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Businesses that support charities have long provided incentives for the socially conscious to purchase their goods or services. From Kind Snacks partnering with suicide prevention organisation (CALM) to Ronald McDonald House Charities — businesses that partner up with or donate to charities are able to fulfil a meaningful cause, bring awareness to causes they are passionate about, differentiate their brand, and get kudos for being a business that cares at the same time.
Businesses can support charities no matter what their legal structure.
There are lots of businesses supporting charities the right way. But what about those that make false charity claims? Businesses can make false charity claims on purpose or by mistake. Businesses need to be really careful to ensure they are not misleading the public with their claims.
In this article, we’ll take a quick look at what the consequences are for making false charity claims.
How Are False Charity Claims Illegal?
False charity claims are illegal. They are a breach of The Consumer Protection from Unfair Trading Regulations 2008—in particular, Part 2 of the provisions that state a person must not engage in conduct that is misleading or deceptive or is likely to mislead or deceive. Misleading and deceptive conduct encompasses a variety of behaviour, including non-intentional misleading and deceptive conduct.
False charity claims are also in breach of the Charities Act 2011. False charity claims can also amount to unconscionable conduct, which refers to behaviour that is so harsh, it goes against good conscience.
In addition to heavy financial penalties and reputational damage for businesses involved, false charity claims impact genuinely philanthropic organisations that are doing the right thing.
The Consequences Of False Charity Claims
Businesses have been known to abuse the willingness of the public to give to a good cause. Recycle Proline Ltd faced a complaint after selling bags with ‘Cancer Research and Genetics UK’ printed on them. The bags were found to mislead customers into thinking their purchase would support the charity, when none of the proceeds from the sales were going to charity. The Advertising Standards Authority (ASA) concluded the bags were not to be sold with the same print on it again.
All things considered, Recycle Proline Ltd managed to get off with a slap on the wrist. False charity claims can lead to consequences such as fines, court proceedings and irrepearable damage to your businesses reputation.
| Example Claudia sells pet treats online. On her website, Claudia states the profits from every purchase goes towards the local animal shelter. A customer finds out that Claudia was in fact not donating any of her businesses profits to the local animal shelter and files a complaint. After an investigation, Claudia is found to have engaged in misleading and deceptive conduct. The premise of her business was built on being a charitable cause- something that prompted customers to buy from her. As a consequence, Claudia is faced with hefty fines, must shut her business down and her identity as a reputable business woman is damaged. |
Misleading the public with false charity claims is not only unethical, it’s against the law.
What Should I Do If I Suspect A False Charity Claim?
If you think a business may be falsely claiming to be charitable and misleading the public, it’s important to file a complaint. A complaint can be filed with the ASA online.
The form should take a few minutes and will require details about the advertisement as well as any evidence you can provide, such as a photo. If you would like more information about filing a complaint, refer to this guide.
If there has been an incident of or ongoing false charity claims with your charity or one your business may be partnering with, then it’s your responsibility to report it to the Charity Commission.
Remember, misleading and deceptive conduct is considered illegal and therefore, you should waste no time in alerting the relevant authorities.
This article has talked about false charity claims exclusively. However, if you feel a charity is engaging in any other unlawful conduct, then it is still vital that it is reported immediately. Conduct that should be reported includes activities that risk or result in:
- Stakeholders of the charity being harmed
- Financial loss or damage to the charities assets
- Harm to the reputation and work of the charity
If you would like to find out more, click here.
The Takeaway
If you’re thinking of helping out a charity, no matter how big or small your business’ contribution is, that’s a meaningful thing to do. However, it’s important not to make false charity claims, as this is illegal whether you mean to or not. It can harm consumer confidence, your brand and the targeted charities themselves.
If you need more help on understanding your obligations under UK consumer laws, reach out to us on 08081347754 or at [email protected] for a free chat.
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