The United Kingdom's Office of Fair Trading said this week that a premium-rate prize competition company promised not to use misleading advertising to promote competitions that gave people the idea they had won a major cash prize.
Churchcastle Ltd., trading as Fast Cash and UK Prize Bonanza, sent unsolicited mailings to nearly 1.4 million consumers telling them they were entitled to claim one of the awards listed. The mailings urged them to call a premium-rate number at a cost of 1.50 pounds per minute. Calls lasted up to five minutes. More than 190,000 people called the premium-rate numbers used in these promotions, OFT said.
The OFT alleged that the mailings were misleading in their layout and led people to think they had won a cash prize of 5,000 or 10,000 pounds. Nearly everyone who responded received only “giveaway” items such as vouchers for discounted holidays, health and leisure services or a family portrait, and these vouchers had restrictions on their use.
The company, director Neil Frogley and employees Karen Dacies and Carly Assell agreed that they will not publish or distribute materials giving misleading impressions that:
· A recipient of an ad had entered a competition, promotion or prize drawing.
· A recipient has won a major prize.
· Each prize appearing in a list of prizes is a major prize or that each prize in a list is of equal or similar value or status.
Any breach of the agreement could result in a court order.
“Misleading mailings such as these deceive consumers and damage the reputation of fair-dealing businesses using legitimate direct marketing techniques,” said Penny Boys, OFT executive director.
Chantal Todé covers catalog and retail news and BTB marketing for DM News and DM News.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters