The UK’s Advertising Standards Agency recently provided some useful guidance on compliance with its CAP Code that will assist promoters, influencers, agencies and brands as they continue to navigate the various ASA rules during the COVID-19 crisis.
Dealing with unexpected events whilst running promotions
Section 8 of the CAP Code governs promotions, and includes rules around dealing with the impact of unexpected events. For example, if promoters are no longer able to supply and fulfil demand for a promotional offer due to the coronavirus pandemic, Rule 8.11 requires promoters to ensure timely communication to applicants and consumers and, where there is a detriment to applicants, to offer refunds or substitute products.
In this context, the CAP Code and new Guidance warn against simply using the disclaimer “subject to availability” in an attempt to relieve promoters of their obligation to do everything reasonable to avoid disappointing participants.
Where an existing promotion is ongoing, consumer law and ASA rules mean that businesses can only make changes to the terms and conditions in exceptional circumstances. Whilst the COVID-19 pandemic is indeed an exceptional circumstance, promoters must be able to show that (i) the changes are necessary because of the crisis; (ii) they have kept participants updated on any amended rules; and (iii) consumers would have entered the promotion even if the new rules had originally been in place.
Even if the amendments are as simple as changing the closing date for entries into a promotion or the timeframe by which winners will receives their prizes, the guidance lays out strict conditions limiting a promoter’s ability to make those changes. For example, any new closing dates should not be unfair on original entrants. Similarly, although prizes should normally be awarded within 30 days, promoters cannot simply cancel promotions due to the pandemic: they should award prizes as soon as possible. If it is genuinely impossible (a strict test) to award the prize advertised, businesses are obliged to provide a reasonable equivalent, of roughly equal value.
The ASA recognises that it will need to act sensitively but clarifies that it will pursue action against marketers who seek to exploit the COVID-19 crisis for financial gain or who otherwise act to mislead or disadvantage consumers.
How free is that free trial?
During lockdown, with consumers spending more time at home, the take up for subscription services and deliveries has increased. Brands incentivise consumers to become customers through free trial offers. The Guidance also seeks to prevent ads that promise something for free, but where the consumer later discovers, at catch (e.g. they have entered into an ongoing commitment).
The CAP Code prohibits the advertising of free trials where marketers use the term “free trial” to describe “satisfaction or your money back” offers or offers for which a non-refundable purchase is required. The Guidance reminds brands to only advertise free trials where the offer is genuinely free to the consumer. This means that brands cannot charge the consumer for packing, packaging, handling or admin fees. However, brands may charge a separate delivery free if this is the genuine, uninflated cost of postage.
Another condition for brands to satisfy when advertising free trials is to ensure that consumers are aware of the extent of the commitment that they are agreeing to and what the arrangement is. Certain material information must be clearly provided to the consumer, including:
what a consumer needs to do to trigger the free trial;
- whether a subscription payment automatically applies to the consumer unless the trial is manually cancelled;
- details as to how the consumer can cancel;
- the extent of the financial commitment if the consumer does not cancel; and
- any other significant conditions, such as the end date for commencing the free trial or whether limitations apply, such as the trial being made available to new customers only.
The Guidance warns brands not to hide any conditions. Consumers must be able to access applicable terms easily. Simply stating “T&Cs apply” or providing any other fleeting reference to other terms are unlikely to meet the condition for the terms to be clear to consumers.
Marketing alcohol responsibly
The ASA, in its third instalment of this trilogy of guidance, provides advice to alcohol marketers to ensure that alcohol-related promotions do not encourage excessive drinking. This is especially relevant during lockdown, as Alcohol Change UK reports that one in five people are drinking more than usual during lockdown.
The Guidance refers to “Bottomless Prosecco” promotions. In a previous ruling, the ASA upheld a complaint that an advert for “unlimited bottomless prosecco” within a 2 hour period was likely to encourage consumers to drink as much as they could within a short period of time. As such, the ad was banned.
The Guidance reminds brands not to target any advertising at under-18s and must ensure that people featured in ads should be (and look) at least 25 years old.
Brands are also prohibited from claiming that alcohol has therapeutic qualities, such as curing boredom, providing escapism or solutions to other problems.
Squire Patton Boggs specialises in advising on advertising and marketing matters and has represented a number of parties in the alcohol products market as well as prize promoters. If you would like specialist advice on these and related issues, please contact partner Carlton Daniel.