Difference between revisions of "The Consumer Protection from Unfair Trading Regulations 2008"

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(The Consumer Protection from Unfair Trading Regulations 2008)
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It seems to me that the general duty of fair dealing and also the prohibition on misleading or aggressive practices could be very useful as they are widely drafted.
 
It seems to me that the general duty of fair dealing and also the prohibition on misleading or aggressive practices could be very useful as they are widely drafted.
 
In particular it might be able to use them to combat some unfair aspects of debt collection practice.
 
In particular it might be able to use them to combat some unfair aspects of debt collection practice.
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 +
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== General Duty of Fair Trading ==
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This is pretty wide and would be too complicated to try and give a full explanation.
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However the test is roughly:-
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whether the trader has somehow acted unprofessionally or not in good faith,
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and whether this behaviour has had a negative effect on the consumer
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{| border="0" cellpadding="10" cellspacing="0" align="center" width="95%" style="background-color: #EEEEEE;"
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<blockquote><div style= "font-size:95%;"><font color = #EEEEEE> — </font>
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“professional diligence” means the standard of special skill and care which a trader may reasonably be expected to exercise towards consumers which is commensurate with either—
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(a) honest market practice in the trader’s field of activity, or
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(b) the general principle of good faith in the trader’s field of activity;
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</div></blockquote>
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|}
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{| border="0" cellpadding="10" cellspacing="0" align="center" width="95%" style="background-color: #EEEEEE;"
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|-----
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|
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<blockquote><div style= "font-size:95%;"><font color = #EEEEEE> — </font>
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3.—(1) Unfair commercial practices are prohibited.
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(2) Paragraphs (3) and (4) set out the circumstances when a commercial practice is unfair.
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(3) A commercial practice is unfair if—
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(a) it contravenes the requirements of professional diligence; and
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(b) it materially distorts or is likely to materially distort the economic behaviour of the average consumer with regard to the product.
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(4) A commercial practice is unfair if—
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(a) it is a misleading action under the provisions of regulation 5;
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(b) it is a misleading omission under the provisions of regulation 6;
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(c) it is aggressive under the provisions of regulation 7; or
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(d) it is listed in Schedule 1. </div></blockquote>
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|}
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== Aggressive and misleading practices ==
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It seems to me that a debt collection agency which threatens legal action over debts which are more than 6 years old and which are therefore statute barred are probably acting unfairly
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They are probably not acting in good faith as they are making unenforceable threats of legal action.
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3(3)(a) Their threats are likely to affect consumer behaviour. 3(3)(b) and reg.5(b) below
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Furthermore their threats would be misleading 3(4)(a) and reg.5(2) below
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This kind of debt collection behaviour may even be an aggressive practice under reg.7.
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Plenty to choose from. Of course none of this is completely certain until the reaction to complaints is received or court actions are taken.
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{| border="0" cellpadding="10" cellspacing="0" align="center" width="95%" style="background-color: #EEEEEE;"
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|-----
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|
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<blockquote><div style= "font-size:95%;"><font color = #EEEEEE> — </font>
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'''Misleading actions'''
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5.—(1) A commercial practice is a misleading action if it satisfies the conditions in either paragraph (2) or paragraph (3).
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(2) A commercial practice satisfies the conditions of this paragraph—
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(a) if it contains false information and is therefore untruthful in relation to any of the matters in paragraph (4) or if it or its overall presentation in any way deceives or is likely to deceive the average consumer in relation to any of the matters in that paragraph, even if the information is factually correct; and
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(b) it causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise.
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(3) A commercial practice satisfies the conditions of this paragraph if—
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(a) it concerns any marketing of a product (including comparative advertising) which creates confusion with any products, trade marks, trade names or other distinguishing marks of a competitor; or
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(b) it concerns any failure by a trader to comply with a commitment contained in a code of conduct which the trader has undertaken to comply with, if—
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(i) the trader indicates in a commercial practice that he is bound by that code of conduct, and
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(ii) the commitment is firm and capable of being verified and is not aspirational,
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and it causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise, taking account of its factual context and of all its features and circumstances. </div></blockquote>
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|}
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{| border="0" cellpadding="10" cellspacing="0" align="center" width="95%" style="background-color: #EEEEEE;"
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|-----
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|
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<blockquote><div style= "font-size:95%;"><font color = #EEEEEE> — </font>
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'''Misleading omissions'''
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6.—(1) A commercial practice is a misleading omission if, in its factual context, taking account of the matters in paragraph (2)—
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(a) the commercial practice omits material information,
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(b) the commercial practice hides material information,
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(c) the commercial practice provides material information in a manner which is unclear, unintelligible, ambiguous or untimely, or
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(d) the commercial practice fails to identify its commercial intent, unless this is already apparent from the context,
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and as a result it causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise. </div></blockquote>
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|}
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{| border="0" cellpadding="10" cellspacing="0" align="center" width="95%" style="background-color: #EEEEEE;"
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|-----
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|
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<blockquote><div style= "font-size:95%;"><font color = #EEEEEE> — </font>
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'''Aggressive commercial practices'''
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7.—(1) A commercial practice is aggressive if, in its factual context, taking account of all of its features and circumstances—
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(a) it significantly impairs or is likely significantly to impair the average consumer’s freedom of choice or conduct in relation to the product concerned through the use of harassment, coercion or undue influence; and
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(b) it thereby causes or is likely to cause him to take a transactional decision he would not have taken otherwise.
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(2) In determining whether a commercial practice uses harassment, coercion or undue influence account shall be taken of—
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(a) its timing, location, nature or persistence;
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(b) the use of threatening or abusive language or behaviour;
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(c) the exploitation by the trader of any specific misfortune or circumstance of such gravity as to impair the consumer’s judgment, of which the trader is aware, to influence the consumer’s decision with regard to the product;
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(d) any onerous or disproportionate non-contractual barrier imposed by the trader where a consumer wishes to exercise rights under the contract, including rights to terminate a contract or to switch to another product or another trader; and
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(e) any threat to take any action which cannot legally be taken.
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(3) In this regulation—
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(a) “coercion” includes the use of physical force; and
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(b) “undue influence” means exploiting a position of power in relation to the consumer so as 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. </div></blockquote>
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|}
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== Faking Credentials ==
 
== Faking Credentials ==

Revision as of 15:23, 1 June 2008

The Consumer Protection from Unfair Trading Regulations 2008

This advice has been prepared on the basis of information in:-

The Consumer Protection from Unfair Trading Regulations 2008 No.

[1]

[2]


Have you been treated unfairly by a business or a trader?

New rules introduced in May 2008 create general duties upon traders to act fairly and also identify 31 specific commercial practices as automatically unfair and therefore unlawful.

The new Consumer Protection from Unfair Trading Regulations 2008 (CPUT) create a general duty not to trade unfairly and also prohibit misleading and aggressive practices.

Unfortunately the CPUT regs have to be enforced directly by the OFT which means that the aggrieved consumer has to write a letter of complaint.

On the other hand, the OFT is obliged to follow up any complaint. The consumer does not need actually to have contracted with the trader. The complaint can be about unfair trading can be made any time during the transaction - before, during or after a contract is made and in fact there is no need to have contracted at all.

Furthermore, where a consumer has been induced to enter into a contract as a result of some unfair practice, then it seems to me that there is a basis to bring an action on a breach of contract on the grounds that all contracts must be conducted lawfully.

It seems to me that the general duty of fair dealing and also the prohibition on misleading or aggressive practices could be very useful as they are widely drafted. In particular it might be able to use them to combat some unfair aspects of debt collection practice.


General Duty of Fair Trading

This is pretty wide and would be too complicated to try and give a full explanation.

However the test is roughly:-

whether the trader has somehow acted unprofessionally or not in good faith, and whether this behaviour has had a negative effect on the consumer

“professional diligence” means the standard of special skill and care which a trader may reasonably be expected to exercise towards consumers which is commensurate with either—

(a) honest market practice in the trader’s field of activity, or

(b) the general principle of good faith in the trader’s field of activity;


3.—(1) Unfair commercial practices are prohibited.

(2) Paragraphs (3) and (4) set out the circumstances when a commercial practice is unfair.

(3) A commercial practice is unfair if—

(a) it contravenes the requirements of professional diligence; and

(b) it materially distorts or is likely to materially distort the economic behaviour of the average consumer with regard to the product.

(4) A commercial practice is unfair if—

(a) it is a misleading action under the provisions of regulation 5;

(b) it is a misleading omission under the provisions of regulation 6;

(c) it is aggressive under the provisions of regulation 7; or

(d) it is listed in Schedule 1.

Aggressive and misleading practices

It seems to me that a debt collection agency which threatens legal action over debts which are more than 6 years old and which are therefore statute barred are probably acting unfairly

They are probably not acting in good faith as they are making unenforceable threats of legal action.

3(3)(a) Their threats are likely to affect consumer behaviour. 3(3)(b) and reg.5(b) below

Furthermore their threats would be misleading 3(4)(a) and reg.5(2) below

This kind of debt collection behaviour may even be an aggressive practice under reg.7.

Plenty to choose from. Of course none of this is completely certain until the reaction to complaints is received or court actions are taken.


Misleading actions

5.—(1) A commercial practice is a misleading action if it satisfies the conditions in either paragraph (2) or paragraph (3).

(2) A commercial practice satisfies the conditions of this paragraph—

(a) if it contains false information and is therefore untruthful in relation to any of the matters in paragraph (4) or if it or its overall presentation in any way deceives or is likely to deceive the average consumer in relation to any of the matters in that paragraph, even if the information is factually correct; and

(b) it causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise.

(3) A commercial practice satisfies the conditions of this paragraph if—

(a) it concerns any marketing of a product (including comparative advertising) which creates confusion with any products, trade marks, trade names or other distinguishing marks of a competitor; or

(b) it concerns any failure by a trader to comply with a commitment contained in a code of conduct which the trader has undertaken to comply with, if—

(i) the trader indicates in a commercial practice that he is bound by that code of conduct, and

(ii) the commitment is firm and capable of being verified and is not aspirational,

and it causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise, taking account of its factual context and of all its features and circumstances.


Misleading omissions

6.—(1) A commercial practice is a misleading omission if, in its factual context, taking account of the matters in paragraph (2)—

(a) the commercial practice omits material information,

(b) the commercial practice hides material information,

(c) the commercial practice provides material information in a manner which is unclear, unintelligible, ambiguous or untimely, or

(d) the commercial practice fails to identify its commercial intent, unless this is already apparent from the context,

and as a result it causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise.

Aggressive commercial practices

7.—(1) A commercial practice is aggressive if, in its factual context, taking account of all of its features and circumstances—

(a) it significantly impairs or is likely significantly to impair the average consumer’s freedom of choice or conduct in relation to the product concerned through the use of harassment, coercion or undue influence; and

(b) it thereby causes or is likely to cause him to take a transactional decision he would not have taken otherwise.

(2) In determining whether a commercial practice uses harassment, coercion or undue influence account shall be taken of—

(a) its timing, location, nature or persistence;

(b) the use of threatening or abusive language or behaviour;

(c) the exploitation by the trader of any specific misfortune or circumstance of such gravity as to impair the consumer’s judgment, of which the trader is aware, to influence the consumer’s decision with regard to the product;

(d) any onerous or disproportionate non-contractual barrier imposed by the trader where a consumer wishes to exercise rights under the contract, including rights to terminate a contract or to switch to another product or another trader; and

(e) any threat to take any action which cannot legally be taken.

(3) In this regulation—

(a) “coercion” includes the use of physical force; and

(b) “undue influence” means exploiting a position of power in relation to the consumer so as 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.


Faking Credentials

Claiming to be a signatory to a code of conduct when the trader is not.

Have you ever decided to get in a plumber, or builder or architect etc? If they tell you that they are signatories to a code of conduct but turn out not to be, they are acting unfairly. Whether you have already entered into an agreement with them or not, and even if you only find out afterwards, you can complain to the OFT in the first instance. If you have entered into an agreement with them you could even sue them for breach of contract if you have suffered in some way - such as paying over the odds for a professional firm.

False Standards Claims

Displaying a trust mark, quality mark or equivalent without having obtained the necessary authorisation.

Have you bought products or services on the basis of a quality mark which you noticed and trusted? If that quality mark turns out not to have been authorised then trader is acting unfairly and you can complain to the OFT even if you haven yet bought the item yet. If you have actually bought it then you may be able to sue in breach of contract.

False Code of Conduct

Claiming that a code of conduct has an endorsement from a public or other body which it does not have.

If you are considering dealing with a trader - or you are dealing with him and you discover that the code of conduct which he is party to is not as good as he says it is then your trader is operating an unfair practice and you can complain. If you have actually started dealing with the trader then you may also be able to sue for a breach of contract.

False Endorsements

Claiming that a trader (including his commercial practices) or a product has been approved, endorsed or authorised by a public or private body when the trader, the commercial practices or the product have not or making such a claim without complying with the terms of the approval, endorsement or authorisation.

I stayed at a hotel once which had a big AA 2 star sign outside it. The standard was so poor that I complained to the AA. They told me that the hotel was not approved by the AA. It was an old sign used by the previous management. I argued that they had a responsibility to keep track of their old signs and to take them back when a hotel lost its rating. They paid me an ex Gratia sum in compensation.

Now you could also complain to the OFT

Special offer - out of stock

Making an invitation to purchase products at a specified price without disclosing the existence of any reasonable grounds the trader may have for believing that he will not be able to offer for supply, or to procure another trader to supply, those products or equivalent products at that price for a period that is, and in quantities that are, reasonable having regard to the product, the scale of advertising of the product and the price offered (bait advertising).

How many of us have signed up to buy goods - on the internet, for instance - and ended up waiting an awful long time as you are notified of a series of delays. Now it is clear that this is an unfair practice and you can complain.

Bait and Switch

Making an invitation to purchase products at a specified price and then— (a) refusing to show the advertised item to consumers, (b) refusing to take orders for it or deliver it within a reasonable time, or (c) demonstrating a defective sample of it, with the intention of promoting a different product (bait and switch).

Very similar to bait selling. It's unfair. Complain.

If you have parted with your money then you can sue.

What can you sue for? Well you might like to know that you can force the bait-seller to pay you enough to pay for the equivalent item elsewhere - even if it is more expensive.


False Sales

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.

Have you seen any local shops which seem to display permanent signs claiming that they only have a few stock items left? If it's untrue then its unfair