201/05    26 October 2005

Customers buying items from a number of mail order catalogues will not in future receive demands for payment for unsolicited membership of the World For Less Ltd discount marketing scheme, following action by the OFT.

Customers buying goods from some mail order catalogues, particularly 'Home Shopping Selections' and 'Scientific Golf', placed their order by telephone with a fulfilment company, US Euro Link. On placing their order with US Euro Link, many customers were offered a one month free membership of the World For Less scheme giving them discount vouchers for a number of high street outlets. The World For Less scheme was provided to US Euro Link under contract. 

Customers who did not cancel their membership within the free one month period were automatically enrolled for 12 months membership, at a cost of £79.95. This sum was deducted from the credit or debit card used by the customer to buy their mail order goods.

The OFT has received a number of complaints from customers who said they had not been told about the scheme when ordering their goods and had paid the annual membership fee without realising. According to the complaints, consumers were given inadequate information about the scheme, making the provision of membership to it an unsolicited service.

It is a breach of the Distance Selling Regulations (DSRs) to demand payment or to claim a right to payment for the supply of unsolicited goods or services to consumers.

The companies have, without accepting that they were in breach of the DSRs, given undertakings that they:

• will not charge a sum to a customer's credit or debit card without their express authority and the full knowledge of the purpose, amount and timing of the payments without having reasonable cause to believe that they have a right to payment
• will not promote similar schemes, which fail to give customers full details of the scheme including that it is a negative option marketing scheme and that customers have to choose to opt out.

If any of the parties breach the undertakings the OFT could seek an injunction against them in the High Court. Failure to obey an injunction could result in proceedings for contempt of court.

Christine Wade, Director of Consumer Regulation and Enforcement at the OFT said:

'Inertia selling removes consumer choice. Consumers must receive clear and adequate information to allow them to make reasoned decisions about whether to purchase and before they are committed to payments upfront.'

NOTES

1. Undertakings were given by The World For Less Ltd, US Euro Link plc, Home Shopping Selections Limited and Scientific Golf Limited.

2. The World For Less Limited registered office is: 1 Saxon Road, Faversham, Kent  ME13 8QA.

3. US Euro Link registered office is: 7/8 Eghams Court, Boston Drive, Bourne End, Buckinghamshire SL8 5YS.

4. Home Shopping Selections Limited registered office is: Euro House, Cremers Road, Sittingbourne, Kent ME10 3US.

5. Scientific Golf Limited registered office is: 7/8 Eghams Court, Boston Drive, Bourne End, Buckinghamshire SL8 5YS.

6. The OFT sought undertakings under Part 8 of the Enterprise Act 2002. The Enterprise Act improves consumer protection by giving enforcers strengthened powers to obtain court orders against traders that breach a range of consumer legislation; covering activities such as misleading advertising, misleading price indications, lotteries, sale of goods and services, underage sales, estate agency, misleading health claims, trade descriptions, mock auctions, timeshare, unfair terms in consumer contracts, doorstep selling, distance selling, package travel and consumer credit. 

7. The Consumer Protection (Distance Selling) Regulations 2000, commonly referred to as the Distance Selling Regulations (DSRs), came into force on 31 October 2000 and have been amended with effect from 6 April 2005 by the Consumer Protection (Distance Selling) (Amendment) Regulations 2005. For most goods and services the DSRs  provide additional rights to consumers in the area of home shopping (where transactions take place under an organised scheme for distance selling with no face to face contact, such as online sales, mail order and telesales). These additional rights include: clear information, an unconditional right to cancel and further protection against fraudulent use of a payment card. The DSRs provide that consumers who receive unsolicited goods or services have no obligations to pay for them.

8. Kent Trading Standards Service provided support and assistance to the OFT in gathering complaint information for this case.