Note: This advice is given by the CAP Executive about non-broadcast advertising. It does not constitute legal advice. It does not bind CAP, CAP advisory panels or the Advertising Standards Authority.
A “free entry” route or “no purchase necessary” (NPN) route allows consumers to enter a promotion without paying or by paying no more than the minimum unavoidable cost of entering a promotion (for example the standard rate of postage, the cost of a telephone call or the minimum, unavoidable cost of sending an e-mail or SMS text message). We have been asked whether promoters could require participants to call a premium-rate service if the cost of making that call was less than, or equal to, the cost of a first-class stamp. CAP believes that that is unlawful. But it considers that directing participants to a website address is an acceptable free entry-route.
For many years, promoters used to include NPNs to avoid running illegal lotteries (in which the promoter required payment and the distribution of prizes was based on chance). But on 1 September 2007, the Gambling Act 2005 came into force, replacing for all but Northern Ireland, the existing legislation. The CAP Code reflects the law and requires marketers to ensure all marcoms, including promotions, are legal. Because of the introduction of the Gambling Act and subsequently the Consumer Protection Regulations (CPRs), we urge marketers to take legal advice if they are unsure about the legality of their promotion. CAP’s understanding, which is not legal advice, is that for many chance-based promotions a “free entry” route is no longer required, for example, having to buy a product to enter a prize draw is OK, provided the cost of that product has not been changed to reflect the opportunity to participate. What that means is that, if participants have to buy a widget to enter a prize draw, that promotion is likely to be considered lawful if the widget cost the same before and during the promotion.
Promotions, that require entrants to exercise enough skill or judgement that a significant proportion of people will be filtered out, may require a payment to enter without offering a free-entry route (see ‘Sales Promotion: Competitions’). Such promotions might include tie-breakers, which are judged on subjective criteria, but would exclude competitions that feature questions nearly everyone is likely to get right. Questions such as “What is the capital of England?” are unlikely to be considered challenging enough and would make the promotion that relies on chance.
The Gambling Act 2005 does not extend to Northern Ireland and promoters of chance-based promotions will almost certainly have to offer a free-entry route.
Information about the free-entry route should be of a size and form that is readily found, equitable, understood and used by consumers. It should also be genuine and realistic and promoters should not discriminate against those who want to enter the promotion using the free-entry route.
In general, promoters should consult a lawyer for advice under the Gambling Act or specialist legal advice when running prize draws in Northern Ireland or the Channel Islands. Promoters can access the Gambling Commission’s guidance on www.gamblingcommission.gov.uk.
This advice is designed to be read in conjunction with the Sales Promotion section of the CAP Code and the other entries in this advice section. Also, promoters might want to seek legal advice.
Last modified : 10 January 2012