UK: Consumer Protection Strengthened Against Misleading Or Aggressive Trading Practices

Last Updated: 6 November 2013
Article by Paul Herbert and Zachary Brown

On 06 August 2013 the Department for Business, Innovation and Skills (BIS) published the Draft Consumer Protection from Unfair Trading (Amendment) Regulations 2013 (the "Draft Regulations") for scrutiny.

According to BIS, unfair consumer practices incur a cost to the economy of around £3.3 billion a year and 60% of the population has fallen victim to unscrupulous traders. Elderly and vulnerable consumers are particularly susceptible to misleading or aggressive trading practices which take place, for example, through door-step selling.

The Draft Regulations represent an attempt by BIS to provide greater protection for consumers against these practices and are intended to address shortcomings in the current regime, which was created by the Consumer Protection from Unfair Trading Regulations 2008 ("CPUT").

The Draft Regulations will provide consumers with a new direct right of redress against traders for misleading or aggressive practices, as well as extending the protection provided by CPUT to cover misleading and aggressive demands for payment.

Direct right of redress for consumers

Under the existing consumer protection regime, consumers have no right to take direct action against traders for misleading or aggressive practices. Consequently, consumers' rights can only be enforced by public bodies such as the Office of Fair Trading or Trading Standards Services taking action on their behalf. This represents a key shortfall in UK consumer protection when compared to many other European countries, such as Ireland, where consumers are permitted to take action in their own right.

The Draft Regulations will remedy this shortcoming by providing consumers with a new right to take direct action against traders. The new right will be available in respect of all transactions, including transactions involving digital content (more on this below). However, financial services (except consumer credit and debt collection) and land transactions (except residential leases) will be excluded.

For the right to redress to be available, consumers must satisfy a series of conditions:

  • Contract or payment – The consumer must enter into a contract with the trader or make a payment to the trader.
  • Prohibited practice – The trader must have engaged in a misleading action or aggressive practice which causes or is likely to cause the "average consumer" to take a transactional decision which he would not have done otherwise. This does not extend to misleading omissions. The "average consumer" is considered to be reasonably well-informed, observant and circumspect, although this test is relaxed in respect of consumers who are considered to be vulnerable.
  • Significant factor – The prohibited practice must have been a significant factor in the consumer's decision to enter into the contract or make the payment. This will be judged by reference to the consumer in question rather than the average consumer.

What remedies are available?

Where a consumer satisfies the conditions for the right to redress, several remedies will be available to him:

  • Right to unwind – Both parties will be released from their obligations under the contract and the consumer may receive a full refund. The consumer must exercise the right to unwind within 90 days of the date the contract is entered into or the date the goods are delivered, whichever is the later. If the consumer has used some of the product and can only return part of it, or if a service has been partly performed, the right to unwind will still be available provided that the product in question is capable of rejection in the sense that it has not been fully consumed or performed. Consumers are required to make any goods available for collection by the trader.
  • Right to a discount – The consumer may receive a discount on the price paid. The amount of discount depends on the level of seriousness of the prohibited practice, ranging from a 25% discount for minor consumer detriment to 100% for very serious detriment. The 90-day limit does not apply to this right and there is no requirement that the goods are capable of rejection. Where a consumer has the right to a discount either the consumer or the trader may also choose to terminate the contract.
  • Right to damages – Consumers may claim damages for financial loss or for distress, physical discomfort and inconvenience caused by the prohibited practice if the purpose of the contract was to provide pleasure, relaxation or peace of mind. This right is also not subject to the 90-day limit and there is no requirement that the goods are capable of rejection. However, the right to damages will be limited to the amount (if any) the consumer was unable to recover by exercising the other rights.

A consumer may claim either the right to unwind or the right to a discount but not both, although the right to damages is always available. 

Misleading or aggressive demands for payment

The Draft Regulations also extend the scope of the current regime by protecting consumers from misleading or aggressive demands for payment which may not involve the supply of goods or services. For example, demands from debt collection agencies or demands from utility companies made to consumers who are not customers.

Where consumers make payments to traders in response to misleading or aggressive demands, they will have a direct right to unwind the payment if they were "not required" to make all or part of it. The consumer will receive back any amount he was not required to pay. There is no requirement for a contract, no 90-day limit applies and it is not necessary for there to be a product which is capable of rejection.

Digital content

The Draft Regulations will apply to transactions where digital content has been supplied in return for money or virtual currency, meaning that consumers will enjoy significantly greater protection in transactions concerning games, music and other forms of content or downloads. For the purposes of the right to unwind, digital content will only be considered to have been fully consumed if it has been available to the consumer for a fixed period and that period has expired.

Implementation

The Government has yet to announce a date when the draft Regulations will come into force. However, it is clear that the regulations will apply to commercial practices which began before the coming into force date and continue after that date (though consumers will only be able to exercise their direct right to redress where a contract has been entered into or a payment made after the coming into force date) as well as any commercial practices which begin on or after the coming into force

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 Mondaq.com.

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

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please 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

Mondaq.com (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 www.mondaq.com

To Use Mondaq.com 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.

Disclaimer

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.

General

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