New rules on consumer protection

01/09/2008

By James Herbert, Partner & Head of Corporate & Commercial.

The Consumer Protection from Unfair Trading Regulations (CPRs) came into force on 26 May 2008. Although aimed at "cowboy traders", the new law could have broader implications for all businesses.

The principal purpose of the CPRs is to protect consumers from "sharp practices and rogue traders". The CPRs apply across all businesses involved in consumer trading.

They:

• impose a general prohibition on traders from engaging in unfair commercial practices with consumers,

• prohibit misleading actions or omissions and aggressive practices, and

• outlaw any of 31 specific examples of commercial practice which are listed in the CPRs.

The general prohibition applies to any form of trading which falls below the standard of skill and care which could reasonably be expected of the trader and which causes the consumer to make a decision in relation to the product which he would not otherwise have made.

Misleading actions can arise in several ways, for example, where a trader gives false or deceptive information relating to the characteristics of a product.

Misleading omissions can occur if material information affecting the decision-making of the consumer is hidden or presented in an unclear or ambiguous way.

Aggressive practices can occur where the consumer is harassed or pressurised into making a decision in relation to a product which he would not otherwise have made.

The CPRs list 31 specific examples of behaviour which are illegal. These are wide- ranging and include making personal visits to a consumer's home but ignoring the consumer's request to leave. Falsely claiming to be compliant with a code of conduct is also illegal.

The offences are criminal offences and are committed if a trader engages in any of the prohibited activities. The potential penalties are a fine of up to £5,000 and up to two years' imprisonment.

The practical implications of the CPRs for businesses are that they should review their procedures, terms of business and selling techniques to ensure that they comply with the law. Although the OFT stresses that any business that operates fairly is likely to be compliant with the law, businesses may not be fully aware of the all-encompassing scope of the CPRs. Training of staff to ensure compliance is also key.

For further enquiries please contact James Herbert on 01892 510000 or by email.