New rights to redress
As of 1 October 2014, new amendments have been made to the Consumer Protection from Unfair Trading Regulations (the "Regulations") which gives you new rights to redress if you've been the victim of misleading actions or aggressive selling.
Read on to find out more about your new rights.
There are three main sections in the "Regulations". These are as follows:
- A general ban on unfair commercial practices
- A ban on misleading and aggressive practices which are assessed in light of the effect they have, or are likely to have, on the average consumer
- The 'blacklist' of commercial practices which will always be unfair and so are banned outright
What is unfair?
Under the Regulations, a commercial practice is 'unfair' if it fits both of the following requirements:
- It falls below the good-faith standards of skill and care that a trader in that industry would be expected to exercise towards customers, and
- It affects, or is likely to affect, consumers' ability to make an informed decision about whether to purchase a particular product
A trader will be committing an offence under the Regulations if he knowingly or recklessly engages in an 'unfair' practice.
It is an offence under the Regulations for traders to use misleading or underhand tactics to get you to part with your cash or make some other transactional decision that you would not otherwise have made.
Misleading actions include advertising goods that don't exist, or offering just a few items at the advertised price with no hope of meeting large demand. Traders are also banned from making misleading comparisons, so a trader cannot claim 'product A lasts twice as long as product B' if in fact Product A lasts only slightly longer.
If a trader has signed up to a code of practice, then if it fails to follow this code, it could be a breach of the Regulations.
For example, if a garage has signed up to the Motor Industry Code of Practice for Service and Repair, failing to follow it could constitute a breach of the Regulations.
Traders are also banned from giving false information about the characteristics of goods (for example 'we only sell genuine, branded parts', when in reality they are selling non-branded spare parts) and about whether a product needs servicing or replacing.
It is also unlawful for traders to mislead consumers about their legal rights or for a trader to give false or deceptive information about his business, status or qualifications.
Sometimes it's not what's actually said that's the problem. Sometimes it's what's been left out that's the issue.
The Regulations also offer protection against traders who are economical with the truth, or miss out key information that you might need to make an informed decision.
Traders must make sure the information is provided in a timely manner - and not so late that it's of no use to you.
A trader will be committing an offence if it does any of the following:
- omits material information that the average consumer needs, according to the context, to make an informed decision about a transaction
- hides or provides material information in an unclear, unintelligible, ambiguous or untimely manner
- fails to identify that a transaction has a profit-making motive (where this isn't already apparent from the context)
Information must also be displayed clearly - obscure presentation is tantamount to an omission.
Sales tactics can greatly influence a consumer's decision. Traders who fail to take no for an answer, refuse to leave until a contract is signed or use threatening behaviour will be committing an offence under the Regulations.
A commercial practice is considered aggressive if, by means of harassment, coercion or undue influence, it significantly impairs (or is likely to significantly impair) the average consumer's freedom of choice or conduct, which then leads the consumer to take a transactional decision that they would otherwise not have made.
The legislation contains a list of criteria to help determine whether a commercial practice uses harassment, coercion, including physical force, or undue influence.
Undue influence is defined as 'exploiting a position of power... 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.'
If a trader is accused of misleading consumers or acting aggressively, it's not enough to simply demonstrate the activity.
It also has to be shown that the practice influenced the consumer's decision, or that the practice is likely to influence consumers' decisions.
This doesn't necessarily mean that the consumer has to have entered into a contract, just that their actions were influenced in some way.
It could be enough that the consumer phoned the trader or decided to go into their shop.
The blacklist of banned practices
In addition to tackling misleading and aggressive behaviour, the Regulations blacklist 31 specific practices, such as claiming something is free when it's not and persistent cold-calling.
In the case of these blacklisted practices it's enough simply to demonstrate wrongdoing, and there is no need to show that it influenced the consumer's decision in any way. A trader taking part in any of the blacklisted practices is committing a criminal offence.
The banned practices under the Regulations are to ensure that traders, marketing professionals and customers are clear about what is prohibited and help provide consumer protection.
The list of banned practices includes the following:
- Bait advertising Luring the consumer with attractive advertising around special prices when the trader knows that he cannot offer that product, or only has a few in stock at that price.
- Bait and switch Promoting one product with the intention of selling you something else
- Limited offers Falsely stating that a product will only be available for a very limited time, or that it will only be available on particular terms for a very limited time, in order to elicit an immediate decision and deprive consumers of sufficient opportunity or time to make an informed choice.
- False free offers Describing a product as free or without charge if the consumer has to pay anything other than the unavoidable cost of responding to the offer and collecting or paying for delivery of the item.
- Pressure selling Creating the impression that the consumer cannot leave the premises until a contract is formed.
- Aggressive doorstep selling Conducting personal visits to the consumer's home ignoring the consumer's request to leave or not to return.
Trading within the EU
The Regulations implement the European Unfair Commercial Practices Directive (2005/29/EC), which aimed to clarify consumers' rights and simplify the process of trading within the EU.
The Unfair Commercial Practices Directive gives you the same protection against unfair practices and rogue traders whether you're buying from your corner shop or purchasing from a website based in Spain.
This also means that businesses can advertise and market to over half a billion consumers in the EU, in the same way they do to domestic customers.
The principle aim is to boost consumer confidence and give businesses a uniform and transparent EU wide set of rules.
New right to redress
As of 1st October 2014 new amendments have been made to the Regulations which give you new rights to redress - if you've been the victim of a misleading action - for example a false statement - or aggressive selling.
These break down into three key areas:
A right to undo the contract You will have 90 days to end the contract and get a refund. The 90-day time limit will start on the latest of when:
- you entered into the contract
- you first received the goods, services or digital content
- the lease began (if the contract is a lease), or
- your right of cancellation is first exercisable.
You can only receive a refund if you haven't fully consumed goods or digital products, or received a service in full.
This is also on the provision that any goods supplied to you are made available for collection by the trader.
It's important to note that if you took out finance to pay for a contract that was made as a result of misleading or aggressive selling, you can get out of the contract and recoup anything that you have paid.
A right to a discount on the price paid You will be able to seek a discount in respect of past or future payments due under a contract.
For contracts worth £5,000 or less, the Regulations entitle you to a 25%, 50%, 75% or 100% discount on the payments depending on whether the trader's breach is considered to be minor, significant, serious or very serious. For contracts worth over £5,000, you are entitled to a discount to the extent that the contract price exceeded the market price.
The level of seriousness of the trader's actions will depend on their behaviour, the impact this has had on you and how long it has been since you signed the contract.
If you choose to receive a discount, you cannot then cancel the contract: you have to choose one remedy or the other.
An entitlement to seek damages If you incur a financial loss that you wouldn't have done if it weren't for the trader's actions, you will be able to make a claim for damages. You can make a claim for damages as well as choosing to receive a discount or cancel the contract.
A claim can also be made if you have suffered alarm, distress or physical inconvenience or discomfort as a result of the trader's actions.
Be aware that traders have a defence to many of the offences set out in the Regulations if they can demonstrate that their actions were due to an accident, a mistake, the act or default of another person, information supplied by another person, or factors outside of their control. However, they can only rely on this defence if they took reasonable precautions and exercised all due diligence to avoid committing the offence.Important factors to note:
You must have entered into a contract For these new rights to redress to apply, you must have entered into a contract.
This is different from the rest of the regulations where it is enough to show you took some other kind of transactional decision, like going into a shop because of a misleading ad in the window.
Misleading action must be a significant factor If you entered into a contract as a result of a misleading action or aggressive selling, you will need to show that this was at least a significant factor in your decision to enter into the contract.
Misleading omissions are not covered These new rights to redress do not apply to misleading omissions.
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