It is vital that your advertisements comply with the law. Advertising is regulated by a mixture of legislation and self-regulation. You could suffer negative consequences if you get your advertising wrong. This could include:
- Bad publicity which damages your reputation and brand.
- Censure (severe disapproval) from regulatory bodies such as the Advertising Standards Authority (ASA), the Information Commissioner’s Office or the Direct Marketing Association.
- A referral to the Trading Standards Services (TSS) which could lead to court action and criminal prosecution.
- Legal action from consumers or competitors.
- Failure to get advertising space.
- Expensive recall of advertising followed by reprinting.
- Wasted media space.
- Product recalls.
- A loss of consumer confidence in your business.
The main legislation that governs the claims made in advertising is the Consumer Protection from Unfair Trading Regulations 2008 (CPUT). It:
- Prohibits unfair commercial practices, including advertising.
- Blacklists 31 unfair practices (Schedule 1). These are always unfair and prohibited.
- Prohibits misleading actions (false or misleading information).
- Prohibits misleading omissions (omitting, hiding, or providing unclear information).
- Prohibits aggressive practices (harassment, coercion, or undue influence).
- Prohibits commercial practices which contravene professional diligence.
- Provides for the public enforcement of the CPUT Regulations (breach of the CPUT Regulations can be a criminal offence).
- Provides consumer claims for civil redress regarding certain breaches, including rights to refund.
- It primarily deals with business to consumer practices but can also deal with business to business practices that could affect consumers or, a trader buying a product from a consumer.
Other legislation and common law which is applicable to advertising incudes:
- Laws that govern business to business and comparative advertising. This includes the Business Protection from Misleading Marketing Regulations 2008 which contains prohibitions on advertising that misleads traders and regulates comparative advertising by businesses.
- Sector specific legislation for sectors such as gambling, tobacco, food, financial services, and health products.
- Intellectual property law which controls the use and misuse of trade marks, music, images, and other material used in advertising.
- Defamation law (when making statements about competitors).
- The law of passing off (when an advert suggests a product is made by or associated with a third party).
- Privacy law (when an advert suggests that an individual uses or endorses the product).
There are two main self-regulatory codes which are:
- The United Kingdom (UK) Code of Broadcast Advertising (BCAP Code) governs television and radio broadcasts.
- The UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (CAP Code) governs non-broadcast advertising such as internet, mail, telephone, and press.
Both codes echo and expand on the rules set by legislation. The CAP Codes key principles include:
- Advertising must be legal, decent, honest, and truthful.
- Advertising copy must be made with a sense of responsibility to society and consumers. It must respect the principles of fair competition.
- Advertisements must not mislead.
- Advertisers must have documentary evidence to prove any claims they make before submitting an advertisement for publication.
If there is a breach of the BCAP or CAP Code, the ASA can request that the advertisement is amended or withdrawn. They can ask publishers and broadcasters to deny advertising space. The ASA will make its rulings public and can refer offenders to Ofcom and TSS which could lead to legal action.