Office of Fair Trading
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OFT wins landmark Dutch court case
In a landmark cross border case a Dutch Court has granted the OFT an injunction stopping Best Sales B.V., a mail order company, from sending misleading prize draw mailings to UK consumers.
Best Sales B.V., a Dutch company trading as 'Best Of' and 'Oliveal', sent unsolicited mailings to UK residents offering household goods and health remedies. The OFT believed that the mailings were misleading since they appeared to notify UK consumers of a large prize win, typically £5,900 or £10,000. The OFT also considered that the mailings implied that to receive a large prize, or in order to receive this prize faster, the consumer had to make a purchase from an accompanying catalogue.
The OFT initiated proceedings against Best Sales B.V in the Commercial Court in Breda in the autumn of 2006, following receipt of consumer complaints. The court ruled in favour of the OFT and granted an injunction on 9 July 2008.
In their ruling, the presiding judges stated: 'It is clear that the content and layout of the mailings at issue have been designed with the intention of convincing the consumer that he will absolutely win the amount on the cheque stated in the mailing' and that the numerous misleading statements made in the mail shots were 'intended to give a false representation of the facts with the intention of persuading the consumer to place an order for the products in the catalogue.'
This is the first court order that the OFT has gained in the Netherlands and only the second ever cross border injunction sought by the OFT. The injunction prevents Best Sales B.V. from continuing to send misleading mailings to UK consumers. Failure to comply with the injunction will result in a 1,000,000 Euro fine for each offending mailing sent. Best Sales B.V. are also required to place an agreed statement in two national UK newspapers apologising for having misled UK consumers.
Mike Haley, OFT Director of Consumer Protection, said:
'The judgment sends a clear message to direct mail publishers across Europe that such misleading prize draw advertising is unacceptable. The case also demonstrates that the OFT will not hesitate to pursue those responsible either directly in the European courts or through our European enforcement partners.'
Consumers who receive unsolicited prize draw mailings and are unsure whether they have won anything should call Consumer Direct for clear, practical consumer advice on 08454 04 05 06 http://www.consumerdirect.gov.uk.
1. The OFT commenced proceedings in the commercial court in Breda for breaches of the Dutch implementation of the Misleading Advertising Directive (see note 4). An interim court hearing was held on 10 October 2006 (see press release 137/06). The court found against the OFT in an interim judgment.
2. A court hearing in relation to the full proceedings was held on 4 December 2007 and the judgment in favour of the OFT made on 9 July 2008.
3. Part 8 of the Enterprise Act 2002 gives effect to the Injunctions Directive in the UK and gives the OFT, other general enforcers and designated enforcers which are public bodies, the power to take action against businesses in other European Union countries that are infringing certain European-based consumer protection legislation, such as legislation implementing the Misleading Advertising Directive. When a business based in another EU country harms the collective interests of UK consumers, the OFT will normally ask the relevant community enforcer to take enforcement action under the Consumer Protection Cooperation Regulation. However, the OFT is able to take action in other EU member states if no community enforcer can act.
4. Under Council Directive 84/450/EEC on Misleading Advertising an advertisement is misleading if it 'in any way, including its presentation, deceives or is likely to deceive the persons to whom it is addressed or whom it reaches and which, by reason of its deceptive nature, is likely to affect their economic behaviour or which, for those reasons, injures or is likely to injure a competitor'.
5. The OFT took its first successful cross-border court case against Duchesne SA, based in Belgium, in 2004 (see press release 208/04).
6. Consumer Direct is a telephone and online consumer advice service funded by government and managed by the Office of Fair Trading. It offers consumers clear, practical and impartial advice and information.
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