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OFT stops South African marketer sending misleading mailings

38/08    18 March 2008

The OFT has obtained assurances from a South African marketing agency that they will no longer send misleading mailings to UK consumers.

Turn A Direct, operating under various names such as The Prize Consortium, Fusion Award Network and Door 2 Door Merchandise, sent over 400,000 mailings to UK consumers promoting prize draw and merchandise offers. The mailings encouraged recipients to send a fee of between £14.95 and £24.95 to claim their prize or a parcel of items. Over 15,000 responses from UK consumers were received.

The OFT considered that the prize draw mailings misled recipients into believing they had won a large cash prize when in fact they had only been offered either entry into a draw with a small chance of winning the prize, or the chance to join a lottery subscription service. In one example, a Fusion Award Network mailing gave the misleading impression that the recipient had won £9,000 and requested a 'processing fee' of £21.95 to claim the prize and some bonus earrings. In fact the recipient had only a one in 575,000 chance of winning the prize and could have entered the prize draw for free.

Other mailings gave the misleading impression that a valuable parcel was awaiting delivery upon payment of a release fee, when in fact nearly everyone who responded was only entitled to items of a much lower value, such as jewellery or discount vouchers as part of a merchandise promotion.

After being contacted by the OFT, Turn A Direct stated that while they believed the nature of each promotion was made clear in the rules, they would stop all existing mailings to UK consumers and not issue any further mailings making the same or similarly misleading claims.

The OFT took action following a referral from Surrey Police.

Mike Haley, OFT Head of Consumer Protection, said:

'Consumers should be wary of mailings which give the impression that a big cash prize has been won or that a valuable package is awaiting delivery. Our experience is that consumers will always end up out of pocket and receive something of low value or nothing at all.'

NOTES

1. Turn A Direct published the following mailings: The Prize Consortium, Fusion Award Network, I.D.S. Award Centre, Door 2 Door Merchandise, World Wide Shipping, Targeted Awards Centre, Warehouse 2:U, TIMARC, Burgess & Partners, First Connection, Awards Unlimited, Prize Watch, Global Awards Centre, Integrated Merchandise Solutions and Sovereign Rewards.

2. Turn A Direct's UK freight forwarding agent, Kamino Limited, co-operated with the OFT and agreed that it would no longer export or forward consumer responses to mailings to South Africa or act as a broker clearing incoming shipments.

3. Research commissioned by the OFT involving 11,200 interviews found that an estimated 380,000 UK consumers fall victim to misleading prize draw and sweepstake mailings every year, losing around £60 million.

4. The OFT has previously acted against another South African based prize draw promoter, Gateway Direct. See press release 140/07.

5. 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.

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