CCP survey uncovers deceptive marketing

Directs shoe, clothing brands to make full disclosure of product discounts

The Competition Commission of Pakistan (CCP) has advised shoe and clothing brands offering discounts to ensure complete and visible disclosures regarding actual and discounted prices.

“Brands violating this directive may face enforcement actions by the CCP,” it said in a statement on Saturday. During the ongoing seasonal surge in discounts, particularly within clothing and shoe brands, the CCP said that it uncovered instances of deceptive marketing practices. Preliminary investigations indicated that such practices may violate Section 10 of the Competition Act 2010, constituting deceptive marketing.

The CCP said that its survey and preliminary probe identified 27 brands offering ‘flat discounts’ on their products. However, it noticed that the ‘flat discount’ didn’t apply to all items. The discount advertised outside the shop was higher than the actual sale prices inside. The disclaimer about terms and conditions had an illegible font size. In numerous cases, terms and conditions were not mentioned at all, the CCP said.

Additionally, certain offers, like ‘flat 50% plus 20% on bank cards,’ had differing terms for online and retail purchases, leading to confusion and potentially misleading consumers into uninformed purchases. “These discrepancies were observed in approximately 96% of the outlets surveyed.”

According to the CCP, this lack of disclosure containing essential information hampers consumers’ ability to make informed decisions. It advised consumers to exercise vigilance and thoroughly review the terms and conditions of discounts and sales offers to avoid falling victim to deceptive marketing practices.

The CCP said that it had already issued “Guidelines on Section 10: Deceptive Marketing Practices,” which also prohibited ‘Bait and Switch Advertising’. It is the act of advertising a product at a low price but charging a higher price at the point of purchase.These guidelines emphasise the responsibility of undertakings to ensure clear disclosure of terms and conditions across all media to avoid creating false impressions about the goods on offer. Fine print disclaimers that are difficult to read or hide important information are strongly discouraged.

Published in The Express Tribune, December 31^st, 2023.

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