© 2011 itsa Ltd on behalf of the Trading Standards Institute.
The Consumer Protection from Unfair Trading Regulations 2008 (known as the CPRs) cover commercial practices between traders and consumers - 'acts, omissions, course of conduct, representation or commercial communication (including advertising and marketing) by a trader, which is directly connected with the promotion, sale or supply of a product to or from consumers, whether occurring before, during or after a commercial transaction (if any) in relation to a product'. Note: a 'product' is any goods or service, and includes rights and obligations.
In the guide
The legislation
What is prohibited?
- Practices prohibited in all circumstances
- Misleading actions and omissions
- Aggressive practices (regulation 7)
- General duty not to trade unfairly (regulation 3)
What are the consequences of non-compliance?
The legislation
The Consumer Protection from Unfair Trading Regulations 2008 came into force on 26 May 2008 and implement the European Union-wide Unfair Commercial Practices Directive (UCPD). The aim of the UCPD is to harmonise consumer protection laws across the European Union to prevent business practices that are unfair to consumers and all Member States are introducing equivalent legislation.
The Regulations replace a lot of consumer protection legislation, including Part III of the Consumer Protection Act 1987 (which dealt with misleading prices), the majority of the Trade Descriptions Act 1968, and the Control of Misleading Advertising Regulations 1988.
What is prohibited?
Effectively the CPRs prohibit trading practices that are unfair to consumers. There are four different types of practices to consider:
- Practices prohibited in all circumstances
- Misleading actions and omissions
- Aggressive practices
- General duty not to trade unfairly
For the last three practice types above it is necessary to show that the action of the trader has an effect (or is likely to have an effect) on the actions of the consumer. There does not have to be a physical consumer as this is a test looking at how the average consumer is - or is likely to be - affected.
The CPRs identify three different types of consumer:
- average consumer
- targeted consumer
- vulnerable consumer
...recognising that different types of consumers may react to a practice in different ways.
1. Practices prohibited in all circumstances
Schedule 1 to the CPRs (PDF 195KB) introduces 31 practices that are always considered to be unfair and therefore are banned in all circumstances. These include:
FALSE ENDORSEMENTS/AUTHORISATIONS
- false claims of membership of trade associations
- claiming a product has been approved by a public or private body when it has not
MISLEADING AVAILABILITY
- bait advertising (or 'bait and switch') where a trader lures a consumer into believing he can buy a product at a low price when the trader is aware he does not have reasonable stock available or is not able to supply at that price, or attempts to 'sell-up' to a higher priced product
- falsely stating a product is only available for a very limited time in order to make the consumer make an immediate decision
MISLEADING CONTEXT/EFFECT
- claiming a trader is going to cease trading or move premises when he is not (for example, bogus closing down sales)
- falsely claiming a product has curative properties
- describing a product as 'free', 'gratis', 'without charge' or similar if a consumer is going to have to pay more than the cost of responding to the advertisement and collecting or paying for delivery of the item
- including an invoice or similar in marketing material, implying a consumer has ordered the product when he has not
- failing to make it clear that a person is actually a trader or creating the impression he is a consumer (for example, failing to indicate trade status when selling a second-hand car)
- creating the impression that a product can legally be sold, when in fact, it cannot
PYRAMID SCHEMES
- operating or promoting such schemes are specifically prohibited, provided they fit within the definition of a pyramid scheme (that is, a scheme where a consumer gives consideration for the opportunity to receive compensation that is derived primarily from the introduction of other consumers into the scheme, rather than from the sale or consumption of products)
PRIZE DRAWS
- competitions where the prizes described (or equivalent) are not awarded
- creating the false impression that a consumer has won, or will win, a prize when there is no prize or claiming the prize is subject to the consumer paying money or incurring a cost
AGGRESSIVE SALES
- creating the impression a consumer can't leave the premises until a contract is formed
- visiting a consumer at home and refusing to leave when asked to leave (except when the trader has a legal right to enforce a contractual obligation)
- making persistent and unwanted solicitations by phone/fax/email (except when a trader has a legal right to enforce a contractual obligation)
- making a direct exhortation to children to buy a product or to persuade their parents to buy a product for them (pester power)
- telling a consumer a trader's job will be in jeopardy if the consumer does not buy the product
UNREASONABLE DEMANDS
- requiring a consumer who wishes to claim on an insurance policy to produce irrelevant documents or failing to respond to correspondence in order to dissuade the consumer from exercising his contractual rights
2. Misleading actions and omissions
The CPRs prohibit misleading actions and misleading omissions that cause, or are likely to cause, the average consumer to take a different transactional decision - that is, any decision taken by the consumer concerning the purchasing of the product or whether to exercise a contractual right in relation to the product, including decisions not to act. This does not only relate to pre-shopping but includes after-sales and continues for the lifetime of the product.
MISLEADING ACTIONS (REGULATION 5)
This regulation prohibits giving false information to, or deceiving, consumers. A misleading action occurs when a practice misleads through the information it contains, or its deceptive presentation, and causes, or is likely to cause, the average consumer to take a different transactional decision.
There are three different types of misleading actions:
- misleading information generally (see below)
- creating confusion with competitors' products
- failing to honour commitments made in a code of conduct
The information that may be considered as misleading is very wide, and is listed in the legislation itself, including such things as:
- the existence or nature of the product
- the main characteristics of the product - for example, the benefits of the product or the geographical origin
- the price or the manner in which it is calculated
- the need for a service, part, replacement or repair
- the nature, attributes and rights of the trader - such as qualifications
MISLEADING OMISSIONS (REGULATION 6)
This regulation prohibits giving insufficient information about a product. It is a breach of the CPRs to fail to give consumers the information they need to make an informed choice in relation to a product if this would cause, or be likely to cause, the average consumer to take a different transactional decision.
A trader is required to give consumers material information, that is the information the average consumer needs, according to the context, to make an informed choice.
It is a breach of the CPRs:
- to omit material information
- to hide material information
- to provide material information in a manner that is unclear, unintelligible, ambiguous or untimely
- to fail to identify the commercial intent (unless this is apparent from the context)
3. Aggressive practices (regulation 7)
The CPRs prohibit aggressive commercial practices that intimidate or exploit consumers, restricting their ability to make free or informed choices. In order for an aggressive practice to be unfair it must cause, or be likely to cause, the average consumer to take a different transactional decision.
A commercial practice is aggressive if:
- it significantly impairs, or is likely to significantly impair, the average consumer's freedom of choice or conduct in relation to the product through the use of harassment, coercion or undue influence, and
- it thereby causes him to take a different transactional decision
To decide whether a practice breaches this regulation, account shall be taken of:
- timing, location, nature or persistence
- use of threatening or abusive language or behaviour
- exploitation by the trader of any specific misfortune or circumstance that impairs the consumer's judgement, in order to influence the consumer's decision with regard to the product
- any onerous or disproportionate non-contractual barrier imposed by the trader where a consumer wishes to exercise rights under the contract (for example, rights to terminate the contract or switch to another product or trader)
- any threat to take action that cannot legally be taken
Note: 'coercion' includes the use of physical force, and 'undue influence' means exploiting a position of power in relation to the consumer so as to apply pressure, even without the use of (or threatening to use) physical force, in a way that significantly limits the consumer's ability to make an informed decision.
4. General duty not to trade unfairly (regulation 3)
This is effectively failing to act in accordance with reasonable expectations of acceptable trading practice. Regulations 3(1) and 3(3) set out a general prohibition of unfair business to consumer practices and will allow action to be taken in relation to unfair practices which do not fit into the more specific prohibitions. This will cover a wide range of unfair practices including practices which may emerge in the future.
The general prohibition prohibits practices that:
- contravene the requirements of professional diligence (defined as the standard of special skill and care that a trader may reasonably be expected to exercise towards consumers which is commensurate with either honest market practice in the trader's field of activity, or the general principle of good faith in the trader's field of activity)
- materially distort the economic behaviour of the average consumer (or are likely to) with regard to the product (that is, appreciably to impair the average consumer's ability to make an informed decision thereby causing him to take a transactional decision that he would not have taken otherwise)
What are the consequences of non-compliance?
Enforcers may take civil enforcement action in respect of a breach of the CPRs under Part 8 of the Enterprise Act 2002. This can be done by applying to a court for an enforcement order and a breach of any order could lead to up to two years' imprisonment and/or an unlimited fine.
The CPRs also contain criminal offences that can be prosecuted by the Office of Fair Trading (OFT), trading standards services, or the Department of Enterprise, Trade & Investment in Northern Ireland (and by the Lord Advocate in Scotland). The penalties are:
- on summary conviction, a fine not exceeding the statutory maximum (currently £5,000)
- on conviction on indictment, an unlimited fine or imprisonment for up to two years (or both)
This can only be a general guide to the Regulations. For comprehensive guidance (with examples) please visit the OFT website.
Please note
This leaflet is not an authoritative interpretation of the law and is intended only for guidance. Any legislation referred to, while still current, may have been amended from the form in which it was originally enacted. Please contact us for further information.
Relevant legislation
Enterprise Act 2002
Consumer Protection from Unfair Trading Regulations 2008
Last reviewed/updated: April 2012
© 2013 itsa Ltd on behalf of the Trading Standards Institute.
