Newsroom

OFT acts against misleading premium rate prize giveaway

55/05    29 March 2005

The promoters of a premium rate prize competition called Jackpot Promotions have given undertakings that they will not use misleading advertising to promote such competitions, following action by the OFT. 

John Timothy Kitching, Alix Faye Thornton and Heaven Communications Limited, trading as Jackpot Promotions, sent unsolicited automated telephone messages to over seven million consumers informing them that they had entered a competition in the previous year and that they had won either: a Volkswagen Beetle worth £15,000, a plasma screen television, a DVD player, a PC, £6,000 cash or an all inclusive Bahamas cruise. To claim the prize consumers had to call a premium rate phone number at a cost of £1.50 per minute. Over 15,500 people responded.

In the OFT's view, the automated telephone message was misleading as it gave the impression that the recipient had been lucky and won a major prize. In fact nearly everyone who responded to the message received a 'giveaway' item of a cruise voucher with stringent terms and conditions attached. Furthermore, recipients of the message had not previously entered one of the promoter's own competitions: the promoters had bought their telephone numbers from a specialist database.

The OFT also obtained evidence that the promoters of the competition, John Timothy Kitching, Alix Faye Thornton and Heaven Communications Limited, were involved in other similar misleading premium rate promotions advertised via automated telephone calls and an unsolicited mailing.  

The undertakings address the future conduct of the company and its officers, who have undertaken, among other things, that they will not:

• give the misleading impression that recipients have previously entered one of the promoter's own competitions or that recipients are lucky to win a prize when in fact the majority of participants qualify to receive an item
• give the misleading impression that each item listed in a promotion is a major prize when that is not the case
• include items that are likely to be received by the majority of participants in a competition within the list of major prizes
• fail to provide full and accurate descriptions of the items available in any competition including any significant terms and conditions.

If any of the undertakings are breached the OFT could seek a court injunction. Failure to obey a court injunction could result in proceedings for contempt of court.

The OFT worked closely with ICSTIS and several local trading standards services in taking action on this case. 

Sir John Vickers, OFT Chairman, said:

'These were highly misleading telephone messages. Consumers should not respond to any unsolicited messages telling them that they have won a major prize. Action will be taken to stop this type of deceptive practice.'

NOTES

1. The undertakings were signed on 23 February 2005 by John Timothy Kitching, Alix Faye Thornton and Heaven Communications Limited (registered office: Apartment 81, The Quays, Concordia Street, Leeds, West Yorkshire LS1 4ES).

2. The Independent Committee for the Supervision of Standards of Telephone Information Services (ICSTIS) is the industry-funded regulatory body for all premium rate charged telecommunications services. ICSTIS regulates the content, promotion and overall operation of services through its Code of Practice. ICSTIS has previously adjudicated in relation to the Jackpot Promotions competition.

3. The OFT has also taken action against the promoters of a similar scheme called the Purple Rock Giveaway (see press release 02/05).

4. Part 8 of the Enterprise Act 2002 came into force on 20 June 2003. The Enterprise Act improves consumer protection by giving enforcers strengthened powers to obtain court orders against traders that breach a range of consumer legislation; controlling 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. 

5. The Control of Misleading Advertisement Regulations (CMARs) 1988 largely implement EU Directives on misleading and comparative advertising. They aim to protect the interests of consumers and businesses from misleading advertisements and advertisements that make prohibited comparisons. The OFT's main role under the CMARs is to support and reinforce the existing advertising controls exercised by other bodies, not replace them. The OFT will step in where it is in the public interest that an advertisement should be stopped and future misleading advertisements prevented by means of a court injunction against those concerned, or by the threat of it.

To come within the scope of the CMARs, an advertisement must be misleading (i.e. it must deceive or be likely to deceive the recipient and affect their economic behaviour, or for those reasons harm the interests of a competitor), and be published, in connection with a trade, business, craft or profession, in order to promote the supply or transfer of goods or services, immovable property, rights or obligations. The OFT can take action against anyone appearing to be concerned or likely to be concerned with the publication of a misleading advertisement.

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