1. Information on new legislation
A bill was introduced in late 2012 to amend provisions in, among other laws, the Danish Marketing Practices Act. The bill includes amendments to extend Consumer Ombudsman powers in relation to financial institutions as well as banning the marketing of alcohol to children and young people.
The amendments are expected to take effect in early summer 2013.
2. Success stories
In 2012, more than 20 penalties were metered out to non-compliant companies, the offences most often related to violations of sections 3 and 6 of the Marketing Practices Act on misleading advertising and unsolicited commercial communication, respectively. Companies were also fined or accepted sentences for violations of sections 13, 14 and 14a on price information and information requirements concerning purchase on credit and credit agreements.
Approximately 16 companies were reported to the police in the same period for similar violations.
Traders ‘luring’ consumers into subscription trials, online competitions and sample ‘traps’ in order to collect payment card information which is, it is indicated, needed to send the product or activate the sample subscription in question, but actually used to draw money for unlimited ‘tacit’ subscriptions, described in small print not noticed by the affected consumers, constitutes a major new trend in the complaints received by the Consumer Ombudsman.
The Consumer Ombudsman has reported two companies using this concept to the police – more cases are underway.
3. Case studies
The Consumer Ombudsman has taken part in a sweep carried out within the EU on digital products, in particular information and conditions related to media downloads and media streaming.
4. Important news and events
As of 1 January 2013, the amendment made to the ‘Do not deliver’ Registry in March 2012 to include traders in the scheme – which now allows both consumers and traders to request unaddressed mail not to be delivered and requiring unaddressed mail to be delivered in an appropriate manner – has resulted in nearly 4 per cent of all traders joining the scheme. Nearly 28 per cent of all private households have joined the scheme.
New guidelines on advertising and marketing making use of gender and gender-related aspects took effect 1 April 2012. The guidelines define how the principle of good marketing practice as well as ethical standards should be applied to marketing in this area. Not only an update of the 1993 guidelines to ensure that the guideline is on a par with current legislation and trends in society, the guidelines also describe more specific do’s and don’ts to avoid sex discrimination.
The Nordic Position on social media marketing took effect in May 2012. The Position, which explains how the Nordic marketing legislation should be construed in relation to social media marketing, deals with topics such as covert advertising, unsolicited commercial messages, marketing targeted to children and young people and banner ads.
An appendum to the guidelines on best practice in the telecommunications sector – the marketing of broadband speed connections – will take effect 1 March 2013, but was published in November 2012.
The appendum contains guidance as to how broadband speed connections should be marketed to comply with the law. Some of the most essential points are described below:
- An advertisement for a broadband product must be balanced, and any reservations, conditions and restrictions must be stated in the advertisement in a clear and understandable manner.
- Before entering into a mobile broadband agreement, the consumer must be presented with a coverage map showing the coverage in Denmark to be expected by the consumer
- Speed indications must reflect the actual obtainable speed that a consumer may expect during a normal period of use from 7 am until 1 am
- Capacity not actually obtained by consumers because it is used for data management or the like must not be included in the speed marketed
- If the term ‘up to’ a particular speed is used, most of the customers targeted by the marketing must be able to obtain the speed indicated or a speed that does not differ materially from such speed. Any restrictions stated in the marketing material, such as geographical restrictions, will be taken into consideration when determining who the marketing targets
In the aftermath of the financial crisis the Consumer Ombudsman was assigned new powers to look into specific cases in which financial institutions have marketed their products aggressively to consumers. In previous years the Consumer Ombudsman has received many complaints, and many of these cases are currently in various stages of examination, in some cases pending before the courts.
2012 has seen one case settled in the Supreme Court in which the Court upheld the claim put forward by the affected consumer, meaning that the financial institution had to pay damages for placing too large an amount of high risk investment bonds in the customer’s investment agreement.
5. Information and Intelligence Sharing
Not applicable. As for market trends etc., the Competition and Consumer Authority carries out market studies on a regular basis.
6. Does your agency enforce both consumer protection and competition laws, if not who does?
Competition laws – and some consumer protection laws - are enforced by Danish Competition and Consumer Authority.
7. Does your agency have both civil and criminal authorities, if not who brings the criminal cases?
Criminal cases are brought in cooperation with the police and the Prosecution Service according to instructions issued by the Director of Prosecution Services. The power to charge lies with the Prosecution Service, but the Marketing Practices Act lays down that the prosecution of a charge will be assigned to the Consumer Ombudsman if he so requests.
The Consumer Ombudsman has participated in the following activities under ICPEN auspices in 2012
- Annual Conference(s)
- Best Practices Workshop
- Stakeholder Management WG