News & Publications

Consumer Rights and Business Wrongs

Author(s)
Kate McCormick

The Consumer Protection from Unfair Trading Regulations 2008 (CPRs) came into force in May 2008. They prohibit unfair business-to-consumer commercial practices at all stages of a transaction. There are three categories of unfair practices:

1. The General Prohibition
A commercial practice is unfair if it is not professionally diligent and materially distorts the economic behaviour of the average consumer (for example, if it makes them buy a product they would not otherwise buy).

The average consumer is defined as ‘reasonably well informed and observant taking into account social, cultural and linguistic factors’ and the standard of professional diligence is deemed to be a trader carrying out honest market practice within his field.

2. Misleading acts or omissions and aggressive commercial practices
Commercial practices which are misleading or aggressive and which cause the average consumer to take a different decision, are prohibited, even if a trader does not intend them.

There is a defence of ‘due diligence’ if the offence was due to a cause beyond the trader’s control, and all reasonable precautions and due diligence were exercised to avoid it.

3. Prohibition of 31 Specified Practices
The third prohibition is of 31 specific banned practices which will always be unfair, subject to the ‘due diligence’ defence applying.

Consumers cannot bring claims directly: Trading Standards and The Office of Fair Trading enforce the Regulations; penalties can include up to 2 years’ imprisonment and unlimited fines for a company and its directors.

If a business operates responsibly it is unlikely to carry out any ‘Specified’ Practices. However, until tried in court, the CPRs are open to interpretation and likely to be construed in the consumer’s favour. Judges may also use the General Prohibition as a safety net to capture perceived gaps in other consumer legislation.

Action points:

1. Written terms and conditions are a wise investment when expertly drafted by a solicitor to accord with the Regulations. This will help to ensure that traders operate in line with the Regulations and, provided they do, will be evidence in their favour if a complaint is made.

2. Traders should have their business terms and conditions regularly reviewed by a solicitor to ensure they are fair, accurate and not out of date or misleading, and should check that they do in fact operate as they suggest.

3. Traders should always keep the Regulations in mind and comply with any applicable market Codes of Practice. Staff should be familiar with terms and conditions and traders should have clear policies and procedures to ensure staff deal with customers fairly.

For more information, contact Kate McCormick at Birkett Long LLP on 01206 217310 or email kate.mccormick@birkettlong.co.uk

Media
Colchester Business Gazette

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