The Unfair Commercial Practices Directive (2005/29/EC), which was implemented in the United Kingdom on 26 May 2008 by the Consumer Protection from Unfair Trading Regulations 2008 (CPRs), may be one of the most sweeping pieces of legislation in recent memory. However, the Advertising Standards Authority (ASA) says that it is “not anticipating a significant change in its overall approach” following changes to the Committee of Advertising Practice (CAP) Advertising Code announced on 24 June. The Broadcast Committee of Advertising Practice (BCAP) is, nevertheless, consulting on its proposals to bring the BCAP TV and Radio Advertising Standards Codes into line with the CPRs. CAP, on the other hand, has thought better of holding a public consultation, preferring instead “to publish its amendments immediately to help the advertising industry to comply with the new legal provisions”.
As well as introducing into UK law a general duty on all businesses not to trade unfairly with consumers, the CPRs identify misleading and aggressive practices as forms of unfair practice. They introduce legal definitions of such practices and set out a framework for the assessment of commercial practices that are alleged to be unfair. The CPRs also blacklist 31 specific practices considered unfair in all circumstances.
Instead of incorporating the tests set out in the CPRs into every BCAP Code rule that relates to unfair, misleading or aggressive advertisements, BCAP proposes to include an appendix in the TV and Radio Codes that will summarise those tests. The proposed appendix will also state that, whenever the ASA considers complaints under the rules that prohibit unfair, misleading or aggressive advertisements, it will have regard to the tests set out in the CPRs.
The CPRs specify that the effect of a commercial practice must be considered from the point of view of the average consumer (Section 2, paragraphs 2 to 6). This is consistent with the ASA’s existing practice. In most cases, the average consumer is an average member of the population as a whole. BCAP confirms that if the advertisement is directed at a specific group of consumers, however, or if the advertisement is likely to affect the behaviour only of a vulnerable group in a way that the advertiser could reasonably be expected to foresee, the effect will be considered from the point of view of the average consumer in the affected group. The CPRs’ provisions on “average consumers” are also incorporated in the appendix to the TV and Radio Codes that summarise the tests to determine unfair, misleading or aggressive commercial practices.
As for blacklisted practices, BCAP intends to incorporate into the Codes those that are, or could be, relevant to advertising. These include, amongst others: bait advertising; describing a product as free if the customer has to pay anything other than the cost of collection/delivery; and presenting rights given to consumers in law as a distinctive feature of the advertiser’s offer. The practices that BCAP does not intend to incorporate are those that fall outside the remit of BCAP’s Codes, for example, practices that involve face-to-face contact and direct solicitations by phone or fax.
Finally, the CPRs also introduce the concept of “invitation to purchase”. The section of the CPRs that forbids misleading by omission (Section 6) specifies information, the omission of which may render an “invitation to purchase” advertisement misleading (Section 6, paragraph 4). Whether the advertisement is misleading by omission is determined by means of the test set out in the general prohibition on misleading omissions. Because “invitation to purchase” is a significant aspect of the CPRs and is a concept that does not exist in the present regime for advertising regulation, BCAP proposes to include in the Codes the CPRs’ prohibition of misleading omission in advertisements that feature invitations to purchase.
CAP CODE CHANGES
The introduction to the CAP Code now states that, in assessing conformity with the Code, “the ASA may take account of honest market practices and the general principle of good faith in the traders’ field of activity”. New rule 2.9 also states that “marketers should deal fairly with consumers”.
Rule 4 now states that “marketers should not state or imply that a product can legally be sold if it cannot or present rights given to consumers in law as a distinctive feature of their offer”. New rule 7.2 states that
“marketing communications must not omit, hide or provide in an unclear, unintelligible, ambiguous or untimely manner material information if that omission or presentation is likely to affect consumers’ decisions about whether and how to buy the advertised product”.
The new rule also sets out the information that must be provided in ads that quote prices for advertised products, such as the main characteristics of the product, delivery charges and the right to cancel if applicable.
Under new rule 9.3
“marketers should not mislead consumers about the nature or extent of the risk to the personal security of consumers or their families if consumers do not buy the advertised product. New rule 9.4 states that marketers should not explicitly inform consumers that, if they do not buy the product or service, the marketer’s job or livelihood will be jeopardised.”
New rules 14.7 and 14.8 reflect the prohibitions on the blacklisted practices of falsely displaying trust marks etc. or falsely claiming to be a signatory to a code of conduct. Similarly, the CAP Code rules on availability (rule 16) have been amended to incorporate the prohibitions on bait advertising, switch selling, making false representations about market conditions and claiming that a business is about to cease trading.
The prohibitions on advertisements that create confusion between advertiser and competitor, or with a competitor’s products or marks, are covered in new rules 18.6 and 19.2 respectively and new rule 21.3 states that “marketing communications should not mislead consumers about who manufactures the product”.
Rule 22.3 states that “marketers should not falsely claim or imply that they are acting as consumers or for purposes that do not relate to their trade, business, craft or profession”. New rule 32.5 replaces rule 32.1. The new rule states that consumers’ liability for costs should be made clear in all material featuring “free” offers. An offer should be described as free only if consumers pay no more than the minimum, unavoidable cost of responding to the promotion, and the true cost of collection or delivery. Promoters should not charge for packing, handling or administration.
The rules on prize promotions have been amended. Rule 35.6 is replaced with new rule 35.10 which provides that “marketers should award the prizes as described in their marketing communications or reasonable equivalents”. New rule 35.11 states that “marketers should not falsely claim or imply that the consumer has already won, will win, or will, on doing a particular act, win a prize (or other equivalent benefit) if the consumer must incur a cost to claim the prize (or other equivalent benefit) or if the prize does not exist”. New rule 39.1 states that “marketers should not claim that products are able to facilitate winning games of chance”.
Rule 42 now expressly bans inertia selling although this was already prohibited under the Distance Selling Regulations 2000/2334. Rule 43.13 prohibits making persistent and unwanted marketing solicitations by distance means. Appealing to children to pester their parents or other adults to buy advertised products is prohibited in new rule 47.12b. New rule 50.27 states that marketers should not falsely claim that a product is able to cure illness, dysfunction or malformations. Pyramid schemes are banned under new rule 52.8.
As in the BCAP consultation, a new appendix summarises the tests set out in the CPRs relating to unfair, misleading or aggressive advertisements which underlie the application of the Code generally.
Whilst CAP’s revised clauses come into immediate effect, CAP will take into account any changes that BCAP makes as a result of its consultation in its forthcoming comprehensive review of the CAP Code. Fortunately, as most of the rules presently in the Codes are, or were already, consistent with the CPRs, it does appear that any changes made or proposed are more of form than substance. Nevertheless, in the light of the fact that breaches of the CPRs are in the main strict liability criminal offences, breaches of the corresponding sections of the Codes take on an altogether different significance.