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Background:

The ASA (Advertising Standards Authority) is the body that regulates UK adverts. The ASA will take into account the impression created by business marketing as well as specific claims. It will also rule on the basis of the likely effect on consumers, not the advertiser’s intentions. Moreover, other parts of the Code include product or audience-specific restrictions aimed at protecting consumers from deceptive advertising.

Rules for business for making a marketing claim:

General:

• Advertisements must not materially mislead or be likely to do so.
• Importantly, advertisements must not mislead consumers by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
• For advertisements that quote prices for an advertised product or service, material information [for the purposes of rule 3.2] includes:
  • The main characteristics of the product or service.
  • The identity (for example, a trading name) and geographical address of the marketer and any other trader on whose behalf the advertiser is acting.
  • The whole cost of a goods or service, including taxes. Depending on the nature of the products or service, there may be delivery fees.
  • Mainly the arrangements for payment, delivery, performance or complaint handling, if those differ from the arrangements that consumers are likely to reasonably expect.
  • That consumers have the right to withdraw or cancel, if they have that right.

It doesn’t matter who sees the ads as long as they don’t mislead the public. Statements that are subjective should not be misconstrued.

• Advertisements must not imply that expressions of opinion are objective claims.
• Advertisements must not mislead by omitting the identity of the advertiser.

Since advertisers should note the law requires them to identify themselves in some advertisements, advertisers should take legal advice.

• Advertisements must not falsely imply that the advertiser is acting as a consumer or for purposes outside its trade, business marketing, craft or profession. Advertisements must make clear their commercial intent, if that is not obvious from the context.
• No advertisement may utilize pictures that are only visible for a short period of time, or any other method that is likely to affect customers, unless consumers are fully aware of the situation.

Substantiation

• Broadcasters must hold documentary evidence to prove claims that the audience are likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation.

Qualification

• Advertisements must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify.
• It is important to present qualifications clearly. BCAP has published guidance on superimposed text to help television broadcasters ensure compliance with rule 3.11.

Exaggeration

• Advertisements must not mislead by exaggerating the capability and performance of a product or service.
• Business marketing must not present rights given to consumers in law as a distinctive feature of the advertiser’s offer.
• Companies are not permitted to pretend that their assertions are commonly accepted in the case of significant disagreements among scientists or educated people. Also advertisements must not mislead about the nature or extent of the risk to consumers’ personal security or that of their families if they do not buy the advertised product or service.

Prohibited claims

These rules apply regardless of any substantiation presented in support of the claims.

• Advertisements must not claim that a product or service is able to facilitate winning in games of chance.
• Advertisements must not explicitly claim that the advertiser’s job or livelihood is in jeopardy if consumers do not buy the advertised product or service.

Prices:

Background

Price statements in advertisements should take into account the Chartered Trading Standards Institute’s Guidance for traders on pricing practices.

Definition

Generally, price declarations include exact pricing information along with an explanation of the pricing methodology.

• In addition, price statements must not mislead by omission, undue emphasis or distortion. They must relate to the product or service depicted in the advertisement.
• Quoted prices must include non-optional taxes, duties, fees and charges that apply to all or most buyers. VAT-exclusive pricing is possible if all the people to whom the price claim is clearly targeted do not pay VAT or are able to recover VAT. Such VAT-exclusive prices must be accompanied by a prominent statement of the amount or rate of VAT payable.
• It is not possible to calculate ahead of time taxes, duties, fees and charges. For example, it may depend on the consumer’s circumstances. It must be stated if the figure is included in the price.
• However, business marketing/advertisements that quote instalment costs must state the total price of the advertised product or service and the instalment frequency as prominently as the cost of individual instalments.
• Advertisements that state prices, must also state applicable delivery, freight or postal charges or, if those cannot reasonably be calculated in advance, state that such charges are payable.
• To obtain the advertised price, advertisements must explain the commitment consumers must make to obtain the advertised product or service.
• Moreover, using price statements with terms like “up to” and “from” can overstate the benefits customers can obtain.

Free claims:

Principle

Advertisements must not describe a product or service as “free”, “gratis”, “without charge” or similar if the consumer has to pay anything other than the unavoidable cost of responding to the promotion and collecting or paying for delivery of the item.

• Advertisements must make clear the extent of the commitment consumers must make to take advantage of a “free” offer. Advertisements must not describe items as “free” if:
  • Consumers have to pay for packing, packaging, handling or administration of the “free” product or service
  • Or the cost of response, which includes the price of a product or service that customers must purchase in order to take advantage of the offer, has grown, unless the increase is due to circumstances unrelated to the promotion’s cost.
  • Consumers must now buy a lower-quality product.
• Commercials must not describe an element of a package as “free. The package price should include that element unless consumers are likely to consider it an additional benefit.
• Advertisements must not use the term “free trial” to describe a “satisfaction or your money back” offer or an offer for which a non-refundable purchase is required.

Availability

• Advertisers must satisfy broadcasters that their estimates of demand are reasonable.
• Advertisements/business marketing that quote prices for featured products must state any reasonable grounds the advertisers have for believing that they might not be able to supply the advertised (or an equivalent) product at the advertised price, within a reasonable period and in reasonable quantities. In particular:
  • It is necessary to display in advertisements that there is a greater demand than there is supply.
  • As the aim of the advertisement is to assess demand, the advertiser must disclose if he or she does not intend to fulfill orders.
  • Advertisements must not mislead consumers by omitting restrictions on the availability of products; for example, geographical restrictions or age limits.
• Broadcasters should screen for switch selling techniques when advertising products at specific prices.
• Advertisements must not falsely claim that the advertiser is about to stop trading or move premises. They must not falsely state that a product or service, or the terms on which it is offered, will be available only for a very limited time to deprive consumers of the time or opportunity to make an informed choice.
• Advertisements/business marketing must not mislead consumers about market conditions or the possibility of finding the product or service elsewhere to induce consumers to buy the product or service at conditions less favourable than normal market conditions.

Comparisons:

Principle

The ASA will consider unqualified superlative claims as comparative claims against all competing products or services.

It is necessary to validate superiority claims (that is, claims that consumers are unlikely to take literally) when they are not puffery. Objective superiority claims must specify the feature of the product or service that is claimed to be superior, as well as the advertiser’s performance.

Comparisons with Identifiable Competitors

• Advertisements that include a comparison with an identifiable competitor must not mislead, or be likely to mislead, consumers about either the advertised product or service or the competing product or service.
• Also advertisements must compare products or services meeting the same need or intended for the same purpose.
• Advertisements must objectively compare one or more material, relevant, verifiable and representative feature of those products or services, which may include price.
• Advertisements must not create confusion between the advertiser and its competitors. Or between the advertiser’s product or service, trade mark, trade name or other distinguishing mark and that of a competitor.
• Certain EU agricultural products and foods are protected because of their unique geographical area and method of production. The “designation of origin” provides them with special protection. Products with a “designation of origin” that has been registered should only be compared to other products with the same designation.

Other Comparisons

Advertisers shouldn’t be able to gain an unfair advantage from comparison by picking elements that increase their effectiveness. Advertisements that include comparisons with unidentifiable competitors must not mislead, or be likely to mislead, consumers.

Price Comparisons

• Advertisements that include a price comparison must make the basis of the comparison clear.
• Price comparisons must not mislead by falsely claiming a price advantage. Comparisons with recommended retail prices (RRPs) can be deceptive when they differ substantially from the price at which a product or service is typically offered.

Imitation and Denigration

• Advertisements must not mislead consumers about who manufactures the product.
• Advertisements must not discredit or denigrate another product, advertiser or advertisement or a trade mark, trade name or other distinguishing mark.
• The advertisements must not take unfair advantage of the reputation of a competitor’s trade mark, trade name or other distinguishing mark or of the designation of origin of a competitor product or service.
• Advertisements must not present a product as an imitation or replica of a product or service with a protected trade mark or trade name.

Endorsements and testimonials:

Background

Advertisements that include endorsements or testimonials might also be subject to Section 6: Privacy.

Rules

• Unless they are blatantly fake, testimonials or endorsements used in advertising must be authentic and backed up by documented proof. Endorsements and testimonials must be relevant to the offered product or service. In advertisements, disputes must not be taken as absolute truths, nor should they lead consumers astray.
• Advertisements must not feature testimonials without permission.
• The advertisements must not display a trust mark, quality mark or equivalent without the necessary authorisation.
• The Advertisements must not claim that the advertiser (or any other entity referred to in the advertisement) complies if it hasn’t or isn’t complying with the terms of the approval, endorsement, or authorisation.
• Advertisers should not falsely suggest they are signatories to a code of ethics. Advertisements must not falsely claim that a code of conduct has an endorsement from a public or other body.

Guarantees and after-sales services:

• Advertisements must not use the word “guarantee” in a way that could cause confusion about a consumer’s rights.
• A public money-back promise must reassure broadcasters that advertisers will quickly honour claims from legitimate customers.
• Advertisements shall not fraudulently represent or suggest that after-sales assistance is available in a member state of the European Economic Area where the promoted product or service is not supplied.
• Where the trader is located offers after-sales service but the after-sales service is not available in the language of the advertisement, it is important for radio and television stations to be confident that advertisers will explain this adequately to the public before they sign contracts.

For expert assistance regarding guidance on business marketing and misleading advertising or any other compliance matters, contact help@bizlawuk.co.uk or WhatsApp us on 07583452230 and we can connect you to the right business law professional. Visit https://www.bizlawuk.co.uk to find out more about how we can help you with our other business services, check our 5-star testimonials and watch our Youtube channel or listen to our podcasts. If you find this information useful, please follow our social media platforms, like, and share.