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 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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.