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OFT obtains assurances from South African prize draw promoter

140/07    11 October 2007

A South African prize draw promoter has given assurances to the OFT that it will no longer send misleading prize draw mailings to UK consumers.

Gateway Direct, operating under the name 'Beverly Hills Jewelry', sent 760,000 prize draw mailings to UK consumers between March and July 2007. The OFT considered that the mailings misled recipients into believing they had won a £20,000 cash prize when in fact they had only been entered into a draw with a small chance of winning the prize.

The mailings urged consumers to respond immediately and encouraged them to place an order for jewellery from an accompanying brochure when claiming their prize. Over 22,000 UK consumers placed orders for jewellery.

The OFT also considered that two further Gateway Direct mailings misled recipients into thinking they had won a major prize. Sent out under the name 'Prize Verification Services' and 'Award Distribution Centre', nearly 40,000 consumers responded to these mailings by sending a processing fee of up to £10 to claim their prize.

After being contacted by the OFT, Gateway Direct agreed that they would not send any further prize draw mailings to UK consumers.

Mike Haley, Head of Consumer Protection at the OFT, said:

'The OFT will continue to act to stop misleading prize draw mailings. We advise consumers to think carefully before responding to mailings that claim they have won large cash prizes.'

Consumers who are unsure about claims being made in prize draw mailings should contact Consumer Direct for clear, practical advice on 08454 04 05 06 or visit the Consumer Direct website before they part with any money.

NOTES

1. Research commissioned by the OFT involving 11,200 interviews found that 380,000 UK consumers fall victim to misleading prize draw and sweepstake offers every year, losing £60 million per annum.

2. Details of previous OFT's actions against misleading prize draw promotions can be found in press releases 100/07, 160/06, 125/06, 105/06, 41/06, 234/05, 220/05, 95/05, 208/04.

3. Consumer Direct is a telephone and online consumer advice service funded by government and managed by the Office of Fair Trading. It offers clear, practical and impartial advice and information about consumer rights.

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