted, only Ridsdale. There is no suggestion that he made any personal gain out of the scheme and he vigorously denies the charges.
It is alleged that Ridsale committed offences under the Consumer Protection from Unfair Trading Regulations 2008 ("CPUTRegs") by failing to notify fans of the transfer embargo.
This was a misleading omission under Regulation 6 of the CPUTRegs, Cardiff Trading Standards alleged. As such it was an unfair commercial practice, the charge sheet said, which (in the argot of the CPUTRegs) was likely to distort the economic behaviour of the average fan, causing or being likely to cause "the average consumer to take a transactional decision he would not have taken otherwise."
Cardiff Trading Standards are pressing for the case to be heard at a Crown Court. At the last count, the case had been adjourned to 22 July 2011.
Why this matters:
Under the CPUTRegs it is not only businesses indulging in allegedly unfair commercial practices that face the risk of criminal prosecutions.
Regulation 15 (1) states that "where an offence under these Regulations committed by a body corporate is proved to have been committed with the consent or connivance of an officer of that body or to be attributable to neglect on his part, the officer as well as the body corporate is guilty of the offence and is liable to be proceeded against and punished accordingly"
Under Regulation 15 (2) this extends to a "director, manager, secretary or other similar officer" and a person purporting to act as any of these.
Convicted individuals face not just fines but also a term of imprisonment of up to 2 years.
This case follows hard on the heels of 13 month jail sentences being handed down in respect of another allegedly CPUTRegs-breaking marketing promotion in the case of Dorset Trading Standards vs Mears and Lapland New Forest Ltd. (see Marketinglaw report at http://www.marketinglaw.co.uk/articles/2011/13529.asp).
Advertisers and their directors and managers should take heed that where the enforcement authorities deem it appropriate, they will not hesitate to institute criminal prosecutions against responsible individuals as well as their businesses over misleading ad practices.
