The Committee of Advertising Practice (CAP) Copy Advice team understand that, in order to legally run these promotions, promoters must comply with various legislative requirements. Before proceeding with running any promotions which offer a property as a prize, promoters should seek legal advice to ensure that they are complying with these requirements. The Copy Advice team cannot give legal advice, and the advice in this AOL only applies if the promotion complies with all legal requirements.
The Copy Advice team also advises that promoters seek expert legal advice to ensure that the mechanisms involved do not make any promotion an unlawful lottery.
Win a House prize draws or competitions are promotions in which promoters offer their house or property as a prize. The Advertising Standards Authority (ASA) has investigated multiple ads for this type of promotion, and has found many in breach 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 prizes must be awarded 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 promotions in which the ad offered a property as a prize, but in reality the prize advertised was either not awarded at all, or a substitute cash prize of a significantly lower value was awarded instead. Often this is because the advertiser has not sold the desired amount of tickets and instead offers a lower value prize. This is likely to be problematic, and a breach of rule 8.15.1.
In 2017, the ASA investigated a prize draw which advertised the prize as “A LUXURIOUS LONDON HOME”. If the promoter did not receive a predetermined number of entries (575,000 at £5 per ticket) for this raffle, they would instead award a cash substitute of the value of the tickets sold minus a 15% deduction to cover administration fees, therefore the cash substitute would be significantly less in value that the value of the prize advertised. In this case the ASA considered that this substitute cash prize was not a reasonable equivalent to a “luxurious London home”, and ruled that the promotion breached the Code (Homeraffler.com, 13 December 2017).
In a similar promotion, the advertised prize of a house was substituted with a cash prize of £7,000, which was not considered a reasonable equivalent (HMV Competitions, 11 April 2018).
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 this should usually be clearly stated in all promotional marketing unless it is not needed. House raffles and similar promotions are likely to require a closing date. An ad for Homeraffler.com was upheld under rule 8.17.4 because it did not include a closing date in the ad (Homeraffler.com, 13 December 2017).
Code rule 8.17. 4.e states that closing dates must not be changed unless unavoidable circumstances outside of the control of the advertiser make it necessary, and to not change the date would be unfair to those who sought to participate within the original terms. In the same Homeraffler case, the terms and conditions for the promotion stated that the promoter could extend the closing date by up to six months if they had not received enough paid entries, or close the promotion early. Stating the possibility of a change in closing date in terms and conditions of a promotion will not negate the need for a promotion to comply with rule 8.17.4.e, and a change in closing date will still usually be problematic. Because the closing date could be changed based on the number of paid entries received, the ASA concluded that the promotion breached the CAP Code (Homeraffler.com, 13 December 2017).
Closing dates should not be changed unless unavoidable circumstances beyond the control of the promoter made 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 a promotion which offered consumers the chance to win a mansion, because the closing date was changed. The advertiser explained that this was due to technical issues, and because one member of staff was away from work due to sickness. In this case, because the advertiser did not explain why this meant that they have to then extend the closing date by 12 months and the change in closing date did disadvantage participants who had already entered, the complaint was upheld (Ogilvie Promotions Ltd, 03 July 2019).
Consider whether you need to include a free entry route
A prize promotion 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. Specialist legal advice should be sought when considering advertising a promotion in Northern Ireland or the Channel Islands.
A free-entry route is listed in the CAP Code as a significant condition which should be included in the ad (rule 8.17.2). As such, free entry routes to participate in these promotions must be explained clearly and prominently. This was not the case in an ad for a promotion to win a home, which was upheld by the ASA. In this ad, the instructions for entering for free by post were stated at the bottom of the webpage, and were separate from the prominent links where participants could buy tickets and choose a charity. As such, the ASA considered that participants could easily miss the free entry route and that it was not sufficiently prominent (HMV Competitions, 11 April 2018).
Don’t mislead by omitting significant conditions
As well as a free entry route, ads for promotions must include all significant conditions which apply to that promotion in the ad itself, 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.
Take care with other terms and conditions and ensure they’re accessible
Terms and conditions should be accessible throughout the duration of the promotion and must not be changed unless those changes are effectively communicated and contain nothing that could have reasonably influenced consumers against participating.
The ASA received multiple complaints about a prize draw for a house, because they understood that the terms and conditions were changed multiple times throughout the promotion. Initially, consumers were required to pay to become a member of Real Hot Property’s website, with different levels of membership providing different numbers of “free” entries to the prize draw. The rules were then changed to allow consumers to receive one free entry to the prize draw by becoming a “Standard” member of the website, at no cost, and a further change allowed consumers who booked a holiday through the advertiser to receive 50 free entries to the prize draw. The ASA ruled that these changes were likely to have influenced consumers against participating under the original entry route, and the complaints were upheld (Real hot property, 22 February 2017). See also (Raffle House Ltd, 26 June 2019).
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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