Prize-claim contests ruled illegal

Companies tantalising consumers with “prizes” which then cost money to claim or use are breaching EU law, judges have ruled.

Such “aggressive” trading is outlawed even if claiming the prize costs only the price of a postage stamp, said the European Court of Justice.

Yesterday’s verdict is a victory for the UK’s Office of Fair Trading in a test case against Purely Creative and four other companies specialising in offers by mail or in newspaper advertising.

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Whether the prize at stake was of little or high value, such offers break EU laws on “unfair business-to-consumer commercial practices in the internal market” if the prize winner incurs any cost at all, said the ruling.

The Office of Fair Trading took UK legal action but the Court of Appeal sent the case to the Luxembourg judges to clarify whether the EU rules – part of the UK’s Consumer Protection from Unfair Trading regulations since 2008 – ban schemes which involve even a small cost to consumers claiming prizes.

Yesterday’s judgment in Luxembourg said: “EU law prohibits aggressive practices which give the consumer the impression that he has already won a prize, while he is obliged to pay money or incur a certain cost in order to be informed of the nature of that prize or to take certain action to acquire it.

“The court makes clear that such practices are prohibited even if the cost imposed on the consumer is minimal (such as that of a stamp) compared with the value of the prize or where it does not procure the trader any benefit.

“In addition, those aggressive practices are prohibited even if a number of methods are offered to the consumer in order to obtain the prize and even if one of those methods is free of charge.”