The Advertising Standards Authority’s Adjudication against Direct Home Shopping Brands Ltd t/a Kaleidoscope Ltd (28 January 2008) reminds advertisers that the explicit and informed consent of consumers is required before disclosing their personal details to third parties for direct marketing purposes. Because small print in Kaleidoscope’s advert for a marquise ring stated that, by responding to the ring promotion, consumers were consenting to Kaleidoscope sharing their information with other organisations that might contact them for direct marketing purposes, the ASA decided that the advert was in breach of the Committee of Advertising Practice (CAP) Code Clauses 43.4c and 43.5 (Database practice).

THE ADVERT

A national press advert, for a marquise ring, was headed “STRICTLY LIMITED TO ONE PER CUSTOMER, WHILE STOCKS LAST! FREE Ring All you pay for is the postage!”

Small print on the order form stated

By ordering from us, you are consenting to us sharing your information with other organisations and to us or them contacting you for marketing purposes by mail, telephone, email or otherwise. If you do not wish to be contacted by us by telephone for marketing purposes please tick this box. If you do not wish to be contacted by other organisations for marketing purposes, please tick this box.

DATABASE PRACTICE BREACHES

In response to the ASA’s challenge as to whether the data protection information complied with the CAP Code, Kaleidoscope stated only that the data protection statement was drafted by solicitors and the company believed that it complied with the Data Protection Act 1998.

The ASA decided that the data protection statement in the advert constituted a breach of CAP Code Clause 43.4c which states that “consumers should be informed at the time when personal information is collected if it is intended to disclose the information to third parties, including associated but legally separate companies.”

The ASA also said that the ad breached Code Clause 43.5. This states that “marketers should first get the explicit consent of consumers” if it is decided to disclose personal information to third parties for either direct marketing purposes or for any purpose different substantially from that which consumers could reasonably have foreseen and to which they might have objected.

OTHER BREACHES

The ASA also found the advert in breach of several other CAP Code clauses including 7.1 and 7.2 (truthfulness) and 32.5 (free offers and free trials). The ASA decided that the description of the ring as “free” was misleading because Kaleidoscope included £3.95 for postage and packaging. Advertisers are warned that an offer should be described as free only if consumers paid no more than the true cost of freight or delivery, such as the current public rate of postage. A company’s own standard delivery charge cannot accompany a “free” claim in an advert unless it can be shown that the delivery charge is no more than the true cost of postage for the “free” product.

The ASA also stressed the importance of sufficient prominence given to significant conditions likely to affect consumers’ understanding of the promotional offer. The ASA decided that the fact that a mandatory personal account would be set up in lieu of the customer sending money was not sufficiently prominent in the advert and breached CAP Code Clauses 7.1 and 7.2 (truthfulness).

COMMENT

In order to comply with CAP Code rules regarding database practice, advertisers and their solicitors need to ensure that consumers have given their explicit consent to the passing on of personal information to third parties for direct marketing purposes or for any substantially different purpose beyond the consumer’s expectation.

By allowing the consumer to opt-in with a tick in the box rather than to opt-out, Kaleidoscope would have avoided the breach. In order for consent to be given, consumers need to be aware of the intention to disclose their personal details to third parties. Also, including the intention to disclose personal information in the body of the text rather than in the small print would have been a better approach. Kaleidoscope did neither. The fact that the complaints about the data protection statement on the Kaleidoscope advert came from the ASA itself demonstrates that the authority is quick to pick up on any potential breaches of CAP Code rules, even if consumers are not.