The UK’s advertising regulator, the Advertising Standards Authority (ASA), has recently issued a warning to advertisers to ensure that their marketing does not mislead or take advantage of consumers when advertising products as saving money in the cost-of-living crisis.

The warning follows a series of ASA rulings last month, banning advertisements which inaccurately claimed - directly or indirectly - that electric plug-in mini-heaters were a cheaper and more effective replacement to conventional gas heating. The advertisers failed to substantiate the claims with the ASA, noting that gas is currently cheaper than electricity and that multiple electric heaters would likely be required to provide comfort levels equivalent to a central heating system. 

The ads were found to be in breach of multiple rules of the UK Code of Non-Broadcast Advertising and Direct & Promotional Marketing (CAP Code) by making inaccurate and misleading claims. The ASA therefore ruled that the ads should no longer appear in their current form, and issued a stark notice to advertisers that they will not tolerate advertisements that fail to comply with the CAP Code and are misleading to consumers.

Traders that repeatedly offend or commit serious breaches risk being referred to the ASA’s legal backstop, Trading Standards, who can prosecute under wider UK consumer protection legislation, including the Consumer Protection from Unfair Trading Regulations 2008 (CPUT).  Breaching CPUT is a criminal offence and enforcement includes the potential for unlimited fines and, in extremely serious cases, imprisonment. In future, if the proposed Digital Markets, Competition and Consumer Bill comes into force in the expected manner, this could also result in direct action from the Competition and Markets Authority, who are anticipated to be given significant fining powers (of up to 10% of an offending trader’s annual global turnover).

The advertising regulator concluded: “As lots of us are struggling with the cost-of-living crisis, we’re keenly aware that many consumers are worried about paying their bills. … It’s important that advertisers are particularly sensitive to this moment in time, when people are looking for ways to cut back and save money”[1].

Organisations will, of course, want to communicate messages to consumers where they think there is a benefit to them in the current climate.  If you do:

• make sure you are familiar with the advertising codes which apply to your ads and also the applicable consumer protection legislation – these shall apply to any advertising claims you make about your products relating to cost-of-living benefits;
• challenge yourself as to how any claims can be substantiated by reference to recent, reputable, and objective data and hold a copy of that data before the claim is made; and
• consider whether there are any qualifications to the claims which need to be brought to consumers’ attention.

References

[1] Mini-Heater ads full of hot air - ASA CAP