The OFT has issued High Court proceedings against the companies and individuals behind five UK prize draw promotions in an attempt to prevent mailings and the distribution of scratch-cards which, the OFT considers, are misleading.
The proceedings seek an injunction preventing unfair practices by Gloucestershire-based Purely Creative Limited, Strike Lucky Games Limited, McIntyre & Dodd Marketing Limited, The Winners Club Limited, and Dodd Marketing Limited, all of which are based in Herefordshire.
The injunction is also being sought against Adrian John Williams, a common director of all the companies, and Wendy Elaine Ruck, the common secretary, as well as Catherine Cummings a second director of Purely Creative Limited, and Peter Jude Henry, a previous director of The Winners Club Limited.
The businesses promote various premium-rate telephone prize draw scratch-cards which are distributed through inserts in magazines and newspapers, as well as direct mailings. The action is being taken under the Enterprise Act 2002 for breaches of the Consumer Protection from Unfair Trading Regulations 2008 (CPRs).
The OFT considers the promotions are legally unfair because they:
- create the impression that the recipient has won a prize, which in fact cannot be claimed without incurring a cost, such as through a premium line telephone call or a payment for ‘insurance and delivery’
- deceive consumers into believing they have been particularly fortunate to have been selected or to have won a prize
- deceive consumers that a prize is of a high value
- omit information, or provide ambiguous information, about the chances of winning, costs of claiming, and terms and conditions of the prize draw.
The companies believe that their promotions comply with the relevant laws and guidelines and have refused to cease their publication.
Heather Clayton, OFT Senior Director, said:
‘Our case is that these promotions encourage people to believe they have won a valuable prize when, we argue, the plain fact of the matter is that people are being sold a low value product. We have been unable to reach agreement with the companies or secure voluntary agreement that distribution will cease. So we think the best thing now is for the High Court to decide the matter.’
NOTES
1. Purely Creative Limited has a registered office of Kings Buildings, Lydney, Gloucestershire, GL15 5HE. Strike Lucky Games Limited and McIntyre and Dodd Marketing Limited, and The Winners Club Limited have the same registered office of Green Heys, Walford Road, Ross on Wye, Herefordshire, HR9 5DB.
2. It is for the High Court to decide whether the promotions are unfair under the Consumer Protection from Unfair Trading Regulations 2008 (‘CPRs’). No date has yet been scheduled for the High Court hearing.
3. The CPRs came into force on 26 May 2008 implementing the EC Directive on unfair commercial practices. The CPRs prohibit unfair commercial practices which distort consumers’ decisions. They introduce a general duty not to trade unfairly on businesses dealing with consumers. They prohibit misleading consumers by action or omission. They also contain prohibitions against aggressive practices, as well as 31 specific practices that are always considered unfair.
4. The CPRs are enforceable by the OFT and other designated enforcers through both the criminal and civil courts. Breaches of the CPRs also constitute ‘Community infringements’ under the Enterprise Act 2002. Under this Act, the OFT can apply to the courts for an injunction ordering businesses to comply with the law in future. It may also accept undertakings from those involved in lieu of action.
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