Newsroom

OFT stops Dutch marketing company from sending misleading mailings to UK consumers

95/05    25 May 2005

The OFT has used its cross-border enforcement powers to secure binding undertakings preventing a Dutch marketing company from publishing and distributing misleading mailings to UK residents.

D.C. Direct Communications Venk BV created, designed and distributed promotional mailings for companies selling goods and services such as healthcare products and participation in the German lotto. Some of mailings that caused UK consumers most concern included titles such as ABC Club, ILM Club, Top Direct, Fitanova and GLG Winners Club.

The OFT received numerous complaints about the mailings, which appeared to notify recipients of a large cash win (typically £5,000 to £10,000) or other valuable prizes such as a car or holiday. To collect the prize the mailings instructed recipients to complete a form with their bank details and return it immediately – this was usually an agreement to play in the German Lotto or to buy healthcare products.

The OFT believed the mailings were misleading as they gave the impression that the recipient had been contacted regarding a substantial prize specifically held for them, when in fact they had only been entered into a prize draw and were very unlikely to have won any substantial prize.

The OFT has received undertakings from Direct Communications that it will no longer publish advertisements which, contrary to the UK and Dutch legislation implementing the EU Misleading Advertisement Directive (see notes 2 and 3), give the misleading impression that:

• the recipient has been contacted regarding a substantial prize specifically held for them
• a prompt response is needed to secure a prize
• official documents relating to the prize are enclosed
• entry to a prize draw or award of prizes is dependent on purchasing goods or services
• the recipient is to receive a substantial prize or significant advantage when in fact the recipient only has the opportunity of taking part in a prize draw or sweepstake.

If the undertakings are breached the OFT can proceed directly to the Dutch courts to seek an injunction to enforce compliance with the consumer legislation.

Sir John Vickers, OFT Chairman, said: 'This company was behind a large number of highly misleading mailings sent to UK residents. This case shows how the OFT uses its powers overseas as well as at home to protect the interests' of UK consumers.'

NOTES

1. Part 8 of the Enterprise Act 2002 gives effect to the Injunctions Directive in the UK and empowers the OFT to take action against businesses in the European Economic Area that are infringing certain consumer protection legislation where this affects the collective interests of consumers. The OFT will normally ask the relevant community enforcer to take action to achieve a cessation of the breach identified. However, the OFT is able to take direct action in another EU member states in appropriate circumstances.

2. Council Directive 84/450/EEC on Misleading Advertising provides protection against misleading advertisements. Under the Injunctions Directive 98/27/EC the OFT is empowered to enforce the misleading advertising laws of another member state and apply to their courts for an injunction to end continued publication of misleading advertisements. Under the Directive, an advertisement is misleading if it 'in any way, including its presentation, deceives or is likely to deceive the persons to whom it is addressed or whom it reaches and which, by reason of its deceptive nature, is likely to affect their economic behaviour or which, for those reasons, injures or is likely to injure a competitor'.

4. The OFT successfully took action through the Belgian courts in 2004 preventing Belgian company D Duchesne SA sending misleading mailings to UK consumers (see press release 208/04).

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