Back to Basics: Promotional Compliance, the fundamentals.
Every month our Legal Team will explore the world of prize promotions via our ‘Back to Basics’ series.
Staying the right side of the laws and rules for running promotions is important not only to avoid court cases, fines, corporate or brand embarrassment but also to boost consumer confidence and participation in your promotion.
The Legal Framework
There are a number of different rules and laws that your promotion must be compliant with:
The Consumer Protection Regulation (CPR), The Gambling Act, The Data Protection Act 2018 and Copyright and Trademark Law are all hard law in the UK and a breach of any one of these could result in serious fines or even imprisonment.
The Advertising Standard’s Authority is the UK’s regulator of advertising. They monitor and apply the Ad Codes written by the Committee of Advertising Practice. Key clauses that need to be followed when running promotions include the following:
8.17 Misleading Consumers
All marketing communications or other material referring to promotions must communicate all applicable significant conditions, or information where the omission of such conditions or information is likely to mislead.
8.17.6 Rewards/Gifts with Purchase
Promoters must specify the number and nature of prizes or gifts, if applicable. If the exact number cannot be predetermined, a reasonable estimate of the number and a statement of their nature must be made.
Promoters must not claim that consumers have won a prize if they have not. The distinction between prizes and gifts must always be clear. If a promotion offers a gift to a significant proportion and a prize to a minority, special care is needed to avoid confusing the two: the promotion must state clearly that consumers qualify for the gift but have merely an opportunity to win the prize.
8.24 Prize Draws
Prizes must be awarded in accordance with the laws of chance through a process that produces verifiably random results by or under the supervision of an independent person. 8.25 Instant Wins Requires an independent audit statement to show all prizes were randomly and fairly distributed in accordance with chance. Winners must immediately know what they have won. And be able to claim without delay, cost, or administrative barriers.
If the selection of a winning entry is open to subjective interpretation, an independent judge or panel must be appointed. They must be demonstrably independent, especially from the competition’s promoters and intermediaries. They must also be competent to judge the competition and their full names be available upon request.
8.28 T&Cs Visibility
Participants must be able to retain conditions or easily access them throughout the promotion. In addition to rule 8.17, prize promotions must specify on all marketing communications or other material referring to them, the following information, clearly before or at the time of entry, where the omission of any of the specified items is likely to mislead.
As well as hard law and the CAP Code, amongst other self-regulation within the UK, individual social media platforms also have their own special rules, which will apply on top. There are varying rules for each platform, it is important to stay on top of these to ensure compliance.