10 November 2020
NaturaMed Pharma has been marketing dietary supplements under the pretext that these are free gifts and and product samples, even though this offer is actually a paid subscription. These types of subscription traps are common in the marketing of natural products. The Consumer Ombudsman demands that NaturaMed Pharma pay the fine levied against it and also seeks a ban issued by the Market Court against the company.
In the years 2019 and 2020, NaturaMed Pharma distributed unaddressed letter inserts in periodical publications, inviting the reader to accept a watch and dietary supplement package at no charge. The fact that neither the gift nor the products may be ordered without agreeing to a subscription is not stated until the end of a multi-page advertising letter, on a response card. Information on the subscription is printed in a font size that is considerably smaller than that used for the other text in the letter. This type of misleading approach is known as a subscription trap.
The Consumer Ombudsman issued a ban to NaturaMed Pharma in 2010 for misleading marketing. Because the company continues to employ misleading marketing practices, the Consumer Ombudsman has now requested that Market Court issue the company with a ban along with a conditional fine of EUR 100,000.
NaturaMed Pharma is not the only natural products company that employs this type of marketing — indeed, misleading marketing practices seem to be an ongoing problem in the natural products industry.
“A sample or introductory package that is claimed to be free of charge often leads to a subscription. The behavioural biases of consumers are taken advantage of in doing this. The consumer’s attention is snared on a benefit that is misleadingly emphasised in marketing, and the purchasing decision is made based on this,” explains Consumer Ombudsman Katri Väänänen.
The Consumer Ombudsman emphasises that the contents and total price of the order as well as information on the right to cancel must be stated in all distance selling.
Repeated violations indicate disregard
Because NaturaMed Pharma has repeatedly violated the ban issued to it in its letter marketing, the Consumer Ombudsman has also requested that the Market Court issue the company a new ban. It has been proposed that the ban currently being sought be further enhanced with a EUR 150,000 conditional fine.
“Repeated misleading marketing practices demonstrate a clear disregard for the principles of consumer protection and the ban issued to the company,” says Väänänen.
By law, no expressions suggesting gratuitousness, such as ‘free’ or ‘0 euros’, may be used in marketing in cases involving a paid subscription. The Consumer Ombudsman also requests that the Market Court ban NaturaMed Pharma from using these types of expressions in connection with subscriptions.
Industry problems also extend to telephone marketing
Although the ban currently being sought concerns the letter marketing being conducted by NaturaMed Pharma, misleading letter marketing is not the only problem in the industry. Natural products and dietary supplements are sold using misleading practices by telephone and, according to contacts received by the Finnish Competition and Consumer Authority, the elderly have been particularly targeted.
“Telephone sales causes so many problems for consumers that its regulation should be tightened once and for all,” stresses Väänänen.
Further information on the subject: