Legal Updates

Consumer Protection - The Consumer Protection from Unfair Trading Regulations 2008

The Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277) (CPRs) will come into effect on 26 May 2008.

The CPRs will amend and replace the current legislation in force. Under the CPRs unfair commercial (sales) practices will be prohibited such as:-

• prize draw scams
• bogus closing down sales
• aggressive doorstep selling

A breach of the prohibition on unfair sales practices under the CPRs will be a criminal offence (except in certain circumstances). There will be a defence of due diligence and innocent publication of advertisements. A summary of the CPRs is given below:-

Unfair Commercial Practice (Reg 3)

A commercial practice is unfair if—

• it contravenes the requirements of professional diligence; and
• it materially distorts or is likely to materially distort the economic behaviour of the average consumer with regards to the product.

A commercial practice is unfair if—

• it is a misleading action (see regulation 5);
• it is a misleading omission (see regulation 6);
• it is aggressive (see regulation 7); or

Misleading actions (Reg 5)

• A commercial practice is a misleading action if it satisfies the conditions in either paragraph (2) or paragraph (3)

…“(2) A commercial practice satisfies the conditions of this paragraph—

(a) if it contains false information and is therefore untruthful in relation to any of the matters in paragraph (4) or if it or its overall presentation in any way deceives or is likely to deceive the average consumer in relation to any of the matters in that paragraph, even if the information is factually correct; and

(b) it causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise.

(3) A commercial practice satisfies the conditions of this paragraph if—

(a) it concerns any marketing of a product (including comparative advertising) which creates confusion with any products, trade marks, trade names or other distinguishing marks of a competitor; or

(b) it concerns any failure by a trader to comply with a commitment contained in a code of conduct which the trader has undertaken to comply with, if—

(i) the trader indicates in a commercial practice that he is bound by that code of conduct, and

(ii) the commitment is firm and capable of being verified and is not aspirational,

and it causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise, taking account of its factual context and of all its features and circumstances.

(4) The matters referred to in paragraph (2)(a) are—

(a) the existence or nature of the product;

(b) the main characteristics of the product (as defined in paragraph 5);

(c) the extent of the trader’s commitments;

(d) the motives for the commercial practice;

(e) the nature of the sales process;

(f) any statement or symbol relating to direct or indirect sponsorship or approval of the trader or the product;

(g) the price or the manner in which the price is calculated;

(h) the existence of a specific price advantage;

(i) the need for a service, part, replacement or repair;

(j) the nature, attributes and rights of the trader (as defined in paragraph 6);

(k) the consumer’s rights or the risks he may face.

(5) In paragraph (4)(b), the “main characteristics of the product” include—

(a) availability of the product;

(b) benefits of the product;

(c) risks of the product;

(d) execution of the product;

(e) composition of the product;

(f) accessories of the product;

(g) after-sale customer assistance concerning the product;

(h) the handling of complaints about the product;

(i) the method and date of manufacture of the product;

(j) the method and date of provision of the product;

(k) delivery of the product;

(l) fitness for purpose of the product;

(m) usage of the product;

(n) quantity of the product;

(o) specification of the product;

(p) geographical or commercial origin of the product;

(q) results to be expected from use of the product; and

(r) results and material features of tests or checks carried out on the product.

(6) In paragraph (4)(j), the “nature, attributes and rights” as far as concern the trader include the trader’s—

(a) identity;

(b) assets;

(c) qualifications;

(d) status;

(e) approval;

(f) affiliations or connections;

(g) ownership of industrial, commercial or intellectual property rights; and

(h) awards and distinctions.

(7) In paragraph (4)(k) “consumer’s rights” include rights the consumer may have under Part 5A of the Sale of Goods Act 1979(5) or Part 1B of the Supply of Goods and Services Act 1982(6)”.

Misleading omissions(Reg 6)

“…(1) A commercial practice is a misleading omission if, in its factual context, taking account of the matters in paragraph (2)—

(a) the commercial practice omits material information,

(b) the commercial practice hides material information,

(c) the commercial practice provides material information in a manner which is unclear, unintelligible, ambiguous or untimely, or

(d) the commercial practice fails to identify its commercial intent, unless this is already apparent from the context,

and as a result it causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise.

(2) The matters referred to in paragraph (1) are—

(a) all the features and circumstances of the commercial practice;

(b) the limitations of the medium used to communicate the commercial practice (including limitations of space or time); and

(c) where the medium used to communicate the commercial practice imposes limitations of space or time, any measures taken by the trader to make the information available to consumers by other means.

(3) In paragraph (1) “material information” means—

(a) the information which the average consumer needs, according to the context, to take an informed transactional decision; and

(b) any information requirement which applies in relation to a commercial communication as a result of a Community obligation.

(4) Where a commercial practice is an invitation to purchase, the following information will be material if not already apparent from the context in addition to any other information which is material information under paragraph (3)—

(a) the main characteristics of the product, to the extent appropriate to the medium by which the invitation to purchase is communicated and the product;

(b) the identity of the trader, such as his trading name, and the identity of any other trader on whose behalf the trader is acting;

(c) the geographical address of the trader and the geographical address of any other trader on whose behalf the trader is acting;

(d) either—

(i) the price, including any taxes; or

(ii) where the nature of the product is such that the price cannot reasonably be calculated in advance, the manner in which the price is calculated;

(e) where appropriate, either—

(i) all additional freight, delivery or postal charges; or

(ii) where such charges cannot reasonably be calculated in advance, the fact that such charges may be payable;

(f) the following matters where they depart from the requirements of professional diligence—

(i) arrangements for payment,

(ii) arrangements for delivery,

(iii) arrangements for performance,

(iv) complaint handling policy;

(g) for products and transactions involving a right of withdrawal or cancellation, the existence of such a right”.

Aggressive commercial practices (Reg 7)

“…(1) A commercial practice is aggressive if, in its factual context, taking account of all of its features and circumstances—

(a) it significantly impairs or is likely significantly to impair the average consumer’s freedom of choice or conduct in relation to the product concerned through the use of harassment, coercion or undue influence; and

(b) it thereby causes or is likely to cause him to take a transactional decision he would not have taken otherwise.

(2) In determining whether a commercial practice uses harassment, coercion or undue influence account shall be taken of—
(a) its timing, location, nature or persistence;

(b) the use of threatening or abusive language or behaviour;

(c) the exploitation by the trader of any specific misfortune or circumstance of such gravity as to impair the consumer’s judgment, of which the trader is aware, to influence the consumer’s decision with regard to the product;

(d) any onerous or disproportionate non-contractual barrier imposed by the trader where a consumer wishes to exercise rights under the contract, including rights to terminate a contract or to switch to another product or another trader; and

(e) any threat to take any action which cannot legally be taken.

(3) In this regulation—

(a) “coercion” includes the use of physical force; and

(b) “undue influence” means exploiting a position of power in relation to the consumer so as to apply pressure, even without using or threatening to use physical force, in a way which significantly limits the consumer’s ability to make an informed decision.

(4) 1985 c.72; section 69 was amended by paragraph 75 of Schedule 16 to the Local Government (Wales) Act 1994 (c.19) and by paragraph 144 of Schedule 13 to the Local Government etc (Scotland) Act 1994 (c.39). Back [4]

(5) 1979 c.54; Part 5A was inserted by S.I. 2002/3045. Back [5]

(6) 1982 c.29. Part 1B was inserted by S.I.2002/3045. Back [6]

A trader is guilty of an offence if—

(a) he knowingly or recklessly engages in a commercial practice which contravenes the requirements of professional diligence under regulation 3(3)(a); and

(b) the practice materially distorts or is likely to materially distort the economic behaviour of the average consumer with regard to the product under regulation 3(3)(b).

(2) For the purposes of paragraph (1)(a) a trader who engages in a commercial practice without regard to whether the practice contravenes the requirements of professional diligence shall be deemed recklessly to engage in the practice, whether or not the trader has reason for believing that the practice might contravene those requirements.

9.  A trader is guilty of an offence if he engages in a commercial practice which is a misleading action under regulation 5 otherwise than by reason of the commercial practice satisfying the condition in regulation 5(3)(b).

10.  A trader is guilty of an offence if he engages in a commercial practice which is a misleading omission under regulation 6.

11.  A trader is guilty of an offence if he engages in a commercial practice which is aggressive under regulation 7.

12.  A trader is guilty of an offence if he engages in a commercial practice set out in any of paragraphs 1 to 10, 12 to 27 and 29 to 31 of Schedule 1.

Penalty for offences (Reg 13)

A person guilty of an offence under regulation 8, 9, 10, 11 or 12 shall be liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum; or

(b) on conviction on indictment, to a fine or imprisonment for a term not exceeding two years or both”.

Time limit for prosecution (Reg 14)

“…(1) No proceedings for an offence under these Regulations shall be commenced after—

(a) the end of the period of three years beginning with the date of the commission of the offence, or

(b) the end of the period of one year beginning with the date of discovery of the offence by the prosecutor,

whichever is earlier.

(2) For the purposes of paragraph (1)(b) a certificate signed by or on behalf of the prosecutor and stating the date on which the offence was discovered by him shall be conclusive evidence of that fact and a certificate stating that matter and purporting to be so signed shall be treated as so signed unless the contrary is proved.

(3) Notwithstanding anything in section 127(1) of the Magistrates’ Courts Act 1980(7), an information relating to an offence under these Regulations which is triable by a magistrates’ court in England and Wales may be so tried if it is laid at any time before the end of the period of twelve months beginning with the date of the commission of the offence.

(4) Notwithstanding anything in section 136 of the Criminal Procedure (Scotland) Act 1995(8) summary proceedings in Scotland for an offence under these Regulations may be commenced at any time before the end of the period of twelve months beginning with the date of the commission of the offence.

(5) For the purposes of paragraph (4), section 136(3) of the Criminal Procedure (Scotland) Act 1995 shall apply as it applies for the purposes of that subsection.

(6) Notwithstanding anything in Article 19(1) of the Magistrates’ Courts (Northern Ireland) Order 1981(9) a complaint charging an offence under these Regulations which is triable by a magistrates’ court in Northern Ireland may be so tried if it is made at any time before the end of the period of twelve months beginning with the date of the commission of the offence”.

Offences committed by bodies of persons(Reg 15)

“…(1) Where an offence under these Regulations committed by a body corporate is proved—

(a) to have been committed with the consent or connivance of an officer of the body, or

(b) to be attributable to any neglect on his part,

the officer as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.

(2) In paragraph (1) a reference to an officer of a body corporate includes a reference to—

(a) a director, manager, secretary or other similar officer; and

(b) a person purporting to act as a director, manager, secretary or other similar officer.

(3) Where an offence under these Regulations committed by a Scottish partnership is proved—

(a) to have been committed with the consent or connivance of a partner, or

(b) to be attributable to any neglect on his part,

the partner as well as the partnership is guilty of the offence and liable to be proceeded against and punished accordingly.

(4) In paragraph (3) a reference to a partner includes a person purporting to act as a partner.

An enforcement authority may or may authorise any of its officers on its behalf to—

(a) make a purchase of a product, or

(b) enter into an agreement to secure the provision of a product,

for the purposes of determining whether these Regulations are being complied with”.

Power of entry and investigation, etc.(Reg 21)

“…(1) A duly authorised officer of an enforcement authority may at all reasonable hours exercise the following powers—

(a) he may, for the purposes of ascertaining whether a breach of these Regulations has been committed, inspect any goods and enter any premises other than premises used only as a dwelling;

(b) if he has reasonable cause to suspect that a breach of these Regulations has been committed, he may, for the purpose of ascertaining whether it has been committed, require any trader to produce any documents relating to his business and may take copies of, or of any entry in, any such document;

(c) if he has reasonable cause to believe that a breach of these Regulations has been committed, he may seize and detain any goods for the purpose of ascertaining, by testing or otherwise, whether the breach has been committed; and

(d) he may seize and detain goods or documents which he has reason to believe may be required as evidence in proceedings for a breach of these Regulations.

(2) If and to the extent that it is reasonably necessary to secure that the provisions of these Regulations are observed, the officer may for the purpose of exercising his powers under paragraphs (1)(c) and (d) to seize goods or documents—

(a) require any person having authority to do so to break open any container or open any vending machine; and

(b) himself open or break open any such container or open any vending machine where a requirement made under sub-paragraph (a) in relation to the container or vending machine has not been complied with.

(3) An officer seizing any goods or documents in exercise of his powers under this regulation shall—

(a) inform the person from whom they are seized, and,

(b) where goods are seized from a vending machine, inform—

(i) the person whose name and address are stated on the machine as being the proprietor’s; or

(ii) if there is no such name or address stated on the machine the occupier of the premises on which the machine stands or to which it is affixed,

that the goods or documents have been so seized.

(4) In this regulation “document” includes information recorded in any form.

(5) The reference in paragraph (1)(b) to the production of documents is, in the case of a document which contains information recorded otherwise than in legible form, a reference to the production of a copy of the information in legible form.

(6) An officer seeking to exercise a power under this regulation must produce evidence of his identity and authority to a person (if there is one) who appears to the officer to be the occupier of the premises.

(7) Where an officer seizes goods or documents in exercise of a power under this regulation they may not be detained—

(a) for a period of more than 3 months; or

(b) where the goods or documents are reasonably required by the enforcement authority in connection with the enforcement of these Regulations, for longer than they are so required.

(8) An officer entering any premises under this regulation may take with him such other persons and such equipment as may appear to him to be necessary.

(9) Nothing in this regulation or in regulation 22 gives any power to an officer of an enforcement authority—

(a) to require any person to produce, or

(b) to seize from another person,

any document which the other person would be entitled to refuse to produce in proceedings in the High Court on the grounds of legal professional privilege or (in Scotland) in proceedings in the Court of Session on the grounds of confidentiality of communications.

(10) In paragraph (9) “communications” means—

(a) communications between a professional legal adviser and his client; or

(b) communications made in connection with or in contemplation of legal proceedings and for the purposes of those proceedings.

(11) If any person who is not an officer of an enforcement authority purports to act as such under this regulation or under regulation 22 he shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale”.

Power to enter premises with a warrant (Reg 22)

“…(1) If a justice of the peace by any written information on oath is satisfied—

(a) that there are reasonable grounds for believing that Condition A or B is met, and

(b) that Condition C, D or E is met,

the justice may by warrant under his hand authorise an officer of an enforcement authority to enter the premises at all reasonable times, if necessary by force.

(2) Condition A is that there are on any premises goods or documents which a duly authorised officer of the enforcement authority has power under regulation 21(1) to inspect and that their inspection is likely to disclose evidence of a breach of these Regulations.

(3) Condition B is that a breach of these Regulations has been, is being or is about to be committed on any premises.

(4) Condition C is that the admission to the premises has been or is likely to be refused and that notice of intention to apply for a warrant under this regulation has been given to the occupier.

(5) Condition D is that an application for admission, or the giving of a notice of intention to apply for a warrant, would defeat the object of the entry.

(6) Condition E is that the premises are unoccupied or that the occupier is absent and it might defeat the object of the entry to await his return.

(7) A warrant under paragraph (1)—

(a) ceases to have effect at the end of the period of one month beginning with the day it is issued;

(b) must be produced for inspection to the person (if there is one) who appears to the officer to be the occupier of the premises.

(8) An officer entering any premises under this regulation may take with him such other persons and such equipment as may appear to him to be necessary.

(9) On leaving any premises which an officer is authorised to enter by warrant under this regulation the officer shall, if the premises are unoccupied or the occupier is temporarily absent, leave the premises as effectively secured against trespassers as he found them”.

For more information see

http://www.opsi.gov.uk/si/si2008/em/uksiem_20081276_en.pdf

 Visit http://www.rtcoopers.com/practice_corporatecommercial.php

© RT COOPERS, 2008. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.