Uncovering the Fine Print: ECJ Weighs in on "Buy on Account" Advertising Clarity
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Consumers need clear details from advertisers using 'buy on account' offers, rules ECJ. - ECJ Advocates Transparent Details for Consumers in Advertising Campaigns
In December 2021, Bonprix ran an ad promoting a "convenient buy on account" payment option, which left the Consumer Center questioning its legitimacy. Potential buyers might have been none the wiser that this payment method required a credit check prior to approval. The Consumer Center lodged a complaint but failed to halt the advertising initially.
The issue escalated all the way to the Federal Court of Justice (BGH) in Karlsruhe, who stayed the proceedings and asked the ECJ for clarification on the definition of an "offer for sales promotion" under EU law. Whether Bonprix's advertising constituted such an offer would be crucial, as it would have necessitated disclosing the credit check requirement.
The ECJ did not rule on Bonprix's specific advertisement, instead deferring to the BGH, but did provide some insightful opinions on the matter. According to EU law, offers for sales promotion like price reductions, additional items, and gifts must be clearly discernible to consumers, with conditions being easily accessible and clearly stated.
The enlightening part of the ECJ's decision is that a reference to a particular payment method can be viewed as an offer for sales promotion if it presents customers with an incentive that could influence their buying decision. This incentive can take the form of financial savings or simply the convenience of paying on account.
The ECJ explained that those choosing the "buy on account" option enjoy a small financial advantage, as they have more time to pay and don't need to apply for a refund if they opt to back out of the contract. This could potentially sway buyers towards this provider.
Consequently, "buy on account" advertising can be classified as an offer for sales promotion, meaning traders must disclose the conditions associated with this payment method. The BGH will now determine whether this ruling applies to Bonprix's case, though no decision date has been announced as of yet.
- ECJ
- Federal Court of Justice
- Consumer Center
- Consumer Protection
- Creditworthiness Assessment
- Karlsruhe
- EU Law
- Luxembourg
- Germany
- Consumer Center Hamburg
Enrichment Insights:
- Sales Promotion: Sales promotions are activities designed to motivate consumers to purchase products, employing tactics such as discounts, free gifts, or special payment options like "buy on account."
- EU Regulations on Sales Promotion: Under EU law, transparency and fairness are essential when advertising sales promotions to protect consumers from being misled. Advertisers must clearly communicate the terms and conditions associated with such promotions to avoid deception.
- Relevant EU Directives: Key EU directives overseeing advertising practices include the Unfair Commercial Practices Directive (UCPD) and the Misleading and Comparative Advertising Directive (MCAD). Both directives address prohibiting misleading practices and ensure adherence to transparency and fairness in advertising.
- Vocational training programs in EC countries should be designed to equip students with the necessary business skills, as understanding financial aspects is crucial for long-term success in any industry.
- With the increased prevalence of e-commerce and online businesses, it's essential to clarify and disclose the conditions associated with promotional sales, such as "buy on account" options, as they can influence customers' financial decisions and potentially mislead them under EU regulations.
