In this blog I’d like to draw your attention to a recent story in the Yorkshire Post. The paper reports that in January York Magistrate’s Court fined a company £150,000 and ordered it to pay £10,000 in costs, after it was found guilty of perpetrating a postal scam.
The company, which is called Kingstown Associates Ltd, is based in the town of Driffield, which is east of York, north of Hull and in the lovely Yorkshire Wolds, hence the Yorkshire Post’s interest, and it sent thousands of elderly people a prize promotion which informed them that they’d won a substantial cash prize.
The promise of a cash prize
In fact, there were two prize promotions sent between January and June 2018, one in a leaflet titled Healthy Living Direct and the other in All the Very Best, but both gave the impression that the addressees were guaranteed a share of prize money worth tens of thousands of pounds.
What the promotions omitted to say, however, was how many people were likely to claim their prize and what proportion of the prize fund would be paid out to each individual. When Yorkshire and the Humber National Trading Standards Regional Investigations Team looked into this, it found that 11,016 people claimed a share of the Healthy Living Direct cash – and each one received a measly 91p.
Make a purchase to make a claim
What’s more, in order to claim their cash prize, Kingstown Associates, which describes itself as a mail order company and owner of a number of lifestyle brands predominantly aimed at the over 60s, insisted that would-be winners purchased products from them first.
You know the kind of items we’re talking about (a bunion toe spreader is the offer of the month in the copy of Healthy Living Direct that can be seen on the Kingstown website’s home page) and only having bought goods they probably didn’t need did people find out how much – or in this case, how little – they had won.
Promotions that broke the law
Kingstown’s fake prize promotions conned thousands of elderly people into believing they had a windfall coming to them. This wasn’t just sharp practice, though, it was illegal practice and the type of activity that is banned under the Consumer Protection from Unfair Trading Regulations 2008.
The regulations say it is against the law to create the false impression that a consumer has already won, will win, or will, on doing a particular act, win a prize or other equivalent benefit, when in fact there is no prize or other equivalent benefit.
Not a first-time offender
I should point out, though, that Kingstown was not without form in this area, either, because it has had complaints against it about not entirely dissimilar issues upheld by the ASA before. In a June 2016 ruling, the ASA told Kingstown Associates “not to state or imply in future that consumers had won a prize if they had not, and not to misleadingly exaggerate consumers’ chances of winning prizes.” You can read about that in full here.
In fact, commenting on the recent court case, Miles Lockwood, who is the ASA’s Director of Complaints and Investigations, said, “We welcome the sentencing handed down to Kingstown Associates Ltd for its scam promotional mailings… Its direct mailings gave the impression that recipients would definitely receive an award when that was not the case and were in fact subject to various significant conditions that treated consumers unfairly and were misleading.”
Prosecution is a real possibility
Actually, it’s relatively rare for postal scams like the Kingstown one to come to court, because although they’re sadly all too common, reporting rates are low, plus the authorities no doubt avoid prosecution if at all possible, due to the effort and expenses required.
What this case shows, however, and the reason why I wanted to draw your attention to it, is that prosecutions do take place and they can result in substantial fines being issued. That’s one of the reasons why it’s important for businesses which are running promotions to follow the rules.
And finally, on a more positive note, one way to prevent you, your family and anyone else you know falling victim to this type of postal scam is to join the excellent Friends Against Scams initiative, which works to help people learn to identify – and thus avoid – all types of scam.
Prizeology only ever runs prize promotions that are legally compliant – and is absolutely committed to raising awareness of fake prize promotions and scams – so if you’d like Prizeology to run a legally compliant promotion for you, get in touch.
Sarah Burns is Prizeology’s Chief Prizeologist and a National Trading Standards Scams Team Scambassador.
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