Most businesses are aware of the ASA, the Advertising Standards Agency, who enforce the Committee of Advertising Practices Code.
The ASA handle a large number of cases on a weekly basis – last week making findings in 6 cases (with 50/50 upheld/not upheld), and informally resolving 21. And cases can be raised as a result of a single complaint – often a competitor or related business, or a campaigning organisation who take exception to your ad campaign.
But they can also be raised by a single customer who disagrees with your returns policy. That customer need not even have made a purchase – the ASA regulates how you advertise your products, not your actual activities.
The ASA is an independent industry regulator, and so their enforcement action is voluntarily accepted by the advertising industry without statutory backing. However an enforcement action from the ASA can have a significant impact on your ability to secure advertising, and as they are widely published, on the perception of your business by the public.
Many businesses don’t realise that the ASA have the power to take action if you fail to comply with your obligations to consumers. However, it’s not the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 – the successor of the Distance Selling Regulations – that they are enforcing. Instead, it’s their own paraphrase of these Regulations, as set out in the CAP Code (otherwise known as the UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing).
Section 9 of the Code sets out what you must do so as to stay within the rules. And whilst it’s broadly equivalent to the Regulations, it is slightly different.
Togs4specialsprogs had done a great job of ignoring both the Regulations and the Code. Their website specified that no refunds were available unless goods were faulty – a clear breach of both.
The ASA, unsurprisingly, told Togs4specialsprogs to ensure that in future, their marketing communications included sufficient information about cancellations of orders and refunds, and that they refunded customers promptly, when requested, in line with the requirements of the CAP Code. But they would be well advised to look at the Regulations too.
The same, but different
As we mentioned above, the Code and the Regulations are broadly equivalent, and cover much of the same ground. In most cases, if you comply with the Regulations, you will comply with the Code. But it’s worth noting that the opposite is not always the case.
For example, the current version of the Code allows for consumers to cancel a contract within 7 clear working days after delivery; the Regulations state 14 days after the day on which the goods came into the physical possession of the purchaser.
The Code doesn’t deal with whether or not delivery charges need to be refunded; the Regulations make it very clear that basic delivery costs should be (although more expensive options chosen by the consumer need not – a useful change in the Regulations which wasn’t in the original Distance Selling Regime).
But whilst the Code isn’t always as detailed as the Regulations, it does also bring some additional narrative, which can be very useful to consumers. For example, it makes it very explicit that customers may try out products (other than software or other media) and still be entitled to cancel – whilst this is intended to be the effect of the Regulations, it isn’t set out so clearly.
The Code also has forays into other areas governed legislatively elsewhere, including data protection, but also relating to advertising in specified industries, such as political, health, beauty, weight control, financial, motoring, food and tobacco. Finally, it covers advertising to children.
So even if you are in a highly regulated sector and complying with your regulator’s guidance, remember that the ASA could also get involved.
There are two key takeaways from this case. Remember that:
- the ASA can enforce consumers rights around the execution of your relationship with them, not just the advertising of it. In a world where many businesses often rely on the barriers to consumers enforcing their rights to reduce the burden on their business, this may come as a shock, particularly as a ruling may be made based on just one complaint;
- the Code and the Regulations are different. Complying with either one won’t get you all of the way there. The simplification of distance selling promised by the Regulations isn’t quite there yet!
We have provided updates on the Consumer contracts (Information, Cancellation and Additional Charges) Regulations 2013 and other ASA enforcement activity previously.
For more information, or assistance in verifying that your distance selling processes match with the Regulation and the Code, please contact Jonathan Armstrong or Gayle McFarlane.
Jonathan Armstrong, Cordery, Lexis House, 30 Farringdon Street, London, EC4A 4HH
Office: +44 (0)207 075 1784
Gayle McFarlane, Cordery, Lexis House, 30 Farringdon Street, London, EC4A 4HH
Office: +44 (0)207 118 2700