Retailers have until the 16 December 2014 and 13 January 2015 to respond to The Committee of Advertising Practice (CAP) and Broadcast Committee of Advertising Practice (BCAP) consultations on Sales Promotions and Distance Selling rules respectively.
The CAP and BCAP Codes currently include rules which reflect some of the requirements of The Consumer Protection (Distance Selling) Regulations 2000. These Regulations have now been replaced by the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (the 2013 Regs).
As a result of this change, CAP and BCAP have been forced to consider the extent to which its Codes should reflect distance selling legislation at all, specifically in view of now being prohibited from imposing greater restrictions than would otherwise be permissible under the new maximum harmonisation regime.
The CAP and BCAP rules require that certain pre-contractual information is stated within marketing communications which include a direct response mechanism allowing consumers to place an order without face to face contact. These rules do not fit the new regime which, in contrast, asks that such information be communicated at any stage 'before a consumer is bound by a distance contract' which could be at a later stage in the process, for example, when ordering via a website or telephone.
In addition, the extent to which material information must be stated in advertisements is defined by The Consumer Protection from Unfair Trading Regulations (2008) and reflected in the CAP and BCAP provisions which govern misleading advertising more generally. The upshot being that section 3 of the CAP and BCAP Codes already effectively instructs the type of material information that should be included within advertisements.
In relation to the existing advertising rules which relate to post-contractual information within advertisements, CAP considers that such matters are sufficiently regulated by other authorities and under legislation. It therefore proposes the removal of all distance selling related rules from both the CAP and BCAP Codes.
The Advertising Standards Authority (ASA) deals with very few complaints relating to the omission of pre-contractual information from advertisements. Complaints under the distance selling rules largely relate to the fulfilment of goods and prizes that have not been received. The ASA says such complaints will continue to be dealt with under the Sales Promotions rules. However those rules only allow the ASA to pursue fulfilment of a prize or a product if it is a promotional item. Consumers will therefore lose an effective route to resolution in disputes relating to the fulfilment of non-promotional items and/or refunds following non-receipt of such goods. Consumers will have to resolve such matters directly or, in worst case scenarios refer complaints to Trading Standards. It's difficult to see how this affords greater protection to consumers and seems at odds with the ASA's five year strategy 'Having More Impact'.
For retailers at least the removal of the distance selling rules from the CAP and BCAP Codes will mean one set of defined standards with which to comply and which are applied consistently and without having to worry about how the ASA might interpret them. However the removal of the ASA as one route to resolution will place a greater burden on Trading Standards departments to pick up the slack. What this means for retailers is that rather than the ASA and its self-regulatory Codes, they may find themselves answerable to Trading Standards in the first instance and the threat of enforcement action under the 2013 Regs.
Six years after the introduction of the Unfair Commercial Practices Directive and its implementation into UK law through the Consumer Protection from Unfair Trading Regulations (2008), CAP is reviewing the Sales Promotions rules to ensure they are no more or less restrictive than the underpinning legislation.
The proposed changes largely tighten existing rules to more accurately reflect how the legislation has been interpreted in the intervening years and should afford greater flexibility for promoters whilst allowing the ASA to continue assessing the likely detrimental impact on the consumer on a case by case basis.
The most significant change being proposed is that to rule 8.17 which deals with availability of promotional items. Under the existing rules retailers must be able to demonstrate a reasonable estimate of demand was made and that demand can be met. The new rule is less stringent insofar as it will provide retailers a defence in the event demand is not met as long as the advertisement was sufficiently clear as to the extent of availability and likely demand. For example, "500 available, likely to run out quickly".
The requirement to ensure promotions are fair, transparent and not misleading remains and so if agreed, the proposals should have little impact on the way in which retailers administer sales promotions.