Law to ban word 'free' to impact on marketing industry
Law firm McGrigors has warned the marketing community that it has less than two weeks to ensure its marketing practices meet new laws that could ban the word 'free'
The Consumer Protection from Unfair Trading Regulations 2008 contains a blacklist of banned practices, including the controversial provision that promotions using the words ‘free’ and ‘gratis’ will no longer be allowed in most situations.
Confusion still surrounds this provision, which would seem to technically ban BOGOF deals and free gifts with purchases, as the UK government has indicated that it does not believe that the new rules will prevent use of "free" in these ways. Adverts targeting children will also be forbidden where they directly urge children to buy products (or to persuade their parents to buy products for them). In addition, a company must not represent itself as a consumer in marketing material through created testimonials etc.
Furthermore, the legislation introduces for the first time in the UK a general obligation on businesses not to treat consumers unfairly. This catch-all clause will operate where the specific rules do not apply.
The new regulations come into force on 26 May 2008. The penalties for not meeting the changes in the law are stiff. Enforced by the OFT and Trading Standards Department, penalties include a fine up to the statutory maximum or, on indictment, a fine and/or up to two years imprisonment.
Hermione Hague, a senior associate in McGrigors’ Edinburgh office, said: “The marketing and retail sectors need to look carefully at whether their practices can objectively be deemed as fair. Without specific rules to follow, it is difficult to know exactly what in the eyes of the OFT and Trading Standards is fair. Once the law has changed, we should get a feel for what is and is not acceptable as the OFT and Trading Standards start to bring their first cases. In the meantime, our advice is to err on the side of caution to avoid becoming one of the precedent-setting cases with all the associated negative PR.”
Retailers and marketers concerned that their existing or new marketing activity might be affected by this legislation should talk their lawyers and to Trading Standards, to help them to understand where any problems might lie.