UK: The Unfair Commercial Practices Directive What Does It All Mean?

Last Updated: 30 July 2007
Article by Hannah Rigby

Originally published in Lawrence Graham's 'SmartLaw' newsletter, March 2007

© Lawrence Graham LLP

The Unfair Commercial Practices Directive (2005/29/EC), replacing Europe’s patchwork of national regimes with a standardised set of EU-wide regulations, will be transposed into UK law by June 2007 and come into force by December 2007. So, what will it mean in practice?

By harmonising the EU’s unfair trading laws, the new Unfair Commercial Practices Directive (the Directive) will clarify consumer rights and so facilitate cross-border trade; its ruling concept of ‘maximum harmonisation’ will in most cases also prevent Member States from applying provisions stricter than those required by the Directive. In essence, the new Directive imposes a general obligation on all businesses not to treat consumers unfairly. In so doing it will capture a very wide range of unfair conduct across all business sectors including unfair practices that have not yet been dreamt up. It will also prohibit businesses from misleading consumers or subjecting them to aggressive selling techniques. There are extra protections for vulnerable consumers, so often the primary target of unfair commercial practices.

Even though the Directive applies only to business-to- consumer commercial practices, the DTI has already indicated that, even where the consumer’s only direct commercial contact is with a retailer, it will apply the law further up the supply chain, for example against a manufacturer who falsely labels its products.

The Directive contains clear rules to determine when a commercial practice will be deemed unfair. These fall broadly into three categories:

  • general prohibitions;
  • specific examples of misleading actions/omissions and aggressive commercial practices;
  • an annex of 31 practices that will be deemed unfair in any circumstances.

General prohibition

An "unfair commercial practice" is one that runs contrary to the requirements of professional diligence and which materially distorts a consumer’s economic behaviour, or is likely so to do.

This benchmark will normally be judged by the standards of "the average consumer", although in certain circumstances it will be adjusted to the more exacting standards of "the vulnerable consumer".

Misleading and aggressive

The vast majority of commercial practices defined as unfair under the general prohibition will fall into two categories; they will be "misleading" and/or "aggressive". An important objective of the Directive is to create greater legal certainty, so the ways in which a commercial practice can stray into this territory is set out in detail.

A misleading commercial practice will contain false information (i.e. be untruthful) or will in some way deceive, or be likely to deceive, the average consumer into taking a transactional decision that he would not otherwise have made. An aggressive commercial practice achieves much the same outcome but by means of harassment, coercion (including physical force) or undue influence so as to significantly impair (or be likely to impair) the average consumer’s freedom of choice or conduct.

Always unfair

The list of the 31 practices which will always be considered unfair contains both misleading and aggressive commercial practices which are all too common, including:

  • falsely claiming to be a signatory to a code of conduct or to be approved by a recognised body;
  • advertising a product as a special offer without disclosing that it may in fact be unavailable (these are called ‘bait advertising’ scams);
  • falsely stating that a product will be available for a very limited time in order to obtain an immediate decision;
  • falsely claiming that a product facilitates success in games of chance;
  • significantly misrepresenting the risk to the consumer or his family of a decision not to purchase the product in question;
  • creating the impression that the consumer cannot leave the business premises until a contract has been formed;
  • making personal visits to the consumer’s home and ignoring the consumer’s request to leave and/or stay away;
  • failing to respond to pertinent correspondence in order to dissuade a consumer from exercising his contractual rights;
  • demanding payment for products supplied even though they were not ordered by the consumer in the first place (inertia selling); and
  • establishing, operating or promoting a pyramid promotional scheme.


The government has plans for an enforcement regime which, it says, will tackle unfair practices without over-burdening businesses that trade fairly. It is likely to include the use of civil sanctions (including injunctions brought under the Enterprise Act 2002) as well as criminal penalties (the results of a consultation on criminal sanctions are yet to be published).

The Directive also allows for enforcement action to be taken against groups of traders who are all using similar unfair practices. Individuals or organisations considered under national law to have "a legitimate interest in combating unfair commercial practices" – consumer organisations, for example – are also entitled to apply to the courts for orders halting or preventing unfair commercial practices.

UK implementation

The DTI has issued consultation documents on the implementation of the Directive and is currently investigating whether or not criminal sanctions are required to help enforce its provisions. Draft legislation is expected in early April 2007.

Maximum harmonisation

The UK is one of the few EU countries not to already have some form of general fair trading duty incorporated into its national law. Instead we rely mainly on sector-specific legislation. The Directive will become the mainstay of the UK’s fair trading legislation, and the ‘maximum harmonisation’ approach will require the government to undertake a wide-ranging simplification of existing consumer laws (in particular the Consumer Protection Act 1987, Trade Descriptions Act 1968 and the Weights and Measures Act 1985) to ensure that where they overlap with the new Directive they conform to its principles.

Impact on businesses

Put succinctly, if your business supplies or markets goods and services to or for consumers then the Directive may well have an impact on your operations and you would be wise to familiarise yourself with the new legislation, in particular the general prohibition on treating consumers unfairly.

A simplified legal framework could be good news, improving the business community’s understanding of consumer legislation, making it easier to conform and, therefore, reducing time spent on compliance. However, there will be initial costs associated with familiarisation and the repeal of some long-standing consumer legislation could lead to legal uncertainty where, for example, old prescriptive rules are replaced by a general duty. In some situations this new uncertainty may not lift until the courts examine some individual test cases.

An important development

So, this is an important Directive for three main reasons:

  • Its scope and the principles-based approach mean that it will catch unfair practices which currently fall between existing UK and EU rules. It also sets a standard against which all new practices will automatically be judged.
  • The general prohibition on unfair trading means that there should be no need to introduce specific regulations against new unfair practices as they emerge.
  • It strengthens and harmonises consumer rules across the EU helping to build consumer confidence in the internal market.

Though the precise scope of how the Directive will be implemented in the UK remains to be seen, it is clear that its implementation will have a considerable impact on UK consumer legislation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions