Advertising: complying with the rules

As from May 2008, a set of new rules, aimed at protecting people from unscrupulous businesses, came into effect in the biggest overhaul of consumer law for 40 years.

The Consumer Protection Regulations outlaw 31 specific practices such as advertising a special offer but claiming it is not in stock and promoting 'closing down' sales when stores are not closing.

For the first time the new law imposes a wider duty on firms not to trade unfairly.

But what about the responsibilities that honest and law-abiding businesses have when they advertise their goods and services?

All ads must comply with certain rules on what may or may not be said or shown in them.

The four basic requirements of an ad, whether it appears in a local newspaper or on television, are that it must be legal, decent, truthful and honest.

The rules governing the content of advertisements are contained in two Committee of Advertising Practice (CAP) Codes, one that applies to broadcast advertising (television and radio) and one that applies to non-broadcast advertising (newspapers, magazines, outdoor posters, direct mail, sales promotions and the internet).

The Codes?

A good guide to producing advertising that does not break the CAP Codes is to make sure it does none of the following. The ad or commercial should not be irresponsible; should not offend the audience and should not cause fear or distress without good reason; should not show unsafe or anti-social behaviour and should not encourage the audience to break the law.

The Codes require that an advertiser must be able to substantiate and prove anything claimed in an advertisement.

Opinions must be clearly flagged as such and should not be paraded as facts. Particular industry areas, such as food and medicines, also have their own specific requirements.

Any advertiser engaged in direct marketing must act in accordance with the Consumer Protection (Distance Selling) Regulations 2000.

Legislation?

All forms of advertising must also meet other legal requirements.

The Sale of Goods Act 1979 requires that a description of any goods must match the goods themselves.

The Control of Misleading Advertisements Regulations enable action to be taken against any advertiser who misleads or who makes unfair comparisons with identified competitors.

The Trade Descriptions Act 1968 outlaws false or misleading descriptions of goods.

All ads must also conform to the law on libel, decency and copyright.

Online advertising?

As well as complying with the relevant CAP Code, online advertisers must follow additional rules. These include the Electronic Communications Act which makes it a legal requirement that all commercial email is identified as such. Other online regulations stipulate that you must have the opt-in consent of consumers to whom unsolicited marketing emails are sent.

The above is only a brief outline of the legal responsibilities that businesses have when advertising. For guidance about the regulations, a business should take professional advice. Both the Committee on Advertising Practice and the Advertising Standards Authority websites provide information on ads that breach the rules.

SJD Accountancy

SJD Accountancy are the UK's largest specialist provider of fixed fee, Limited company accountancy services to contractors; we've been acting for contractors across the UK since 1992 and have more than 14,000 clients.

We are the only national specialist firm of contractor accountants with offices nationwide. SJD Accountancy also have more qualified staff than any other firm in our market with qualifications from the following major tax and accountancy bodies - ATII, ATT, AAT, ACCA, CA, ACA, FCCA, ACMA.

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