Following last month's collapse of satellite teleshopping channel Auctionworld [WAMN 25-Nov-04], the UK's Broadcast Committee of Advertising Practice has issued new guidelines requiring such broadcasters to demonstrate that their advertised price reductions are genuine.
Channels that ignore the new rules could be reported to media and telecoms supra-regulator Ofcom which has the power to impose draconian fines on offenders and - in extreme cases - closure.
Auctionworld is now in administration with debts exceeding 14 million ($27.19m; €20.25m) and twenty-seven thousand customers among its creditors. The collapse came in the wake of a £450,000 fine imposed by Ofcom after it had received a tsunami of complaints about the channel.
BCAP [a unit of the Advertising Standards Authority to which Ofcom has delegated all ad regulation] said the new guidelines aim to prevent the use of false Recommended Retail Prices, exaggerated price cuts and deceptive comparisons with higher quality products.
Teleshopping channels must henceforth follow these guidelines:
If an item is available only from the shopping channel then a RPP can not be used.
All comparative or illustrative prices must be genuine
When making a comparison with a previous price it should be the last price that the product was available to consumers.
BCAP chairman Andrew Brown said the new rules should ensure a fair deal for consumers: "Clearer pricing guides will lead to fewer disappointed customers, which is good for both the industry and consumers."
Data sourced from BBC Online; additional content by WARC staff