EveryMonth (Nov 2011): Consumer Protection from Unfair Trading Regulations

Does your business deal direct with consumers?  Regulations introduced in 2008, with the objective of protecting consumers from unscrupulous traders, have serious implications for anyone who runs a B2C business. They are broad-ranging in their nature and simple for Trading Standards Departments to enforce.

While no reputable company will object to their customers enjoying the highest level of protection from ‘rogue traders’, if you are selling to consumers you need to be aware of this legislation when you fix or review your terms of business.

Let the seller beware:

The Consumer Protection from Unfair Trading Regulations

These regulations came into force in 2008, implementing the Unfair Commercial Practices Directive – an EU directive aimed at establishing a single regulatory framework to govern what are termed “unfair commercial practices”.

The Regulations set out a general prohibition on traders treating consumers unfairly.  They require that your business does not mislead consumers through acts or omissions or subject them to aggressive commercial practices.  The Regulations:- 

  • Outlaw trading behaviours that may have been lawful in the past.
  • Do not target a specific economic sector but have universal application in trading law (the writer is currently dealing with two matters involving the Regulations, one relating to pedigree dogs, and the other concerning home alarm systems -indicating their diversity of application.
  • Make life a lot easier for Trading Standards enforcement,so the risk of infringement is markedly increased.

Review procedures; don’t wait to get caught out

Trading Standards Departments across the country are invoking these Regulations regularly. If you trade with consumers you should look at the Regulations in detail, and consider whether your systems and processes are compliant. Staff at all levels within a business, need to be aware of them – from senior management right through to those staff with everyday consumer contact. A review is quite likely to result in the re-writing of procedures, additional staff training, and a change in sales tactics.

Take a closer look

Particular regulations to be aware of include; 

Regulation 2:

 This interprets the terms used throughout the rest of the Regulations. Of particular note is the definition of an ‘average consumer’ and ‘materially distort the economic behaviour’ – for it is this objective test that creates liability throughout much of the remainder of the Regulations.

 Regulation 3

 Imports this test by prohibiting ‘unfair commercial practices.’ For a commercial practice to be unfair it must contravene the requirements of professional diligence,’ i.e. the traders duty of care to a consumer, AND, in the language of the Regulations “materially distorts or [is] likely to distort the economic behaviour of the ‘average consumer”.

 Regulation 3:

 Cites the specific behaviours which will make a commercial practice unfair under the Regulations.

 Regulations 5,6 & 7:

 Prohibit misleading actions, misleading omissions and aggressive conduct.