Costly prizes breach EU laws, judges rule

Friday 19 October 2012

COMPANIES tantalising consumers with prizes which then cost money to claim or use are breaching European Union law, judges have ruled.

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Such "aggressive" trading is outlawed even if claiming the prize costs only the price of a postage stamp, said the European Court of Justice.

The verdict is a victory for the UK's Office of Fair Trading in a test case against Purely Creative and four other firms specialising in offers by mail or in news-paper advertising.

Such offers break EU laws on "unfair business-to-consumer commercial practices in the internal market" if the winner incurs any cost at all, said the ruling.The Office of Fair Trading took UK legal action but the Court of Appeal sent the case to the Luxembourg judges to clarify whether rules ban schemes which involve even a small cost to those claiming prizes.The judgment said: "EU law prohibits aggressive practices which give the consumer the impression that he has already won a prize, while he is obliged to pay money or incur a certain cost in order to be informed of the nature of that prize or to take certain action to acquire it."The judges cited cases where consumers received letters, or were offered scratchcards or saw "advertising inserts" in papers and magazines informing them they had won a prize or other benefit.The winner was offered options for discovering the exact prize and getting a claim number – from dialling a premium rate number, texting or sending a letter. Call costs were given, but consumers were not told the promotions company received a share of such costs.Purely Creative's website says the company devises a games carried in leading UK and Irish newspapers and magazines. It said that in 25 years it has paid out more than £7 million in cash prizes as well as luxury holidays and other goods. It adds: "We want everyone who takes part in one of our games to thoroughly enjoy the experience."

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Costly prizes breach EU laws, judges rule

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