June 4, 2013

UK Advertising Regulator Announces "Big 5" Areas of Misleading Advertising on its Radar for 2013

Consumer Advertising Law Blog

The UK advertising regulator, the Advertising Standards Authority (ASA), has published its 2012 Annual Report outlining its activities over the past year and its focus going forward.

At the heart of the report, the ASA sets out the &"big five&" priorities on which it intends to focus over the coming year, all of which concern misleading advertising in one form or another. The focus on misleading advertising is not surprising given that approximately 70% of all the cases which the ASA dealt with in 2012 concerned misleading advertising.

The "big five" concerns are:

  1. Free trials that tie unwitting consumers into an on-going paid relationship;
  2. The recent development of daily deal websites, which have exhibited "widespread problems" such as not making significant terms and conditions clear an exaggerating savings for consumers;
  3. Misleading pricing, such as "bait-pricing" and "drip-pricing" structures where subsequent charges are added to the original advertised price at later stages of the transaction (e.g. value added tax, booking fees and other surcharges);
  4. Ensuring testimonials and reviews used are genuine, and improving transparency around paid endorsements, for example paid-for celebrity endorsements on social media sites (see, by way of example, our article on professional English footballer Wayne Rooney's tweets for Nike); and
  5. Preventing misleading health claims which can have serious consequences by discouraging people from seeking proper medical advice.

Seemingly free trials, misleading health claims and misleading pricing are age-old and continuing concerns. Added to these are new problems raised by the use of social media for advertising. These include, for example, celebrity endorsements via Twitter and brands' "fan-pages" on Facebook, as well as the growth of daily-deal sites such as Groupon (the popular coupon website). These are fresh concerns for the ASA, but also of prime interest to businesses and marketers looking to advertise in new and novel ways. The key is to use these new spaces effectively, appropriately and lawfully.

The rules on misleading advertising are long and fairly complex; however the bottom line is that advertising (in whatever form it appears, for example whether online or in print form) should be decent, fair, honest and truthful and not mislead customers by exaggerating the benefits or omitting key information about a product or service or by comparing competitor products unfairly. We can expect the ASA to take a hard line on misleading advertising this year and so it is important to keep on the right side of the line.

© Arnold & Porter Kaye Scholer LLP 2013 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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