UK prize draws that hoodwink consumers into paying to claim their prizes have been ruled illegal in a landmark judgment at the High Court, which should finally bring the curtain down on dodgy promotions.
The Office of Fair Trading brought the case against five large-scale UK prize draws under new consumer regulations.
In one case, 1.5 million people were sent letters telling them they had won one of a list of prizes, including £25,000 in cash. But some 99.92 per cent of recipients were allocated cheap electrical goods and encouraged to call a premium rate line to claim them.
Five businesses behind the promotions were told in the High Court that they faced enforcement orders.
They were: Purely Creative, Strike Lucky Games, McIntyre & Dodd Marketing, The Winners Club, Dodd Marketing and a number of their directors.
The judge, Mr Justice Briggs, found that the infringements had occurred on a large scale and very large numbers of consumers had been sent the promotions.
As well as being encouraged to phone a premium rate line to claim the prize, recipients had to pay £8.50 for insurance and delivery.
Some of the promotions used scratchcards inserted in national newspapers.
These consumers were also encouraged to phone a premium rate line to find out about their prizes and they might have been charged a fee before the prizes were sent out.
Typical prizes were ferry rides, holiday accommodation or watches. But often the value of the prize was less than the fee charged to the consumer.
Some of the travel prizes also involved two weeks’ notice and required people to pay for their own flights and transfers.
The fair trading watchdog said this was the first “substantive” case before the High Court under the Consumer Protection from Unfair Trading Regulations, which came into force in 2008.
“This judgement has helped to clarify how the law applies to prize promotions, and vindicates our position that it is not acceptable to tell consumers they have won a prize, when in fact they are simply being given the chance to buy it,” said Jason Freeman, legal director of the Office of Fair Trading’s consumer group.
“The companies’ business model depended on consumers not being aware of the full facts, and as a result spending significant sums on premium phone services and delivery charges. The defendants profited from misleading people, and this judgement means they will have to change their conduct considerably.”
Last week, the Metropolitan Police closed five virtual offices used by direct mail scammers and seized thousands of letters in a major clampdown on rogue overseas operators.
Related stories:
Met acts on overseas scammers
Prize draw ‘suckers’ list exposed
