Article

Advertising price discounts

The Office of Fair Trading (OFT) is consulting on draft guidance for businesses that advertise price discounts against their own previous prices. Three separate laws and the DTI Code of Practice on Price Indication (Code) together create a number of offences and sanctions against those engaging in
misleading price advertising. Following the OFT’s success in bringing an action against a high street clothes chain, The Officers Club, it has issued draft guidance mainly derived from the judgment in that case. It notes that:

= The key criterion of whether an advertisement is misleading is the view of the ordinary, reasonable consumer. It is unnecessary to have actual evidence from consumers.
= The question of whether an advertisement representing an own price discount is misleading depends on whether the reference price is genuine.
= In determining whether a belief is honest, the reasonableness of the belief is a factor that is likely to be taken into consideration by a court.
= The Code does not place an undue gloss or limitation on the definition of “misleading”.

In view of the legislative changes that are to be introduced in the UK by December 2007 to implement the Unfair Commercial Practices Directive (2005/29/EC), this area is likely to see further development in the near future.

For further enquiries please contact James Partridge (view full profile) on 01892 701280 or email james.partridge@ts-p.co.uk.

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