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Banks’ refusal to reimburse victims of fraud

In May 2019, many of the UK’s largest banks and building societies signed up to a voluntary code requiring them to reimburse customers who are victims of fraud except where the customers have been grossly negligent.However, according to the Payment Systems Regulator (PSR), it now appears that many of the banks are taking a very restrictive approach to their obligation to reimburse defrauded customers. From the PSR’s data, it appears that the most generous bank has provided full refunds to 6% of its defrauded customers and partial refunds to 93% of them (rejecting 1% of claims). Whereas the least generous bank has only fully refunded 1% of its customers and given a partial refund to 3% of them, meaning that it has rejected 96% of the claims.This is disappointing news at a time when authorised push payment fraud is on the rise. It also flies in the face of the obligation which the banks themselves signed up to last year. As a result, the PSR is calling for reform of the code. This call for reform also comes on the heels of comments made by the Treasury Committee in November 2019 expressing their view that the code should be made compulsory for all banks and should have retrospective effect back to 2016 meaning that customers could claim a refund for frauds which were carried out up to four years ago.

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Don’t get burned by the ASA’s safety advertising guidelines this Halloween and Bonfire Night

The ASA have again this year issued warnings to companies creating Halloween or Bonfire Night themed adverts. The ASA have reiterated that unless it is an ad promoting a safety message, fireworks must not be shown as being used irresponsibly in advertising. Not showing responsible use can include showing fireworks being used alongside alcohol consumption, or without adult supervision where children are involved.When it comes to Halloween advertising, the ASA have said that care should be taken not to cause undue fear or distress to the audience and to target the ads appropriately.Last year, the ASA ruled that Spotify’s Halloween themed ad, which featured a doll brought to life by Camilia Cabello’s popular song ‘Havana’, breached the Committee of Advertising Practice Code rules on social responsibility and harm and offense. The ASA ruled that “although violence was not explicitly shown in the ad, it was implied,”, as the doll stalked teenagers around a house, and that this made the ad “not suitable to be seen by children because it was likely to be distressing to them.” It is worth bearing this in mind when designing Halloween themed adverts. Further, advertisers should  be careful not to promote negative stereotypes which are likely to cause offence, this may include negative portrayals of mental health or race. Though the ASA have taken a broad approach to their rulings in this regard, and a ‘Psycho Clown’ costume was considered to not be a reference to a person suffering with a chronic mental disorder, and instead to a villainous horror movie character.This is in addition to the ASA’s decision to ban harmful gender stereotypes in advertising, which may also come into play for the first time this Halloween. If the costume in your ad involves a gender stereotype that is likely to cause harm, or serious or widespread offence, that it may fall foul of the ASA rules.In their approach to assessing these publications, the ASA has looked at the targeting, audience and effect.The ASA does not have specific rules for seasonal advertising, but it is worth bearing in mind how their general rules affect these types of adverts. Furthermore, new rules coming into play recently, involving harmful gender stereotypes and negative stereotypes involving mental health and race, may put limits on what has been allowed in previous years. Seasonal advertising might be scarier than you imagined if you do not consider the contents and the guidelines appropriately.

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Email (House) Chain

In a recent case (Neocleous v Rees [2019] EWHC 2462 (Ch)), the Court held that a binding contract for the disposition of land could be formed by a string of emails signed with a solicitor’s email signature.A contract for the sale of land must include: offer, acceptance, consideration and intention to create legal relations (section 2 of the Law of Property (Miscellaneous Provisions) 1989 Act). It must also be in writing, incorporate all the terms that the parties have expressly agreed and must be signed by or on behalf of each party.In the case of the present email chain, the lawyers identified the land and included an agreed price. The key decision for the court was whether the emails were signed for the purpose of a sale of land contract. The Court held that that the emails were signed by the automatically generated email signature included at the bottom of emails. For these purposes, the Court held that the necessary requirements were met for the sale of land and to create a contract which was binding between their clients.The Defendant argued that the signature requirement had not been met. It was argued that because the email signature was automatically generated, it was not sufficient to bind a party to a contract. The Court rejected this argument.In support of its decision, the Court referred to a Law Commission consultation document on Electronic execution of documents, where it was stated (in a provisional view supported by case law) that an electronic signature is capable of meeting a statutory requirement for a signature if an ‘authenticating intention’ can be demonstrated.The Court noted that the ‘ordinary meaning’ of the word signature has changed and that the Court should be guided by recent case law and the Law Commission report.In this case, the Court considered that the email footer was sufficient to act as signing for the following reasons:The footer was present because of a conscious decision to insert the contents;the sender was aware that their name was being applied as a footer (and the sender could presume this);the use of ‘Many thanks’ before the footer, showed an intention to connect the name with the contents of the email; andthe name and contact details in the signature was in the conventional style of a document signature .The offer which was the subject of the email chain came as a settlement for a dispute involving a right of way. It is important to note that the Defendant client had given the solicitor instructions to accept the offer. The Defendant later attempted to renege on this settlement due to a technical difficulty in vacating a subsequent court hearing.  ConclusionThere is arguably little danger in allowing contracts to be formed in this manner, as in the present case it can be shown that there was intention to create such a contract, it was in writing and it was concluded by a sign off from a solicitor.In this instance, as considered by the Court in the case, this interpretation is in line with the policy decision behind the 1989 Act, to avoid uncertainty.Though we should note the Court’s evolving view of signatures and be wary of what may constitute a signed and binding agreement.

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How to make friends and influence people … and not get fined!

The Advertising Standards Agency (ASA), in collaboration with the Competition and Markets Authority (CMA) have recently published a new guide to outline the advertising rules which apply to social media ‘influencers’. This came following their investigation into social media advertising in August 2018, after concerns that celebrities and social media ‘influencers’ do not properly declare when they have been paid or rewarded to promote services or products. Shahriar Coupal, Director of the Committee of Advertising Practice (CAP) said: “Responsible influencer marketing involves being upfront and clear with the audience, so people are not confused or misled and know when they’re being advertised to. The relationship between influencers and their followers relies on trust and authenticity, so transparency is in the interests of all parties. This guide on the standards will help influencers and brands stick to the rules by being upfront with their followers.”Social media is quickly becoming the most important platform for advertising. A recent survey showed that 70% of millennial consumers are influenced by the recommendations of their peers in buying decisions.Instagram is one of the most popular social media platforms for advertising, with 87% of marketers citing Instagram as the most important platform for their influencer marketing programs and this summer it reached a billion active monthly users. It can be a lucrative platform for those with a high volume of followers: celebrities such as Beyonce and Selena Gomez have been recorded as receiving $1 million and $550,000 per post respectively. Others have made a name for themselves through social media influencing alone, with the likes of Jen Selter and Zoella making $15,000 and $14,000 per post.Instagram is also one of the places where influencers have been seen to fall foul of advertising regulations. Over the last few years posts from Louise Thompson, Millie Macintosh, and Marnie Simpson have been subject to ASA action.  There are lots of rules that could apply, but the ASA pays particular attention to the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (the CAP Code) and the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). What counts as an ad? Affiliate marketing – if the content you post promotes a product or service, especially if it contains a hyperlink to the product or service or a discount code with commission, that counts as advertising.Advertorial – if you work with a brand to create content and are paid in some way for doing so, this is an ad. There needs to be both payment and control for this to apply. Control is considered to be asserted if the influencer does not have complete freedom to do and or say whatever they want. This includes the brand having final editorial say over the content.  What counts as being paid? Being ‘paid’ for this purpose can include receiving goods for free, it is not only a monetary reward. Similarly, any sort of profitable relationship with a brand, such as a being a paid ambassador, receiving gifts, products, trips etc. for free or in return for your services, constitutes a payment. What counts as prohibited content under the CPRs?  using ‘editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable by the consumer (advertorial);falsely claiming or giving the impression that an individual is acting outside of their business purposes or falsely representing themselves as a consumer;failing to identify a commercial intent behind a social media post;and omitting or hiding ‘material’ information.What does not count as an ad under the CAP code?Posting content for a brand for no gain ie they control the content but you receive nothing in return;Receiving freebies and posting about them but the brand having no control over the content;Discount codes with no commission; orRecommending products or services which you have bought yourself and with no influence from the brand.Key things for influencers to remember:Ads should be recognisable as ads (section 2 CAP code) the code requires it to be ‘obvious’ and the ASA recommends using labels such as ‘ad’ ‘advertisement’ ‘advert’ etc. and notes that just ‘@’ mentioning the brand will not be sufficient;Advertisers must avoid misleading people (section 3 CAP code);Promotion marketing (eg competitions, and giveaways etc) are subject to additional regulations (section 8 CAP code); andPromoting some products may be subject to other rules e.g. food or supplements or age restrictions (for products like gambling or alcohol).The ASA and the CMA are by no means discouraging advertising by influencers or on social media. It is simply important to ensure that any advertising complies with the regulations already in force in the UK. The key is transparency. Consumers should be able to recognise that what they are viewing is advertising and it is the duty of both the poster and the brand to make sure this is clear.

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Robin Henry quoted in Independent on publication of RBS GRG report

Robin Henry, a partner at law firm Collyer Bristow, said the most striking conclusion in the report was that inappropriate behaviour was systematic.”Such behaviour, contrary to the law, regulations or RBS’ own policies, was not the result of rogue employees but something that GRG management was or should have been aware of,” Mr Henry said.”There was an intentional and coordinated strategy to focus on GRG’s commercial objectives rather than on the interests of its customers.”He also criticised the FCA for not carrying out the second phase of its investigation.He said: “A[nother] major failing revealed by the report’s publication is that the FCA has not followed up on its conclusions since it was completed in September 2016. “The report was supposed to be Phase 1 of the investigation into GRG, and Phase 2 was for the FCA to consider the root cause of the problems and whether RBS management knew or sanctioned GRG’s misconduct.”Nearly 18 months later, the FCA has provided no answers to these questions, and this is something it must now address as a matter of urgency.”

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Wealth Manager held in breach of contract

Full Circle Asset Management has been held to have been in breach of its contractual terms with an investor by allowing the risk profile to exceed what had been agreed and by failing to operate the agreed stop-loss policy.

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Currency trader challenges FCA ban over LIBOR conduct

UBS forex trader blames senior managers at the bank for mandating LIBOR misconduct

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Targeted Job Advertising – Age Discrimination?

Facebook and other online job advertisers are facing criticism because they are allowing recruiters to place job adverts that are only visible to users within a certain age bracket.   Commentators have suggested that this could be in breach of US anti-discrimination legislation.  Of course, the UK also has its own legislation against age discrimination.  Age was the last characteristic to become protected (some 40 years after sex and race) and is still the one that employers tend to forget about.  Placing a job advert in a publication or on a website that appeals to a certain demographic is one thing (although it could still perhaps be used as evidence of age discrimination, alongside other factors).  But to actively tick a box to make a job advert not visible to those outside of a certain age range shows clear intent to discriminate on the part of the prospective employer. As employment solicitors, we would advise against this sort of targeted advertising where the targeting relates to any protected characteristic.  Most recruiters would never dream of advertising a job in such a way as to suggest a candidate of a certain race, religion, sex, or sexual orientation would be preferred.  But age is one area where employers are still inclined to profile applicants.  Job adverts also need to be worded carefully: references to maximum number of years’ experience can unfairly prejudice older applicants; even specifying a minimum number of years’ experience can be risky – it should only be a requirement if it really necessary for the role;describing the type of applicant you want can be risky – “would suit recent graduate” implies a younger candidate will be preferred;even words like “mature”, “active”, or “energetic” can suggest a certain age profile.  

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Worker entitled to backdated holiday pay

Two of the hottest topics in employment law recently have been worker status and holiday pay. There have been cases on whether Uber drivers, and others working in the “gig economy”, should be treated as workers rather than self-employed contractors, and therefore be entitled to benefits including holiday pay.  And there has also been a series of cases about how holiday pay should be calculated, and that it should include elements such as commission as well as basic salary.  These two topics have come together in an important decision from the European Court of Justice.  Mr King worked for The Sash Window Workshop and was engaged (by his own choice) as a self-employed contractor.  As such he did not get paid holiday.  However, after he left the company, he brought a claim in respect of holiday pay that he says he should have received.  The UK Employment Tribunal held that Mr King was in fact a worker rather than self-employed.  Therefore he should have been entitled to paid holiday.  Normally, employees have to take holiday in the relevant holiday year, or lose it, so a claim would be limited.  But in this case, the ECJ held that Mr King should be entitled to claim backdated holiday pay not just for the previous holiday year, but stretching right back to when he started working for the company.  This meant that the liability added up to a very considerable sum. The case will now be sent back to the UK Court of Appeal, but it is likely that it will follow this decision from the ECJ.  Companies that use a lot of self-employed contractors need to be aware that this status is being subject to scrutiny more and more often.  The potential bill for making the wrong decision on worker status is set to become a lot more expensive.  

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Tribunal to consider employment status of former GB Olympian Jess Varnish

At a Preliminary Hearing in April 2018 the Employment Tribunal will determine whether Jess Varnish, former GB Olympian, is an employee of UK Sport & British Cycling, and therefore entitled to bring claims of sex discrimination, detriment for whistleblowing, victimisation and unfair dismissal.This is a further example of where employee status is being challenged in the tribunal, with potentially huge ramifications.

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