Radical Changes To Consumer Law

Businesses will soon no longer have to face unfair competition from traders who use underhand practices to sell their products.

On the 26th May this year we will see what is being hailed as the most radical change to consumer law in 40 years with the implementation of the Consumer Protection From Unfair Trading Regulations.

The Regulations began their life in the European Commission back in 2003 in response to complaints arising from increased multi-national trading and the internet trading boom. A harmonisation of European consumer law was seen as crucial. As a result, traders and sellers in the UK who deal with consumers will now have to observe a much more rigid set of rules concerning how they market and sell products to their customers. It will affect all businesses who sell direct to the public.

The Regulations are designed to protect vulnerable and sometimes gullible customers who sometimes fall foul of unscrupulous businesses that make false or misleading claims about their products, or use unfair pressure to clinch the sale.

The law was intended to come into force on 6th April 2008, but was delayed due to a protest by businesses who claimed that they were not ready for it. Those businesses must now get to grips with the new law very quickly, because a breach of the regulations is a criminal offence punishable with heavy fines and even imprisonment for managers and directors. Businesses must understand the importance and severity of this law.

The Regulations impose a general ban on unfair commercial practices.

And they expressly prohibit 31 specific unfair selling and marketing techniques.

For example, luring customers in with an unbelievably cheap product without telling the consumer that there are only a very small number of these products available – known as bait advertising – will be a breach of the Regulations.

Exhorting children to persuade their parents to buy the product will also be prohibited.

Prize draw companies will also be dealt a hammer blow as they are no longer allowed to advertise a prize where the ‘winner’ has to incur expense in claiming the ‘prize’ (if it exists at all).

Harassment and undue pressure by salesmen, whether over the telephone or in person, is now prohibited.

Most businesses will have no difficulty in complying with the new law since they do not engage in unfair or misleading sales practices. Even so, those businesses which sell goods direct to the public should ensure that they are aware of the full impact of the Regulations. We also recommend that they should review their sales processes and training to ensure that their sales agents and staff are aware of and comply with the new law.

The consequences otherwise could be dire!

Please contact Richard Coombs for further information or advice.

Published 08/05/2008. The author of this article is Richard Coombs