In a competitive world every business needs to advertise, else potential customers won’t know where to beat a path to. However, with the need to advertise so comes the obligation to do so fairly and in compliance with the law and rules – especially as there are just so many different ways now to publicise a business and so many ways to fall foul of the authorities.
Consider the trouble that Euro Car Parts Ltd found itself in with the Advertising Standards Authority (ASA) back in May 2022.
A complainant received two emails. One was dated 26 May 2022 and stated “Up to 45% off Car Parts Ends Tonight!” in the subject header. The body of the email contained a countdown timer with text “MID SEASON SALE UP TO 45% OFF CAR PARTS*” and “USE CODE MID”. The conditions stated were:“*Excludes performance parts, gifts, tools & Garage Equipment. Offer Ends 26th May 2022”.
The second email was received on 27 May 2022 and said, “Make a Splash & Save 10% Off Selected Swimming Pools!” in the subject header. The body of the email said “JUBILEE SALE UP TO 50% OFF CAR PARTS*” and “USE CODE BANK”. The terms and conditions stated: “*Excludes performance parts, gifts, tools & Garage Equipment. Offer Ends Ends (sic) 31st May 2022”.
The complainant, who believed the advertised discounts did not represent genuine savings, challenged whether the ads were misleading. The ASA upheld the complaint.
A quick search of the ASA finds plenty of cases that refer to ‘car’ in its rulings. Firms that have fallen foul of the rules include BMW (UK) Ltd (claims about environmental impact, February 2024), Volkswagen Group United Kingdom Ltd t/a Audi (claims about EV range and charging time, March 2024), and Mazda Motors UK Ltd (claims about environmental impact, September 2024).
The rules
Starting with the ASA, the UK’s independent regulator of advertising across all media, it applies two codes of practice – CAP and BCAP Codes – which it uses to regulate non-broadcast and broadcast advertising respectively.
The Consumer Rights Act 2015 (CRA) is also relevant as it sets out consumers’ rights and remedies for defective goods, services and digital content. Under the law, any public statements made by a trader about goods (including those in advertising) will be relevant in assessing whether they comply with the quality standards set out in the CRA. For services, anything that is said or written to the consumer by the provider about it or the service will be deemed to be part of the contract for the service, provided that the consumer takes it into account when deciding to enter the contract or makes any decision about the service after entering into the contract. Deciding to upgrade to a ceramic coating is a good example.
Retailers should also be aware of the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). The premise behind the CPRs is simple: they prohibit any unfair, misleading and/or aggressive commercial practices. Furthermore, they set out 31 ‘blacklisted’ practices that are expressly banned; these include displaying a quality mark without authorisation, falsely claiming to be a signatory to a code of conduct, and falsely stating that a product will be available for a very limited time in order to obtain an immediate decision.
While consumers are aware that they have rights, advertisers should note that businesses have protection too in the form of the Business Protection from Misleading Marketing Regulations 2008 (BPMRs). These prohibit misleading business-to-business marketing communications. It’s important to note that the BPMRs also set out the conditions under which comparative marketing communications (to consumers or businesses) are permitted, these rules are incorporated into the CAP and BCAP codes which the ASA enforces.
Responsibility for enforcement of the CRA and CPRs sits with the Competition and Markets Authority (CMA) and Trading Standards while responsibility for enforcement of BPMRs sits with Trading Standards (though the CMA has the power to enforce the BPMRs if it wishes).
Activities allowed
The CAP and BCAP Codes cover a number of specific areas and traders would be advised to review the relevant code (they can be easily found online) when planning any advertising. As a general rule, adverts must be identifiable as adverts, not be misleading and not likely to cause harm or serious or widespread offence.
The two codes set out particular restrictions depending on, amongst other things, who the advert is targeting and the product that is being advertised. For example, advertising directed at children has specific restrictions attached to it, as does advertising related to gambling, alcohol, food, medical products, motoring or tobacco products. Particular rules also apply to comparative advertising.
Because the CPRs prohibit unfair, misleading and/or aggressive commercial practices, the ASA will take factors identified in CPRs into account when it considers whether a marketing message breaches the CAP or BCAP Code.
The rules make an advert misleading if it is likely to deceive consumers and likely to cause consumers to take ‘transactional decisions’ (i.e. buying, keeping, paying for something or entering into a contract) that they would not otherwise have taken. It’s worth remembering that an advert can mislead not just by including false information, but also by omitting important information that allows the consumer to make an informed decision.
While it’s less likely, there’s another element of the rules that a trader should consider – that of aggression. Indeed, an advert will be deemed to be aggressive if it is likely to significantly impair the average consumer’s freedom of choice through harassment, coercion or undue influence and, as a result, consumers are likely to take transactional decisions they would not otherwise have taken. Factors here include the timing, location, nature or persistence of the advertising and whether the advertiser is aware of any specific misfortune or circumstance of the consumer and exploits that. So, for example, preying on poorer customers by deliberately offering products on not particularly attractive payment plans might be caught here.
An advert may also be deemed to be ‘unfair’ if it goes against the requirements of ‘professional diligence’ – the standard of care expected towards consumers and general principle of good faith in the advertiser’s field of activity – and is likely to materially distort the buying behaviour of consumers in relation to the advertised goods or services.
Other fields
While most consider the rules apply to print, radio and TV, traders would do well to remember that the ASA rules also apply to social media. Adverts and social media posts must be clearly identifiable. So just as with traditional media, the ASA will consider complaints about adverts on social media too. The same applies to promotional activities such as competitions.
Traders who use sponsorship to promote their activities need to note that this too is regulated in the same way as any other form of advert. Here, particular rules apply to the sponsorship of broadcasts, set out in section 9 of the Ofcom code. They require that sponsorship arrangements are transparent; sponsorship messages are separate from programmes and advertising is distinguished from sponsorship; and the broadcaster maintains editorial control over sponsored content and that programmes are not distorted for commercial purposes.
The penalties for breaching the law
With the principles established, the natural question is what happens if a complaint is upheld? The answer is simple: if the ASA finds that an advert breaches the CAP or BCAP Code, it will ask the advertiser to withdraw or change it. Interestingly, although the ASA cannot impose fines, the ASA does have other sanctions at its disposal which include publishing its decisions and asking publishers and media owners to refuse space for an advertisement until it has been changed. It can also refer the advertiser to Trading Standards or the CMA, who can seek an injunction through the courts to prevent the same or similar claims being made in future adverts.
But while some may consider the ASA toothless, it’s not. Engaging in a practice that is banned under CPR’s or placing misleading advertising prohibited by BPMR is not recommended as these are criminal offences punishable by a fine, up to two years in prison, or both. Consumers also have civil remedies against entities that breach CPRs, including unwinding the relevant transaction or receiving a discount. This legal remedy could prove very expensive for a trader.
It’s important to remember that anything said in an advert may be taken into account and used when a consumer makes a claim under the CRA that relates to the goods, services or digital content in question. Traders need to remember that consumers can reject goods that are defective (and receive a refund) within 30 days of delivery (or installation, if that is part of the contract). If a consumer does not reject defective goods, they may require that the goods are repaired or replaced and, if this is not possible, the consumer has the right to a reduction in price of the goods. Similar rules apply to defective digital content, except that consumers do not have the short-term right to reject defective digital content. Consumers can request that defective services are performed again and also have a right to a reduction in the price of defective services.”
Summary
The lesson is, and ought to be, play fairly. The one-off gain from breaking the rules really isn’t worth the publicity or the chance of a day in court.
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