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Press releases 2002 -

OFT stops misleading ads for mailshot schemes

PN 41/02     15 July 2002

Advertisements claiming people can earn up to £50,000 a year distributing mailshots have been stopped following action by the OFT.

A Stop Now Order has been granted in the Bradford County Court against Mr John Christopher Ineson of Skipton, North Yorkshire, and two companies of which he was an officer, Blake Hamilton Limited and Property Associates (U.K.) Limited. The order was made, unopposed, in default of the defendants filing a defence and prevents them from continuing to issue misleading advertising of the type which prompted the original complaints. The order also prevents Mr Ineson from issuing similarly misleading advertising in any other business in future.

Mr Ineson has in the past traded under various names including Business Protection Federation, National Car Care, Davenport Car Care Plan and Chequeflow. Mr Ineson and his companies operated various schemes where consumers paid for the right to distribute mailshots in a particular area promoting business products or services.

The OFT considered that various advertisements used by Mr Ineson were misleading, in that they made false claims about the various businesses that were promoted, for example that they were established or experienced. As a result, those buying the distribution rights were misled about the income they could receive. Individuals, some of whom paid hundreds of pounds to Mr Ineson, were given the false impression by the advertisements that they might earn a high income, either immediately or potentially, which could be anything from £300 per day to £50,000 per year.

In a separate action by West Yorkshire Police, Mr Ineson was convicted of fraudulent trading and obtaining money by deception in connection with various schemes he operated.

John Vickers, Director General of Fair Trading said:

'Our successful court action is a warning to other advertisers who seek to exploit the public by making false and misleading claims about business opportunities'.

NOTES

1. An order was made by Bradford County Court on Wednesday 10 July 2002 under the Stop Now Regulations.

2. Under the Stop Now Regulations, the OFT can apply for a Court order against traders who breach or are threatening to breach certain laws harming the collective interests of consumers. The OFT can seek written undertakings in lieu of court action.

3. The Regulations cover the following areas: misleading and comparative advertising, doorstep selling, timeshare, unfair contract terms, consumer credit, distance selling, package travel, package holidays and package tours, sale of goods rights, TV broadcasting activities and advertising of medicinal products for human use.

4. The Control of Misleading Advertisements Regulations (CMARs) 1988 came into force on 20 June 1988 implementing an EC Directive on misleading advertising. The role of the OFT under the Regulations is to support and reinforce existing controls, not to replace them. The Regulations give the OFT the power to step in if the public interest requires that advertisements complained of should be stopped by means of a court injunction.

5. The OFT can act only when a complaint has been received. To come within its scope an advertisement must be misleading (i.e. it must deceive or be likely to deceive and affect economic behaviour), and be published, in connection with a trade, business, craft or profession, to promote the supply or transfer of goods and services.

6. In this press release the functions of the Director General of Fair Trading (DGFT) under the Regulations are for simplicity described as the functions of 'the OFT'. The Enterprise Bill proposes to replace the office of the DGFT with the OFT, to which would be transferred the DGFT's functions.




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