Promotional marketing: Subscription traps and free trials


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Published
Nov 12th '21
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This guidance should be considered alongside CAP’s (Committee of Advertising Practice) ‘Guidance on the advertising of “free trials” or other promotional offer subscription models’.

 

  • What is a “subscription trap”?

Free trial offers are often presented as a way for consumers to try a new product for a set period of time, without incurring a cost.

 

There is nothing wrong with offering free trials to subscription services, but if, in opting to take up the free trial, consumers are automatically signed up to a subscription service and this is not made explicitly clear in the initial ad, the ad is likely to be considered misleading.  Ads for free trial offers (or similar promotions), which do not make clear that a consumer must enrol into an ongoing payment arrangement to take advantage of the offer are known as “subscription traps”.

 

  • What do ads for free trial offers need to include?

In line with advertising rules, ads for promotions must state all significant conditions likely to affect a consumer’s decision to participate in the promotion.

 

CAP’s ‘Guidance on the advertising of free trials or other promotional offer subscription models’ sets out the requirements of the Code in detail. Marketers should consider their own promotions and the associated terms and determine what should be included.  This is likely to include:

 

  • Whether a paid subscription starts automatically (after the trial) unless cancelled.
  • The extent of the financial commitment if the subscription is not cancelled (during the trial).
  • Any other significant conditions: for example, significant costs to participate.

 

Marketers of free trial style offers are advised to ensure their ads make the nature of any financial commitment explicitly clear, as this information will be considered a significant condition (Kelly’s Veggies Ltd, 16 September 2015 and HiLife Health & Beauty Pty Ltd, 3 December 2014).

 

Complaints about a promotion which offered a goody bag worth £60, a ticket to an exhibition and five issues of British Railway Modelling magazine for £5 were upheld by the Advertising Standards Authority (ASA) in 2020.  In order to claim these promotional items, consumers would have to sign up to a subscription for the magazine through a quarterly direct debit of £12.49, for a minimum term of one year. This information was considered material information that was likely to influence a consumer’s decision about the promotion, and therefore should have been included in the ad. Because the ad did not include this information the ad was considered misleading and breached the Code (Warners Group Publications plc, 01 April 2020).

 

  • Where should the significant conditions appear?

Significant conditions must be stated with sufficient prominence so that consumers will see them before choosing to participate in the promotion.  As such, advertisers should avoid stating these in areas where consumers may not see them before signing up for the offer, such as at the bottom of a long webpage or otherwise away from prominent references to the offer (Amazon Europe Core Sarl, 4 March 2015).

 

As with all promotions, simply stating “T&Cs apply”, “See website for terms” or similar, is unlikely to be considered sufficient to make the relevant conditions clear to consumers, and these should be stated in the ad itself (Warners Group Publications plc, 01 April 2020). It is also unlikely to be acceptable to include these in a pop up box only (WHG (International) Ltd t/a William Hill, 05 October 2016).

 

CAP’s ‘Guidance on the advertising of “free trials” or other promotional offer subscription models’ sets out examples of how to make significant conditions clear in ads for “free trial” style offers. See also Promotional marketing: Terms and conditions.

 

  • What if my promotional marketing is limited by time and/or space?

Advertising rules state that marketing communications that include a promotion and are significantly limited by time or space must include as much information about significant conditions as practicable and must direct consumers clearly to an easily-accessible alternative source where all the significant conditions of the promotion are prominently stated. Participants should be able to retain those conditions or easily access them throughout the promotion.

 

Whilst Code rule 8.18 may allow some scope for marketing communications which are significantly limited by time and space to direct consumers to significant conditions, rather than including them all in in the ad itself, marketers are advised that media types are rarely considered to be significantly restricted by time or space by the ASA. This is likely to be to be limited to media such as sponsored ads or search engine sites, and even then will be considered on a case by case basis.

 

Advertiser’s own websites, emails, social media posts, leaflets or posters are unlikely to be considered limited by time or space, and as such should state all significant terms and conditions (see Hard Rock Café (UK) Ltd, 11 February 2015 and Daub Alderney Ltd t/a Lucky Pants Bingo, 06 July 2016).

 

Even if an ad is considered to be significantly limited by time or space, marketers may still fall foul of Code if they omit significant conditions. If it is not possible to include all relevant significant conditions within an ad, marketers should carefully consider whether the media type in question is suitable to promote such an offer.

 

Source:CAP

 

About CAP

The Committee of Advertising Practice (CAP) is the sister organisation of the Advertising Standards Authority (ASA) and is responsible for writing the Advertising Codes.

 

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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