I received a query today about a fairly common promotional offer found online. The way the offer typically works is that a website visitor is offered a free download, typically a guide, information ebook or some other handy document, in exchange for opting into an email newsletter which is then used to market the website proprietor’s products and/or services. These sorts of offers are often attractive because the download contains useful information and the person making the offer is the sort of person you want to hear from in future. That said, these sorts of offers can also offer minimal value in exchange for your personal information which is very valuable. In this particular case, a visitor to the offeror’s website asked the following question:
Please advise why I am being forced to sign up to your newsletter and receive communication from you in order to get the template that you advertise for free? It’s misleading.
I’m sure that under the new consumers protection act this is not allowed.
The question here is whether the Consumer Protection Act deals with these sorts of promotions and, if it does, what it says about them. The short answer is that the Consumer Protection Act does, indeed, appear to deal with this sort of promotion and the exchange that is often required in order to take advantage of the promotion. The basis probably isn’t that the offer is misleading (unless the exchange isn’t clearly stated) but more on the basis of at least two sections of the Act I outline below.
Section 34 of the Consumer Protection Act deals with “Trade coupons and similar promotions”. It defines promotional offers as follows:
an offer or promise, expressed in any manner, of any prize, reward, gift, free good or service, price reduction or concession, enhancement of quantity or quality of goods or services, irrespective of whether or not acceptance of the offer is conditional on the offeree entering into any other transaction.
In the case of the offer made on the website I was asked about, the offer was for a free download. In other words, it was an offer of a gift and satisfies the definition of a “promotional offer” in section 34. The section goes on to deal with a number of conditions for promotional offers including the information offerors must present to prospective offerees:
- the nature of the prize, reward, gift, free good or service, price reduction or concession, enhancement of quantity or quality of goods or services, or other discounted or free thing being offered;
- the goods or services to which the offer relates;
- the steps required by a consumer to accept the offer or to receive the benefit of the offer; and
- the particulars of any person from whom, any place where, and any date and time on or at which, the consumer may receive the prize, reward, gift, free good or service, price reduction or concession, enhancement of quantity or quality of goods or services or other discounted or free thing.
The Consumer Protection Act’s application to these offers doesn’t stop with section 34. Section 13 deals with consumers’ right to select suppliers and deals with a practice known as “bundling” which takes place when goods or services are supplied on condition that the consumer accept extras like warranties and related products and services. Section 13 states, among other things, that a supplier can’t make entering into “an additional agreement or transaction with the same supplier or a designated third party” a condition of its product or service supply. In the context of this free download offer, that prohibition may prevent an offeror from offering a free download as a gift in exchange for the offeree agreeing to sign up for an email newsletter.
That said, bundling is acceptable if the supplier can justify it on grounds set out in section 13. These grounds include whether there is an economic benefit for the consumer by bundling the products and/or services. In the absence of such a justification, it appears that the Consumer Protection Act doesn’t have much tolerance for these sorts of offers.
