UK: New Regulations On Unfair Trading

Last Updated: 21 August 2008
Article by Kristian Laingchild

The Consumer Protection from Unfair Trading Regulations 2008 came into force on 26 May. They target rogue traders but also require all businesses - whether trading on-line, on the high street or via telephone – to treat consumers fairly.

The Regulations are divided into three parts - a general prohibition on unfair commercial practices, a specific prohibition on misleading actions or omissions and aggressive commercial practices, and an annex of 31 practices which are automatically deemed unfair.

General Prohibition

The Regulations have imposed a general prohibition on all business from treating consumers unfairly. They define an unfair commercial practice as 'one that runs contrary to the requirements of professional diligence and which materially distorts the economic behaviour of a consumer or is likely to do so'. The practice may occur either before, after or during a transaction with a consumer.

Specific Prohibition

The Regulations define misleading actions and omissions, as well as aggressive practices, as 'unfair commercial practices'.

Misleading actions and omissions primarily refer to situations where false information is provided to a consumer, or information is deliberately concealed or provided in an ambiguous manner. It appears that use of 'copycat' packaging by a business could fall within this prohibition. The Regulations contain fairly detailed definitions of 'misleading actions' (Regulation 5) and 'misleading omissions' (Regulation 6).

An 'aggressive commercial practice' refers to a situation where a consumer is subjected to harassment, coercion or undue influence by a trader and the trader's actions cause or are likely to cause the consumer to make a decision concerning a transaction which he may not otherwise have made. The Regulations contain a detailed test for an 'aggressive commercial practice' (Regulation 7).

Deemed Unfair Practices

The Regulations set out a blacklist of 31 commercial practices which are unfair in all circumstances. For example, describing a product as free or without charge, if the consumer has to pay anything other than unavoidable costs involved in responding to the trader and collection or delivery of the item. This prohibition is not intended to include 'buy one get one free' promotions but rather 'bundling' situations, where part of a package of goods or services is described as free, when in practice, there is an expense in acquiring the larger item. This sometimes occurs with communication services.

Other banned practices include making persistent and unwanted communications by telephone, fax or other remote media, visiting a consumer's home and ignoring requests to leave or not to return, limited time offers which are later extended, bogus closing down sales, and displaying false testimonials on websites.

Enforcement And Penalties

The Regulations will be enforced by the Office of Fair Trading (OFT) as well as the local authority Trading Standards Services, which have wide powers of investigation, including making test purchases and entering premises and seizing goods or documents.

A breach of the Regulations is a criminal offence. The penalties on conviction are a fine not exceeding £5,000 and up to two years' imprisonment. A business being investigated may also be subject to injunctions brought under Part 3 of the Enterprise Act 2002.

Due Diligence Defence

Providing a business can demonstrate that it took reasonable precautions and exercised due diligence to avoid committing an offence, this is a defence if it can prove that either the commission of the offence was due to a mistake, reliance on information supplied by another person, the act or default of another person, an accident, or another cause beyond its control (Regulation 17).


It has been suggested that the Regulations are beneficial to businesses since they will clamp down on those using unfair commercial practices to gain a competitive advantage. However, until there are some reported decisions, the question of whether a particular practice is unfair, and the level of proof required for a defence, remain uncertain.

While the OFT has commented that 'businesses which already act honestly and fairly may not need to change the way they work at all', UK businesses should be cautious and consider the following measures:

  • reviewing existing marketing and sales practices with consumers to consider their fairness;

  • ensuring that no existing practice falls within the 31 deemed unfair practices;

  • considering not only the actions of a business, but also its omissions when dealing with consumers;

  • providing education and training to staff concerning the Regulations, in particular covering sales strategies and techniques.

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.

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