Businesses generally understand that promotions such as prize draws, offers and competitions need to be underpinned by comprehensive terms and conditions.
However, a more complex legal area is determining what key information needs to be included upfront in the marketing material used to generate customer interest in the promotion.
This area becomes even more challenging in the context of social media (for example tweets) where space is limited. Which conditions are so important that they must feature in the advertisement itself?
The Advertising Standards Authority (ASA) has recently published guidance to help businesses make informed decisions in this area.
The advertising code enforced by the ASA (the CAP Code) makes it clear that, when running promotions, it is not enough to simply tell consumers that "terms and conditions apply" and then refer them to a set of external T&Cs. Any "significant" T&Cs must be included upfront in the initial marketing material for the promotion.
For example, the ASA upheld a complaint against an Amazon Prime promotion in 2014 because the initial ad did not make it clear that customers would automatically be charged for a year’s subscription of £79 if they did not cancel their free trial. Although the information was included in the small print and T&Cs, this was not clear enough in the eyes of the ASA.
Significant T&Cs are defined broadly as those that are "likely to affect a consumer's understanding of the promotion and their decision on whether or not to participate."
The CAP Code sets out a list of conditions which it expects will be significant for most promotions. These include conditions such as costs for participating, closing dates and certain entry restrictions.
Of course identifying which T&Cs are significant is often just part of the challenge for businesses. There is then the issue of deciding where those conditions should feature within the ad in question.
While the ASA has stopped short of providing prescriptive guidance on this point, it has said that for online advertising this means that significant conditions "should be included on the same page as the ad, in the main ad."
The ASA acknowledges that in some cases there may not be enough space to include all significant conditions for a promotion in the initial ad. Twitter posts are a prime example of a medium which limits space for upfront information about the promotion.
On this point the CAP Code says that marketing communications which are significantly limited by time or space must:
In cases where space is genuinely limited, the ASA guidance says that if readers can click through to more information, it might be acceptable for significant conditions to be on the landing page and other less important conditions to be one click away. However the initial ad should always indicate that terms and conditions apply.
As a general rule, the ASA will not allow businesses to hide behind lack of space as an excuse for not bringing significant conditions to the attention of consumers, and will expect businesses to do what they can in the space available to them. As an example, the ASA guidance cites its ruling against Lucky Pants Bingo, where it found that the promoter failed to use the space available to it in the marketing text message to flag significant conditions.
The ASA also takes the view that advertisers' own websites or emails are unlikely to be limited by space. In such cases, businesses should take care to ensure significant terms and conditions for promotions are in the email, or in the ad itself on the same page of the website.
With an ever increasing proportion of promotions being targeted through social media and other forms of e-marketing, it is important for businesses to be aware of the risks – and understand that online ads are subject to the same degree of scrutiny in the ASA's eyes as more traditional forms of print and broadcast advertising. Businesses should ensure that all ads – including the T&Cs - are subject to legal scrutiny to check that they comply with the CAP Code.
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at April 2017. Specific advice should be sought for specific cases. For more information see our terms & conditions