When will a 'free' offer be misleading under Australian law - lessons to be learnt from Bet365's 'Free bets' offer

29 September 2015

Kathryn Edghill, Cicely Sylow

In September 2015, the Australian branch of Bet365 was found to have misled punters over its '$200 free bets for new customers' offer.  In this article we examine the 'free bets' offer and distil some lessons from the case for all promoters of 'free' offers.  We suggest a number of steps you can take to minimise the risk of your promotional campaigns misleading and deceiving consumers when using terms such as 'free' and 'bonus',  and how and where terms and conditions that qualify the meaning of such terms should be displayed on your website.

What misled and what didn't mislead in this case?

Bet365's headline 'free bets' offer was found to mislead as the dominant message of 'free bets' was not appropriately and proportionately qualified by the applicable terms and conditions.  The headline offer, although accompanied by an asterisk, did not lead the consumer to review the applicable T&Cs before completing the registration process and, therefore to know what qualification applied to the 'free' offer. 

Following complaints from the regulator, the Australian Competition and Consumer Commission (ACCC), Bet365 amended the offer to include the words "* see Terms and Conditions below" immediately below the "BET NOW" and displayed the T&Cs in full (albeit in small green type on a green background at the bottom of the webpage) on the same page the offer was made.  A couple of weeks later Bet365 amended the offer again and used the word 'bonus' instead of 'free' with similar T&Cs.  These amendments were found to have appropriately qualified the dominant 'free bets' message and the T&Cs were held to have been adequately displayed.

What guidance does this case offer for the promotion of free offers on websites?

While the individual context will always be important, this case provides some good lessons and examples of when qualifications to 'free' or 'bonus' offers will be appropriately displayed on websites.  We take you through some of the key issues and steps you can take to minimise the risk of the promotion misleading consumers, below. 

  1. 'Free' offers – offering something for free suggests that the consumer will get something without having to give anything in return or to expend any money before receiving the free offer.  If the 'free' nature of the product is qualified in any way (by, for example, requiring the consumer to acquire another product or sign up for a new or longer contract) you must ensure that these are clearly displayed and accessible to the consumer before he or she accepts the 'free' offer.  Qualifications must be proximate and prominent to the headline 'free' message.  For example, the T&Cs should be on the same page as the free offer with at least some of the terms being visible before a consumer is required to scroll down.
  2. 'Bonus' offers – 'bonus' is a more nuanced word than 'free' and can mean something given over and above what is due or what is normally expected.  It is more likely to invite the consumer to question what it is and what must be done to get it, and, as a result, the average consumer is more likely to understand that conditions will attach to the 'bonus' and seek these out, but it still requires care when used as a headline offer.  Any T&Cs that qualify a bonus offer should be on the same page as the offer.  The word 'bonus' should not be used where the qualifications render the bonus illusory.
  3. Using * to denote qualifications – an asterisk is commonly used to identify that T&Cs apply to an offer but it is risky to rely on it, especially where the T&Cs qualify or partially disclaim the headline message.  An asterisk will not be sufficient where it is an 'orphan' on the page.  There must be a clear path that leads the consumer to the T&Cs for the asterisk to have any prospect of sufficiently dispelling any misleading character of the dominant message.  The qualifications must be on the same page that the 'free' offer is made.
  4. Where to put T&Cs – T&Cs that qualify the free nature of the offer or when a bonus can be redeemed should be visible on the same webpage as the offer.  It is important that at least some, if not all, are visible before requiring the customer to scroll down the page.  Generally, it may also assist consumers by providing them a second option to click through to T&Cs on a separate page using a button titled "View Terms and Conditions".
  5. How T&Cs are displayed – the use of contrasting colours, size, typeface, font and luminescence is important.  Websites have different lighting properties and when viewed on a screen may accentuate the contrast compared to print forms.  Using dark or less luminescent colours may diminish the significance or make it unattractive to read and should be avoided.  The use of upper-case or larger fonts can suggest greater significance when compared to lower-case or smaller fonts.  All these factors will work together to determine whether the disclosure is sufficiently prominent and proximate to dispel any misleading message.
  6. Plain English T&Cs – although lack of consumer understanding does not automatically mean you have engaged in misleading conduct, the use of concise terms in plain English is more likely to be read and understood by a consumer than material that is more challenging. 
  7. Use of  'terms and conditions' rather than 'more details' – depending on the circumstances, using the words "terms and conditions" rather than "more details" may improve disclosure as it invites the consumer to review any particular qualifications compared to further details he or she could be less interested if they are already emotionally committed to taking up the offer.
  8. Webpage configuration – how the website displays information will be important.  Dividing the page in sections can emphasise or diminish the significance of information.  How related information is displayed on the website is also relevant.  The more proximate the qualifications (or notice of the qualifications) are to the next step required to take up the offer, the lower the risk that the promotion will be found to be misleading.
How you navigate the website is important

The Bet365 case also identifies certain design features of websites that should be avoided, on the basis that the context is important in determining whether a consumer has been misled.  The website should not:

  1. Require the customer to investigate a series of optional click-throughs to find the terms and conditions as by this stage the consumer is likely to have been drawn into the marketing web by the headline offer.
  2. Discourage the consumer from viewing the terms and conditions by displaying them in an obscure way or place on the website.
  3. Make the offer readily available to ineligible consumers without disclosing key eligibility requirements.  For example, if a resident of particular jurisdiction (eg country, state or territory) is not eligible for the offer, consider geo-blocking access to the website promotion from that particular jurisdiction.  Alternatively you may consider preventing customers with ineligible addresses from being able to complete the registration process.  Restrictions, such as residency requirements, should be disclosed at a minimum within the T&Cs, if not near to the promotion itself.
Everyone else does it, so I can too, right?
Bet365 filed evidence of similar advertising on its competitors' websites but the judge did not consider this to assist Bet365.  What your competitors do has little to no bearing on whether or not your offer is ultimately misleading.  Your competitors' promotions could also be misleading and there are nearly always slight variances in how dominant messages are characterised and the prominence of qualifications.  Representations and conduct will always be assessed in their individual context.  Going along with industry norms won't necessarily help or safeguard you from breaching the law.

Authors

Kathryn Edghill

Partner
Australia

Call me on: +61 2 9226 9888
Cicely Sylow

Cicely Sylow

Associate
Australia

Call me on: +61 2 9226 9888