Newsroom

Misleading prize draw stopped by OFT action

90/05    20 May 2005

Prize giveaway promoter Crystal Clear Marketing Ltd (CCM) has given binding undertakings that it will not publish misleading mailings following action by the OFT.

CCM sent a million letters to people as part of its Crystal Clear promotion which gave the impression that recipients had won a competition and had been awarded a major prize. The mailings stated that 'your entry in to the Crystal Clear promotion has been successful' and that 'you have definitely been selected' to receive one of nine main prizes, including a VW Beetle, Plasma TV and a digital camera.

In reality almost everyone who responded to the message received a 'giveaway' item, in this case a mini digital camera. However this was not the same make or model as the camera pictured on the mailing.  Instead it was an inferior, cheap mini digital camera.

To claim their 'prize' the 'winners' were referred to a 24-hour claim line. Only the small print explained the cost of the telephone call (£1.50/min with calls lasting up to six minutes) and the handling and delivery charge of £14.95, which consumers would have to pay for most prizes, including the digital camera. Over 55,000 people phoned the premium rate line.

The OFT began investigating CCM following a number of consumer complaints. Those who complained had no knowledge of ever having entered the 'competition'.

The OFT sought undertakings under the Enterprise Act from CCM and its officers Mark James and Hanna Cooke on the grounds that the mailings were misleading and breached the Control of Misleading Advertisements Regulations. They have undertaken that they will not publish materials giving a misleading impression that:

• recipients have previously entered one of the promoter's promotions
• recipients have won a major prize when the majority of recipients qualify to receive the 'giveaway' item
• each item listed in the promotion is a major prize and they are all of equal status when that is not the case
• a particular item is of a higher specification than is the case.

The OFT worked closely with the Advertising Standards Authority, ICSTIS and Trading Standards in collecting evidence for this case.

Sir John Vickers, OFT Chairman, said:

'The claims made in the mailing plainly misled consumers into paying for a low value item on the pretext that they had won a major prize in a draw. We will take action to protect consumers wherever we find promotions of this nature.'

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.

NOTES

1. The promotion ceased after ICSTIS fined CCM £2,000 and barred them from access to phone numbers used in this promotion for 12 months.  The OFT took its action in order to deal with the future conduct of those involved.

2. 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 who break the law in ways that harm the collective interest of consumers, including breaches of 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. 

3.  The Control of Misleading Advertisements Regulations 1988 (CMARs) came into force on 20 June 1988 implementing an EC Directive on misleading advertising. The OFT's powers under the CMARs are triggered if an advertisement is 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 is 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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