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EU Court of Justice bans 'pay to claim your prize' promotions

Marketers will no longer be allowed to tell consumers that have “won” a prize only to ask them to incur a cost for collection.

Image: bloomsberries via Creative Commons/Flickr

THE HIGHEST COURT of the European Union has ruled that marketers can no longer contact consumers to say they have “won” a prize only to ask them to pay a fee to collect their winnings.

Consumers are often told they have “won” prizes through promotions involving scratch cards in newspapers and magazines, or even individually addressed postal letters. Such promotions inform the recipient they are a winner of a prize but often stipulate that they telephone a premium rate number, send a text, or pay delivery and insurance costs in order to claim it.

The EU Court of Justice (ECJ) ruling follows the UK’s Office of Fair Trading suing five companies for using mail-marketing tactics in violation of consumer protection laws. The OFT said consumers had been informed they had won a prize or equivalent benefit – the value of which could be “either considerable or merely symbolic” – only to be asked to incur costs for collection.

In one example offered by the court, a marketer told consumers they had won a Mediterranean cruise. In order to claim their “prize”, however, winners had to pay for trip insurance, a supplement to obtain a one-bed or two-bed cabin and, during the voyage, the cost of food and drink, plus the port fees. Thus, consumers would have had to pay £399 per person (€490 pp) in order to participate in the cruise.

In its judgement, the Court held that EU law prohibits aggressive practices which give the consumer the impression that they had already won a prize when they must then incur a cost to claim.

The ECJ ruled such practises are prohibited even if the cost imposed on the consumer is minimal (eg the price of a stamp) when “compared with the value of the prize or where it does not procure the trader any benefit”.

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It also ruled that such “aggressive practises” 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.

Read: Why do Nigerian scammers say they are from Nigeria?

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