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ECITA ISE: FCP Chapter 12 The Advertising Standards Agency Codes, the Enterprise Act (2002), and the Unfair Trading Regulations (2008)

15 : FCP Chapter 12 The Advertising Standards Agency Codes, the Enterprise Act (2002), and the Unfair Trading Regulations (2008)

Thursday, November 6, 2014

Introduction

This chapter addresses the CAP and BCAP Codes introduced in October 2014, the Control of Misleading Advertising Regulations (1998) (CMARs) and the Business Protection from Misleading Marketing Regulations (2008) (BPRs) which replaced them. It also explains the requirements of ECITA with regard to Point of Sale (POS), marketing, promotional and advertising materials. Advertising and other requirements as summarised herein that affect your business are also itemised in the Office of Fair Trading’s A quick guide to competition and consumer protection laws that affect your business(1). (Please see also CHAPTER 10, SECTION 7: ADVERTISING / PROMOTIONS ONLINE.) It also addresses the requirements under the Consumer Protection from Unfair Trading Regulations (2008).

Advertising Standards Agency CAP Codes

The Committee of Advertising Practice (CAP) is the arm of the Advertising Standards Agency specifically responsible for defining the regulations. This Committee, together with its sister Committee BCAP (the Broadcast Committee of Advertising Practice) has produced a series of Codes, specifically related to the advertising of electronic cigarette products. These come into effect on 10th November 2014, and will be enforced by the Advertising Standards Agency from that date.

The full set of CAP and BCAP Codes developed for electronic cigarette products is provided at ANNEX XVI.

The Committee of Advertising Practice offers a free pre-publication advice service called Copy Advice. The Copy Advice team specialise in providing bespoke advice on non-broadcast ad campaigns, as well as writing and maintaining over 400 AdviceOnline guidance documents (AOLs), and producing and delivering training and seminars.  They have produced a specific AOL on e-cigarettes. The team are available to discuss non-broadcast ad campaigns Monday to Friday, on 020 7492 2100.

Comparative and misleading advertising

The Business Protection from Misleading Marketing Regulations (2008) (BPRs) came into force on 26 May 2008. They implement the Comparative and Misleading Marketing Directive (MCAD) which is aimed at harmonising legislation across the European Union relating to advertising which misleads traders. The regulations also set out the conditions under which comparative advertising (advertising which identifies a competitor or a competitor’s product) is permitted. This allows traders to understand what their obligations are when advertising their products or services to traders in other Member States.

ECITA members are expected not to engage in comparative advertising between electronic cigarette vendors, whether fellow ECITA members or not.

The BPRs prohibit advertising which misleads traders. They set out what conditions are acceptable in relation to comparative advertising and require code owners (traders and bodies responsible for codes of conduct or monitoring compliance with such codes) not to promote misleading advertising and comparative advertising which is not permitted. The BPRs replace the requirements set out under the previous Control of Misleading Advertising Regulations (1998) (CMARs) not to use advertisements which mislead other businesses or which are not permitted by comparative advertisements. Therefore, if your business was compliant with CMARs, it is likely to be compliant with the BPRs.

In general terms an advertisement can be considered misleading if it, in any way, deceives, or is likely to deceive, the trader to whom it is addressed or reaches and if, by reason of its deceptive nature, it is likely to affect their economic behaviour. If the advertisement misleads consumers and causes, or is likely to cause, them to take a different transactional decision than they may otherwise have taken, this may breach the Consumer Protection from Unfair Trading Regulations (2008) (CPRs). An advertisement is comparative if it either explicitly or implicitly identifies a competitor or goods or services offered by a competitor. Comparative advertising is allowed, but only if it is not misleading and meets certain other conditions, which are set out within the regulations.

There are other CAP Codes which continue to apply, since they relate to other existing legislation. These are set out below:

Any claims regarding the longevity or content of a product must have documentary evidence to substantiate them:
 
“[M]arketers must hold documentary evidence to prove claims that consumers are likely to regard as objective and that are capable of objective substantiation.” ASA CAP Code 3.7

“Marketing communications must not mislead consumers by exaggerating the capability or performance of a product.” ASA CAP code 3.11.

Marketing materials may not mislead consumers by omitting material information, or presenting it in a way that cannot be understood.

“(3) In paragraph (1) “material information” means:

(a)     the information which the average consumer needs, according to the context, to take an informed transactional decision; and
(b)     any information requirement which applies in relation to a commercial communication as a result of a Community obligation.

(4)     Where a commercial practice is an invitation to purchase, the following information will be material if not already apparent from the context in addition to any other information which is material information under paragraph (3):

(a)     the main characteristics of the product, to the extent appropriate to the medium by which the invitation to purchase is communicated and the product;
(b)     the identity of the trader, such as his trading name, and the identity of any other trader on whose behalf the trader is acting;
(c)     the geographical address of the trader and the geographical address of any other trader on whose behalf the trader is acting;
(d)     either:

(i)     the price, including any taxes; or
(ii) where the nature of the product is such that the price cannot reasonably be calculated in advance, the manner in which the price is calculated;

(e)     where appropriate, either:

(i)     all additional freight, delivery or postal charges; or
(ii) where such charges cannot reasonably be calculated in advance, the fact that such charges may be payable;

(f)     the following matters where they depart from the requirements of professional diligence:

(i)     arrangements for payment,
(ii)  arrangements for delivery,
(iii) arrangements for performance,
(iv) complaint handling policy (see ANNEX XVI for ECITA’s Complaints Procedure Policy);

(g)     for products and transactions involving a right of withdrawal or cancellation, the existence of such a right.” Section 6 ‘Misleading Omissions’

The same basic principles apply if the promotional material is aimed at another business, rather than the end user (as detailed in section 2, ‘Comparative and misleading advertising’, of this chapter):

“(2) Advertising is misleading which:

(a)    in any way, including its presentation, deceives or is likely to deceive the traders to whom it is addressed or whom it reaches; and by reason of its deceptive nature, is likely to affect their economic behaviour.” (BPRs.)

Email marketing communications must be identifiable as such without the need for opening them, i.e. this information must be included in the subject line. ASA CAP code, section 2.

Marketing communications that involve distance selling must make clear the marketer’s identity and geographic address and this information must be given in a form that can be retained by consumers. They should also include prices and an estimate of delivery times and charges. ASA CAP code, section 9

It is technically ‘unfair’ to advertise products for sale which you do not have in stock, or to accept orders which you will be unable to fulfil within a reasonable time frame and at the advertised price:

“Making an invitation to purchase products at a specified price without disclosing the existence of any reasonable grounds the trader may have for believing that he will not be able to offer for supply, or to procure another trader to supply, those products or equivalent products at that price for a period that is, and in quantities that are, reasonable having regard to the product, the scale of advertising of the product and the price offered (bait advertising).” (Schedule 1, “Commercial practices which are in all circumstances considered unfair”, Para 5, Consumer Protection from Unfair Trading Regulations.)

 

Footnotes

http://www.oft.gov.uk/shared_oft/business_leaflets/general/oft911.pdf; jsessionid=ABA5CB13D0F823D842BDC441284AB99A