The Decree on inappropriate practices in marketing and consumer relationships entered into force at the beginning of October 2008 in conjunction with amendments to the marketing provisions of the Consumer Protection Act. The Decree lists a number of practices which are always deemed inappropriate in consumer marketing. The Consumer Agency's existing case law is in line with the new Decree. This article gives an overview of the Decree in light of existing case law.
Paragraph 4 of the Decree. The Consumer Agency's guidelines on "Business and Marketing Error Situations" (2004) state the following: ” Consumers should be able to trust that prices, restrictions and other information in advertising are correct. Consumers have the right to expect that advertised products are available. The responsibility of the business for due diligence is highlighted in the marketing of special offers and discounts, as they involve using marketing to attract the consumer to the store specifically to buy the product on special offer.”
Paragraph 5 of the Decree . In particular, the practice of a business urging a consumer to buy a product at a given price and then failing to deliver it within a reasonable time with the intention of promoting the sales of another product. As stated in Government proposal 32/2008, this practice is prohibited by existing Market Court case law. In its decisions 1999:007 and 2002:006 the Market Court states the following:” By stating in its marketing communications a promise to find a similar or more expensive product to replace an out-of-stock campaign product as a notification that product availability is limited or that they are only available as a special benefit granted to consumers, the company acted inappropriately with respect to consumers”.
In addition, the Consumer Agency guidelines on E-commerce marketing and contract terms (2007) state that a binding contract is created when the consumer accepts an offer e.g. by ordering a product by submitting an online order form. The binding nature of online marketing is based on the fact that information on available products and their prices can be updated very quickly.
Paragraph 7 of the Decree. In existing case law, based on the general provision on marketing in the Consumer Protection Act, marketing which involves the marketing and sales of services in Finnish without disclosing that, once a contract has been entered into, customers will not be able to use the service in Finnish, is considered inappropriate. Such decisions have been made, for example, with respect to online marketing by airlines.
Paragraph 10 of the Decree. Market Court decision 1985:12 conveyed too positive an impression of the security given to consumers by a particular handheld fire extinguisher. The fire extinguisher did not meet the requirements for handheld fire extinguishers set by the Ministry of the Interior. The fire extinguisher was not suitable for use in the situations shown in the marketing of the product.
An example of depicting an exaggerated risk to consumers who don't buy a particular product was the case of marketing television sets as broadcasters were moving from analogue television broadcasts to digital technology. A television manufacturer marketed its products with the statement ” Your TV will go dark in 3 years' time unless it is TV X”. This type of marketing conveyed the misleading impression that analogue television sets would no longer be usable, even with the help of an additional device, i.e. a digital signal adapter, unless the consumer purchases TV X. An injunction was issued against the company to stop the marketing practices in question (Consumer Agency/2005/40/3380).
The Consumer Agency has also intervened in the marketing of a so-called elk warning device. The product is an elk whistle whose marketing claims were that it warns the animals of approaching vehicles and gives more reaction time in potential collisions. According to the information available to the Consumer Agency, the marketing claims were not backed up by appropriate research. The Agency urged the company to cease marketing the product by using the claims in question or to produce a new report to support the marketing claims (Consumer Agency/3523/41/2007).
Paragraph 12 of the Decree. According to Section 9 of the Money Collection Act, pyramid schemes are illegal methods of collecting money.
Paragraph 13 of the Decree. The Consumer Agency's guidelines on Price expressions as a marketing method (checked in 2005) state that stocks that are the subject of a clearance sale may not be replenished during the time of the sale, nor after the decision to hold a clearance sale has been made. If a business has several outlets and it closes down one of the locations, products may not be transferred to the clearance sale from other outlets in the chain that are to continue their operations.
Paragraph 14 of the Decree. Lucky charms and talismans were marketed under the Maria Duval and Marie France brand names in Finland and several other European countries. Further, the marketing of the company promised, amongst other things, to predict the winning lottery numbers in exchange for payment. The company did not have an office in Finland. The contact information provided was a post office box located in France. The Consumer Agency instructed consumers not to believe in promises that sound too good to be true.
Paragraph 15 of the Decree. Amongst others, Market Court decision 1997:008. The case involved the marketing by distance selling of weight loss products and hair loss prevention products without evidence of their effectiveness. The Consumer Agency warns consumers about "miracle products" and other dishonest propositions on its web pages on scams.
Paragraph 16 of the Decree. In Market Court decision 1999:017, a company was prohibited from using expressions portraying the prices of products as the lowest on the market without evidence of the same, and from augmenting such expressions with a promise to compensate the consumer for the balance if the consumer finds the same product at a cheaper price at another store and from using the expression "price guarantee" to describe the practice.
Paragraph 17 of the Decree. In Market Court decision 1995:25 a company was prohibited from making the claim that a person invited to learn more about their product had already won a prize in a raffle - unless the marketing materials provide sufficiently detailed information regarding the raffle and prize in question.
In Market Court decision 256/08 the company was prohibited from inviting consumers to pick up a raffle prize without clearly notifying them that the prize would be given as part of a sales presentation for shares.
Paragraph 18 of the Decree. The Consumer Agency has issued guidelines on the use of the word "free" in marketing. Consumers cannot be considered to receive a benefit for free if they have to buy something to receive it. The word "free" or "at no charge" can therefore not be used in marketing if consumers are charged something to receive the product or other benefit in question. Also see Market Court decision 1980:19.
Further, in existing case law the use of the word "free" in marketing is not allowed even when a consumer must pay postal charges or other shipping costs for a product that is otherwise provided free of charge. This is not a case of the consumer receiving the product in question for no charge at all. Also see the guidelines on inappropriate and misleading marketing of natural products, which state that it is misleading to market as "free" any product for which the consumer must pay postal charges.
Paragraph 19 of the Decree. In Market court decision 2000:17 a company was prohibited from using marketing practices whereby a magazine publisher sent two invoices to a consumer who had made a fixed term subscription for the magazine - where one invoice was for the subscription already agreed to by the consumer and the other for the subscription already agreed to by the consumer and a continuing subscription for the period thereafter.
Furthermore, Market Court decision 18/03 stated that a company had engaged in unfair marketing practices by sending consumers a letter offering car inspection services and enclosing a bank giro form with the letter. Once consumers paid the amount on the bank giro form, they accepted the offer of inspection services.
Paragraph 1 of the Decree. In Market Court decision 256/08 a company was prohibited from offering shares to consumers on the precondition that the sales agreement is signed at the sales presentation, unless the terms of contract granted the buyer the right to unilaterally cancel the agreement within ten days. The seller wanted buyers to make the purchase decision at the sales presentation.
Paragraph 2 of the Decree. The Consumer Agency guidelines on door-to-door selling highlight the significance of good practices.
Paragraph 3 of the Decree. For example, the Consumer Agency guidelines on inappropriate and misleading marketing of natural products highlights the importance of complying with consumers' refusals of direct marketing.
Paragraph 4 of the Decree. For example, the Consumer Agency guidelines on minors, marketing and purchases (2004) state that advertising may not directly urge children to purchase a product or urge them to talk their parents into purchasing a product. See e.g. Market Court decision 1987:13.
Also see Act on Television and Radio Operations, Section 25 on the protection of minors.