Is it a prize if you have to pay a fee?

Was the prize promotion this ASA ruling relates to a scam? (As you may or may not know, Prizeology isn’t keen on scams.) OK, strictly speaking perhaps it wasn’t a scam, but nonetheless it used the promise of a prize to pull people in and generate potential sales leads, and it certainly wasn’t as clear and transparent as a prize promotion should be. (Again, as you may or may not know, Prizeology is very big on this stuff).

The banner on the website read, ‘Enter to WIN! 7 nights free holiday accommodation.’ All you had to do was fill in your details, so the complainant did that, because he thought, well, why not give it go? A few days later he received a phone call informing him that, while he hadn’t won the top prize, he had won a runners-up prize. That sounded good, but he was then told that to claim his prize he must pay a fee. This didn’t seem right to him, so he contacted the ASA and questioned whether the promotion breached the CAP code.

Prize purchase

The website in question was called Sky Breaks and it was run by a company called Easy Consulting SL, who told the ASA that ‘every week or two’ it conducted a draw, which produced a prize winner, who did not have to pay anything towards their prize. However, ‘between eight and 15 runners-up’ were offered the chance to book the (presumably same) accommodation for a week for a mere £59 administration fee. This opportunity was presented on what was described as a ‘non-obligatory purchase basis’.

The CAP Code states that all prize promotions material must communicate the significant conditions or information, particularly where the omission of such conditions or information is likely to mislead. Significant conditions usually include the nature of the prizes and how many are available.

Runners-up ruse

Now in some promotions it’s not possible to determine the exact number of prizes that will be won, but if that is the case there still needs to be a reasonable estimate of the number and type of prizes. No estimate was given for this promotion and indeed the Sky Breaks website made no mention of runners-up prizes at all.

In its ruling, the ASA agreed that the original promotion did not include any information about the runners-up prizes, which, it said was information that was likely to influence a consumer’s decision to enter and understanding of the promotion. It also pointed out that the CAP Code says promoters must not falsely claim or imply that a consumer would win a prize if they completed a particular act – for example paid a fee.

Adminstration fee

Even if the cost was described as an ‘administration fee’, what was effectively happening in this so-called prize promotion was that people could book the accommodation for a certain price. I don’t know what would then have ensued, but my guess is that they would find they were offered other goods or services on a ‘non-obligatory purchase basis’ and, although it might have been non-obligatory, I suspect it would have been a pretty hard sell.

Actually, we did some digging into Easy Consulting SL and found a little more about it on – and somehow this is not surprising – the website of the Timeshare Association, including the fact that it had had a complaint against it upheld by the ASA on a previous occasion.

Anyway, the ASA’s instructions to Easy Consulting SL were to ensure their future promotions included all significant conditions, including information about the number and nature of prizes, and that they should not falsely claim that consumers had won a prize if they were required to incur a cost to claim it.

You can trust Prizeology to run a fair promotion that’s compliant with the CAP Code. To get in touch, just give us a call on 020 7856 0402 or drop us a line on hello@prizeology.com.

Sarah Burns is Prizeology’s Chief Prizeologist and an industy expert in promotional compliance.

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