OFFICE OF FAIR
TRADING News Release (86/08) issued by The Government News Network
on 23 July 2008
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.
NOTES
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.
http://www.oft.gov.uk
PUBLIC enquiries: 0845 7224499 enquiries@oft.gov.uk
OFT
reports and consumer information leaflets are available free
from:
OFT, PO Box 366, Hayes UB3 1XB 0800 389 3158 oft@ecgroup.uk.com