No 41/98 1 October 1998

OFT halts misleading homeworking scheme ads

The Office of Fair Trading has scored a victory in the battle against misleading homeworking advertisements which promised ‘Unlimited Earnings’.

Simon Stepsys, trading as Win-Star Direct (formerly PressWise Marketing) of Nantwich, Cheshire, has agreed to give undertakings to John Bridgeman, Director General of Fair Trading, that he will stop the publication and dissemination of

misleading advertisements for working from home schemes and also information on winning the pools and betting on horse racing.

The adverts appeared in national and regional newspapers and classified-ads magazines. Consumers were encouraged to send for further details, they received information about several schemes which made claims for the ‘best paid homework plans ever’ but omitted essential information about what the work involved, the availability of the work, and gave a misleading impression of the earnings potential.

The schemes required consumers to register by paying a registration fee of £20 -£25 to work from home and promising high earnings which failed to materialise. They led consumers to expect considerable wealth without ever really spelling out how they

could achieve this. Rewards offered included: ‘Earn Thousands of Pounds Weekly With No Investment Whatsoever!’ - ‘Earn Up To £400 A Night’ and even ‘Unlimited Earnings’.

Most complaints concerned two particular schemes: ‘Homework & Moneymakers’, which claimed you could make £19,500 plus in 3 months if you had the use of an IBM compatible PC, and ‘Earn £100 per hundred’, which claimed that by ‘sending us

addressed envelopes you can earn all the extra money you need daily by working from home in your spare time.’ These claims could not be substantiated.

John Bridgeman said, ‘Consumers should be wary of paying in advance for "easy money" home working schemes. Under a genuine scheme you should expect to earn money rather than pay it out. These schemes preyed on the vulnerable. If you

suspect a scheme or feel you have been conned, please report it to your local trading standards officer as soon as you can. You may help to expose the scam and save others from being caught out. Should Mr Stepsys break these undertakings he can

expect to be taken to court.’

OFT involvement followed action by Cheshire Trading Standards Department and the Advertising Standards Authority (ASA) which upheld a complaint. But Mr Stepsys continued to advertise in the same way and the ASA passed it to the OFT.

Despite being given several opportunities to do so, Mr Stepsys failed to provide satisfactory evidence to back up the various claims made in his advertisements.

Following an approach under the Control of Misleading Advertisements Regulations 1988,voluntary undertakings have been secured from Mr Stepsys in relation to misleading advertisements which have been placed for ‘business opportunities’, ‘business plans’ and ‘agency plans’ relating to working from home, and also information on winning the pools and betting on horse racing.

NOTES

1 The text of Mr Stepsys and Win-Star Direct (formerly PressWise Marketing) of 103 Princes Court, Beam Heath Way, Nantwich, Cheshire CW.. 6RQ, undertakings are as follows:

CONTROL OF MISLEADING ADVERTISEMENTS REGULATIONS 1988 UNDERTAKINGS TO THE DIRECTOR GENERAL

I, Simon Stepsys, trading as Win-Star Direct (formerly PressWise Marketing), hereby undertake to the Director General of Fair Trading that I (whether by myself or by my servants or agents or any of them or otherwise howsoever) will refrain from doing any of the following acts, that is to say publish or disseminate, or cause to permit to be published or disseminated, or otherwise be concerned with the publication or dissemination in any manner whatsoever, of any of the following types of misleading advertisement within the meaning of Regulation 2(1) of the Control of Misleading Advertisements Regulations 1988) namely:

1 any of the advertisements examples of which are in Schedule 1 annexed hereto and which were published in the various newspapers and periodicals identified in Schedule 2 annexed hereto;

2 any of the advertisements copies of which are in Schedule 3 annexed hereto and which were disseminated in the form of leaflets with application forms attached supplied to persons who responded to any of the advertisements referred to in (1)

above;

3 any other advertisement likely:

(a) to convey a false impression that a bona fide opportunity is offered to earn money by working at home;

(b) to convey a false impression that an opportunity is offered to do work that does not involve soliciting third parties;

(c) to convey a false impression as to the financial outlay required by those who take up an offer to which the advertisement relates, in particular:

(i) by failing to state that any financial outlay is required when such an outlay is in fact required;

(ii) by stating that the only charge to those who take up the offer is an initial fee when such persons are in fact required to pay for their own advertising, postage and/or other disbursements;

and/or

(iii) by failing to state that persons who take up the offer are required to pay for their own advertising, postage and/or other disbursements when such is in fact the case;

(d) to convey a false impression as to the earnings that can be achieved by those who take up an offer to which the advertisement relates, in particular:

(i) by stating or suggesting that specified sums can be earned per day/week/month/year when such sums would in fact be very difficult to achieve;

(ii) by stating or suggesting that the amount of money that can be earned is within the direct control of each person who takes up the offer when such is not in fact the case; and/or

(iii) by failing to disclose that the amount of money that can be earned is outside the direct control of each person who takes up the offer when such is in fact the case.

2 The Control of Misleading Advertisements Regulations 1988 gives the Director General of Fair Trading the power to apply to the Court for an injunction when he has received a complaint about an advertisement which he considers misleading. Such an injunction may apply to any person appearing to be concerned with the publication of the advertisement.

3 An advertisement is defined, for the purpose of the Regulations, as 'any form of representation which is made in connection with a trade, business, craft or profession in order to promote the supply or transfer of goods or services, immovable property, rights or obligations'. The Regulations apply if an advertisement 'deceives or is likely to deceive the persons to whom it is addressed or whom it reaches and if, by reason

of its deceptive nature, it is likely to affect their economic behaviour, or for those reasons, injures or is likely to injure a competitor of the person whose interests the advertisement seeks to promote’.

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