Enforcement notice issued on the advertising of free trials and other promotional subscription services
Committee of Advertising Practice notice concerns digital ads for subscription services
The UK’s Committee of Advertising Practice (CAP) published an enforcement notice on 30 March, reminding firms about their obligations in relation to the digital advertising of free trials and other promotional subscription models. The enforcement notice states that the CAP is aware that some advertisers offering subscription services are not currently adhering to the rules.
The CAP, which is responsible for the rules that are enforced by the Advertising Standards Authority (ASA), has issued the enforcement notice due to data captured in 2022 which indicates that some advertisers are not complying with its 2017 guidance on free trials or other promotional subscription models.
The subscription model has grown significantly in recent years and free trial offers are frequently used to entice and engage consumers. Issues arise however when customers unknowingly sign-up to an ongoing payment plan for a subscription service, a tactic described as a ‘subscription trap’. Advertising for subscription services can be considered misleading to consumers if significant conditions are omitted, or significant conditions are not sufficiently clear.
The enforcement notice applies specifically to digital advertising used by the subscription services market, which promotes a free trial or other promotional subscription offer that enrolls the customer in an ongoing payment arrangement in order for the customer to take advantage of the trial, which then continues as a paid subscription after the trial period, unless the subscription is cancelled.
The CAP notice provides guidance on best practices and valuable details from relevant ASA rulings, as well as the CAP code rules that apply to this type of digital advertising. The notice reminds advertisers to make clear whether a paid subscription starts automatically after the trial unless cancelled and the extent of the financial commitment if the subscription is not cancelled during the trial. Advertisers also need to make sure that significant conditions are immediately visible, clear, legible, prominent and distinct from other information, with pop-ups containing such information not considered to be sufficient.
The CAP notice requests that advertisers in the subscription services sector review marketing content on their digital platforms and make the necessary changes to comply with its guidance by 27 April 2023.