OfReg proposes ‘truth in advertising’ rules for licensees

The Utility Regulation and Competition Office, known as OfReg, has released a set of rules intended to make sure that the companies it regulates do not market themselves in a manner considered deceptive or unfair.

The rules address pricing statements, guarantees and after-sales services, endorsements and testimonials, imitation and denigration, and other elements of marketing. The rules apply to service providers of water, telecommunications, fuel and wastewater.

“All Marketing Communications should be truthful, and not deceptive or unfair,” OfReg’s rules state. “Any specific claims mentioned in Marketing Communications should be able to be substantiated with credible evidence.”

OfReg defines advertisements as deceptive if they contain a statement, or omit information, that is likely to mislead reasonable consumers and is important to a consumer’s decision to buy or use the service or product.

The regulator then defines advertisements as unfair if they cause or are likely to cause substantial loss to the consumer which a consumer could not reasonably avoid, and this loss is not outweighed by the benefit to the consumer.

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When advertising pricing, content should include fees and government surcharges and statements about the definite prices, and should not mislead by omission or distortion of information.

And when a company makes a claim that it’s better than its competitors, that claim should be supported by credible evidence, “unless such claims are obvious puffery,” OfReg stated.

“If a Marketing Communications is not truthful, or is deceptive or unfair, the Consumer may make a complaint to the Office as outlined in the Consumer Complaints Appeals Procedure Guidelines,” OfReg stated.

Then, if OfReg finds that a company has broken any of the proposed rules, the regulator’s remedies would include administrative fines, public reprimands, and criminal complaints of fraud.

OfReg stated in an explainer about the rules that the United Kingdom “was used as a source of inspiration to ensure that the proposed rules are up-to-date and give consumers the protection that they deserve.

“In order to construct the new rules, OfReg drew from a range of existing ones found in western countries.”

The proposal is a part of a consultation process OfReg is undertaking in drafting the truth in advertising rules. Regulated companies and members of the public have until March 13 to comment on the proposals, then OfReg will take those responses into account when drafting its final policy on the matter.

The proposed rules can be found at www.OfReg.ky.

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