Phoenix Media (UK) Limited, which trades as Techtron Games, distributed 1.7 million promotional envelopes with various national publications, telling consumers that they could have won a "life-changing prize" if they had a winning prize code.
Consumers were urged to act quickly to claim their prize by calling a premium rate number. Calls were charged at £1.50 per minute and lasted for up to seven and a half minutes. The total cost of each call was up to £11.25. Over 16,700 people called the premium rate numbers used in the promotion.
The OFT considered that the envelopes were misleading, as their layout and presentation gave the impression that the recipient had won a major cash prize of £25,000. In fact, nearly everyone who responded received the 'giveaway' item of a holiday cruise voucher, which was subject to significant restrictions on its use and was misleadingly described in the promotion as a 'Caribbean Cruise'.
The OFT further considered that the envelopes gave the misleading impression that the cruise voucher was a major prize and that recipients had been particularly fortunate, in relation to other recipients, to win a prize. Of course, everyone was a 'winner'.
The consumer watchdog took action against the company and its officers under The Control of Misleading Advertisements Regulations (CMARs) 1988, which give the OFT the power to step in where it is in the public interest that an advert should be stopped and future misleading ads prevented.
As a result, the firm and its officers, Gillian and Steven Christie, have now given the OFT undertakings that they will not use misleading advertising to promote such competitions in future. If the undertakings are breached the OFT is empowered to seek a court injunction against the promoters, which, if disobeyed, could result in proceedings for contempt of court.
"These advertisements were highly misleading and encouraged consumers to make expensive phone calls in the hope of receiving a major cash prize," said OFT Chief Executive John Fingleton. "The OFT will continue to crack down on advertisers who make misleading claims which harm consumers' interests and discredit legitimate marketing techniques."
