Consumer Authority fines Garant-o-Matic for misleading mailings

The Consumer Authority has imposed a fine totalling EUR 120,000 upon the mail-order company Garant-o-Matic for sending out misleading mailings. In 2008, the company had provided the Consumer Authority with an undertaking that from then onwards it would comply with the regulations when providing information to consumers. It was partly as a result of reports to ConsuWijzer that the Consumer Authority investigated whether Garant-o-Matic had actually kept its promise. The Consumer Authority has now concluded that the information that Garant-o-Matic provided to consumers in the mailings under investigation with regard to the offer and the costs involved was insufficiently clear. The mailings also misleadingly gave the impression that the consumer had won a prize and it is for that reason that the enforcement authority has imposed this fine.

Garant-o-Matic is a mail-order company selling health, beauty and gift products that are sold to customers through catalogues. In order to draw the attention of potential clients to the catalogue, Garant-o-Matic organises promotions that take the form of prize draws. Potential clients receive a mailing in the post telling them that they can enter a draw to win a prize. The mailings were primarily aimed at older consumers.

What was wrong with the mailings of Garant-o-Matic?

In the mailings that were examined by the Consumer Authority, consumers were informed that they had been specially selected and that Garant-o-Matic had a package for them containing a valuable electrical product that they would receive if they paid the 'symbolic' sum of EUR 19.99. The mailings suggested that the consumers who paid this amount would receive one of the stated electrical products for free (an LCD TV, MP3 player, mobile phone or a digital camera). In reality, consumers who replied received a cheap portable CD player and the stated electrical products were given away to the quickest respondents by means of a prize draw.

The Consumer Authority found that the mailings were misleading in the following respects:

• The mailings misleadingly gave the impression that the addressee had already won a prize;
• There was a lack of clarity as to exactly which product was involved;
• Consumers were given the impression that the product was free;
• The period within which the consumer had to respond in order to compete for the prizes was not clearly stated.

The Consumer Authority imposed a fine for the identified contraventions. The company may still file an objection against this decision.