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Consumer Protection from Unfair Trading Regulations 2008 The Consumer Protection from Unfair Trading Regulations 2008 (“the Regulations”) came into force on 26th May 2008. They were implemented by the UK in response to a European Directive of almost identical content and effect. What are the Regulations? Before the Regulations were introduced, the UK was one of only a handful of EU member states without a general duty to trade fairly. The Regulations have introduced this duty by prohibiting unfair commercial practices. “Commercial practices” are widely defined and include acts, omissions and representations (including marketing and advertising) which take place before, during or after a transaction. The Regulations introduce a general prohibition on “unfair commercial practices” in addition to four broad prohibitions on: • misleading actions; • misleading omissions; • aggressive practices; and • specified practices. Examples A misleading action is one in which a trader supplies the consumer with false information to affect their transactional decision. For example, this might include: • marketing a product in a way which causes confusion with that of a competitor; or • “clocking” a car to reduce the amount of mileage shown; A misleading omission is one which disguises, hides or delays material information in order to affect a consumer’s transactional decision. For example, this might include: • Selling tickets to an event that has a restricted view, without informing the consumer; • Selectively quoting restaurant reviews. An aggressive practice is one that significantly impairs the consumer’s freedom of choice in order to affect their transactional decision. For example, this might include: • A doorstep trader refusing to leave when asked to do so by a consumer; • Pressurising bereaved families into buying expensive coffins when they are at their most vulnerable. There are 31 specifically prohibited commercial practices listed in the Regulations. These include: • Giving a false impression that a consumer has won a prize when this is untrue; • Falsely claiming that a product is available for a limited time only in order to obtain an immediate decision from the consumer. What happens if I don’t comply? Breach of the prohibitions has the potential to be a criminal offence with a maximum sentence of an unlimited fine and up to two years’ imprisonment. Enforcement of the Regulations is exercised by the OFT and other authorised bodies such as Trading Standards. They have wide powers to investigate and act on unfair trading practices in addition to the criminal sanctions. What should I do? The Regulations are fairly complex and introduce many new concepts to the law on consumer protection. They affect business-to-consumer practices in all business sectors. Businesses that deal honestly and fairly with their customers should remain relatively unaffected. However, you should ensure that you and all of your staff understand the Regulations and their effect otherwise your business risks falling foul of the law. For example, do you or your business: Use bait advertising? • Offering goods or products on conditions or at a price which you know you will not be able to reasonably fulfil is a prohibited practice under the Regulations; Offer products “FOR A LIMITED TIME ONLY!”? • If you are doing so in order to elicit immediate decisions by customers, or depriving them of an opportunity to make an informed choice, then this is likely to be unlawful; Offer a prize or competition? • If you do not actual award the prize or a reasonable equivalent, you will be in breach of the Regulations; • If you falsely represent to a customer that they have already won, you will be in breach of the Regulations; Offer “Buy One Get One Free” products? • If you describe a product as free when the customer has to pay anything other than the cost of delivery or responding to the advert, you could be committing an offence; Appeal directly to children? • Any direct appeal to children to buy (or ask their parents to buy) your product is likely to be a breach of the Regulations; In addition to the Regulations, there is also a minefield of other consumer legislation with which businesses need to comply when contracting with consumers. For example, are you aware of, and are you complying with, the requirements of: • The Consumer Credit Act 1974; • The Consumer (Distance Selling) Regulations 2000; • The Data Protection Act 1998; • The Electronic Commerce (EC Directive) Regulations 2002; • The Misrepresentation Act 1967; • The Sale of Goods Act 1979; • The Supply of Goods and Services Act 1982; • The Unfair Contract Terms Act 1977; and • The Unfair Contract Terms in Consumer Contracts Regulations 1999? TWM Solicitors can offer you advice and guidance on the Regulations and all of these other factors concerning both the present and future actions of your business. Often we are able to add value by updating terms of business so that they properly protect the supplier and at the same time are clearer and fairer for customers. Please do not hesitate to contact us if you wish to discuss any aspect of the Regulations or related issues. Link OFT Guidance: http://www.oft.gov.uk/shared_oft/business_leaflets/cpregs/oft1008.pdf |