£150,000 Fine for Misleading Promotions
Kingstown Associates Ltd, a mail order business with an annual turnover in excess of £20 million and headquartered in Yorkshire, has been fined £150,000 for targeting elderly consumers with misleading advertisements. The company was convicted following trial at York & Selby Magistrates Court of two charges of engaging in unfair commercial practices contrary to the Consumer Protection from Unfair Trading Regulations 2008.
In 2018, the company sent out two promotional mailings that gave the misleading impression that the recipient had won a substantial cash prize (£10,000 or £20,000). However, in order to claim the prize (in reality, only 91p or £1.26 respectively), the recipient had to place an order for goods sold by the business. This amounted to a banned practice under paragraph 31 of Schedule 1 of the 2008 Regulations.
The company admitted that the promotions contravened the 2008 Regulations, but relied on a due diligence defence – specifically, that the company had relied on erroneous legal advice provided to it by independent solicitors.
In giving his judgment on verdict, District Judge Lower rejected the company’s case in its entirety, stating that the company’s evidence was “incredible, in that I simply do not believe it” and calling the company’s marketing director, Wayne Barry, “evasive” and “a person who told me half-truths”.
The company was sentenced on 21 January 2020 and received a fine of £150,000 plus prosecution costs.
Robin Kingham of Chambers prosecuted the case on behalf of the National Trading Standards e-Crime Team. Press coverage of the case may be viewed here.