Competition terms and conditions must be clearly disclosed:Plastic Box, Sports and Events Marketing admit Fair Trading breach
Published29 Oct 2003
The Commission is sending a message to all businesses running in-store competitions to clearly disclose all significant terms and conditions, following a settlement with two businesses, Plastic Box (Group) Limited and Sports and Events Marketing Limited.
Both companies admitted to breaching the Fair Trading Act in relation to an in-store 'Be in with a chance to win a Subaru Forester' promotion run in 34 Plastic Box retail outlets in late 2002.
Sports and Events Marketing underwrote the competition draw and approved the promotional material.
To enter the competition, customers were required to purchase goods to the value of $25 and to complete an entry form. The entry form was then placed in an entry box at the particular store where the goods were purchased.
Director of Fair Trading Deborah Battell said that although the representation in the prize competition was literally true, in the Commission's view, the overall impression from the promotion, in the absence of any explanatory terms and conditions, was that someone would win a Subaru Forester.
"In fact the person whose name was drawn only 'won' an opportunity to win the car through choosing one envelope from one hundred envelopes. One of those envelopes 'contained' the Subaru Forester," she said. The other envelopes contained consolation prizes.
The Commission notes that the number of businesses now promoting similar competitions is increasing and is concerned that the general public may not understand how these competitions work.
"Important terms and conditions must be clearly shown on all forms of promotional material including television advertising, flyers, posters and entry forms," said Ms Battell.
"Competitions are an important marketing tool and do affect consumers' purchase decisions. It is not acceptable to induce customers to purchase a product based on the misleading impression that they have a better chance of winning a prize than they really do," she said.
In signed undertakings, both companies have agreed to clearly disclose terms and conditions of all future prize competitions held, and to implement compliance programmes.
Media contact:Deborah Battell, Director, Fair Trading Branch
