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OFT obtains injunction against prize draw promoters

143/07    15 October 2007

Following action by the OFT, the High Court has granted an injunction against a prize draw promoter, Heaven Communications Limited, and its two officers John Kitching and Alixandra Thornton. The injunction stops them from publishing misleading prize draw promotions in the UK or within the European Economic Area.
 
The defendants sent a mailing in the name of 'URA Winner' to at least 350,000 consumers. The OFT considered that the mailing misled recipients into believing they had won a major prize when in fact nearly everyone received a low value 'giveaway' item of either a holiday voucher for one person with onerous terms and conditions attached to its use, or a cheap watch.
 
More than 8,300 consumers called a premium rate number to claim their award at a cost of up to £9 per call. A further charge of £12.50 was payable as a 'secure postage fee' for claiming the watch.
 
The defendants were also involved in running, on behalf of a Belize based company called Studio Telecom, a misleading prize promotion sent via automated telephone messages to 100,000 Dutch consumers. Mr Kitching was involved in a further misleading mailing sent out by Studio Telecom under the name 'Signature Holdings'.

The defendants had previously given the OFT undertakings in February 2005 in respect of misleading prize draw promotions. The OFT believed that the defendants had breached those undertakings and misled consumers in further ways. If any of the defendants breach the injunction they may be held in contempt of court, which can carry a penalty of imprisonment or an unlimited fine.
 
Mike Haley, OFT Head of Consumer Protection at the OFT, said:
 
'The defendants have a track record of misleading consumers with their prize draw promotions. Where businesses fail to abide by undertakings the OFT will not hesitate to take court action to protect consumers both in the UK and across Europe.'
 
NOTES

1. The High Court granted the injunction by default on 11 October 2007. The injunction covers both the UK and the rest of the European Economic Area. The injunction was granted under the Enterprise Act 2002 and prevents Heaven Communications Ltd, John Kitching or Alixandra Thornton from continuing to disseminate advertisements which contravene the Control of Misleading Advertisements Regulations 1988.

2. See press release 55/05 for details of the undertakings previously provided to the OFT by the defendants.

3. 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. 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. The cost of calling depends on the tariff you have with your telephone provider.

4. The Control of Misleading Advertisements 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 misleading comparisons. An advertisement is misleading under CMARs if in any way, including its presentation, it deceives or is likely to deceive the person to whom it is addressed or whom it reaches and if by reason of its deceptive nature, it is likely to affect their economic behaviour, or for those reasons injures or is likely to injure a competitor of the person whose interests the advertisement seeks to promote. 'Advertisement' for the purposes of CMARs means any form of representation which is made 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.

5. The OFT can take action against anyone appearing to be concerned or likely to be concerned with the publication of a misleading advertisement. It can apply to the courts for an injunction ordering such persons to comply with the law in future. It may also accept undertakings from those involved in lieu of action.

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