The Committee of Advertising Practice (CAP) Copy Advice team advises that promoters seek expert legal advice to ensure that the mechanisms involved do not make any promotion an unlawful lottery. (See Promotional Marketing: Lotteries).
Many prize draws or competitions offer high value prizes, and sometimes the prize advertised is only awarded if the promotion reaches a certain number of paid entries.
The Advertising Standards Authority (ASA) has investigated multiple ads for this type of promotion, and have found multiple potential issues with running promotions in this way. Some promotions were found to be in breach of the Code rules for changing closing dates or other terms and conditions, withholding the prize advertised or offering a significantly lower value cash prize, and omitting significant conditions.
- Award the prize described, or a reasonable equivalent
Code rule 8.15.1 states that promotors must award prizes as described in the ad, or a reasonable equivalent. In order to be considered a reasonable equivalent, an alternative prize should be of the same nature and value as the prize advertised. The ASA has seen multiple ads for promotions which offer a high value prize, but do not award the prize described and instead award a cash prize of a significantly lower value than the advertised prize.
A prize is likely to be considered a reasonable equivalent if it is similar in nature and value to the prize advertised. It may be acceptable to offer a cash prize if the advertised prize cannot be awarded, however, the cash prize should be of equal value to the prize advertised. It is unlikely to be considered acceptable to award a cash prize of a significantly lower value than the advertised prize.
In 2019 the ASA considered complaints about ads for a promotion which offered a house worth £3 million as a first prize, and an Aston Martin as a runner up prize. Neither the house nor the Aston Martin were awarded, and instead a cash prize of £110,070 was awarded to the winner. The ASA considered that this was not a reasonable equivalent to a £3m house. Whilst the promoters stated that the prize was not awarded because the competition did not receive enough paid for entries, the ASA considered this a breach of rule 8.15.1, and complaints about the promotion were upheld (Win a Mega Home Ltd, 19 June 2019 (This ruling concerns property being offered as a prize, and promotions which do so are likely to be subject to legislation. Advertisers should seek legal advice and read the AOL on ‘Win a house’ promotions before offering property as a prize).
- Include a closing date and think before changing it
A closing date is likely to be considered a significant condition, and Rule 8.17.4.a states that ads should include a prominent closing date in all promotional marketing unless it is not needed.
Code rule 8.17.4.e states that closing dates should not be changed unless unavoidable circumstances beyond the control of the promoter make it necessary, and either not to change the date would be unfair to those who sought to participate within the original terms, or those who sought to participate within the original terms would not be disadvantaged by the change. The ASA will assess whether circumstances are unavoidable and are beyond the control of the advertiser on a case by case basis.
The ASA upheld a complaint about multiple competitions advertised on the same website, in which the prizes would only be awarded if a set number of allocated tickets were sold. They considered that, as the competitions could be open for a number of years before all the tickets were sold the lack of clarity about the prospective length of the competition and lack of information about the number of tickets that had been sold meant that the absence of a closing date disadvantaged consumers, by preventing them from making an informed decision about whether or not to purchase a ticket. As the competitions did not have set, individual closing dates, the ASA considered that information which explained how the competition was run and when competitions would theoretically close should have been included (I Can Have It Ltd, 25 July 2018).
- Consider whether you need to include a free entry route
A prize draw might be considered an unlawful lottery if participants are required to pay to enter, and it is likely that a free entry route will be required. Promoters should seek legal advice before embarking on this type of prize promotion to ensure that they do not run a promotion which would be considered an illegal lottery. Code rule 8.17.2 states that free entry routes should be explained clearly and prominently. Specialist legal advice should be sought when considering advertising a promotion in Northern Ireland or the Channel Islands. See Promotional Marketing: Free-entry Routes and Promotional Marketing: Lotteries.
- Don’t mislead by omitting significant conditions
Code rule 8.17 states that all marketing communications must include all significant conditions which apply to that promotion, where the omission of those conditions is likely to mislead. Significant conditions are those which are likely to influence a consumer’s decision on whether or not to participate. Whilst significant conditions may differ between promotions, Rule 8.17 lists some significant conditions which may apply.
A complaint about an online display ad for a prize draw to win a weekend in Disneyland Paris was upheld by the ASA because it did not state that the winner must respond to the confirmation email within 24 hours of receiving it in order to claim the prize. Whilst the full terms and conditions did include this information, the ASA considered that, as there could have been any number of reasons why participants were not able to check their emails over the period, the requirement to respond within 24 hours was a significant condition that was likely to affect their understanding of the promotion and as such should have been prominently stated in the ad (The Hut.com LTD t/a Zavvi, 13 February 2019).
See Promotional Marketing: Terms and Conditions for more guidance.
- Take care with other terms and conditions and ensure they’re accessible
All terms and conditions should be available before or at the time of entry, and should be accessible throughout the duration of the promotion (8.28). Terms and conditions must not be changed unless those changes are effectively communicated and contain nothing that could have reasonably influenced consumers against participating (8.23).
Note: This advice is given by the CAP Executive about non-broadcast advertising. It does not constitute legal advice. It does not bind CAP, CAP advisory panels or the ASA.
CAP’s AdviceOnline entries provide guidance on interpreting the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing.
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