Fair trade or foul?
New regulations to prevent unfair trading with consumers are due to come into force on 26 May 2008, subject to parliamentary approval.
The Consumer Protection from Unfair Trading Regulations 2008 (CPRs) will apply to all UK businesses and will harmonise the legislation preventing unfair trading practices across the European Community.
The CPRs replace much of the existing fair trading and trading standards legislation, including most of the Trade Descriptions Act 1968. They aim to prevent unfair trading by implementing a principles-based approach that ensures that traders abide by the general spirit of the law – as opposed to merely the letter of the law, as under the current legislation.
According to a spokesperson for the Department for Business Enterprise & Regulatory Reform (BERR), ‘the new law is there to target the rogue traders, who have sometimes managed to find a way around the letter of the law, and our view is that honest businesses have nothing to fear from the new measures. But it’s still worth all businesses checking that they comply with the requirements.’
There are 31 types of unfair commercial practices that are banned outright by the CPRs. All business owners should familiarise themselves with these – they are listed in BERR guidance downloadable from the Office of Fair Trading website. There are severe penalties and possible prosecution for those who fall foul of the regulations. The key message is that a lack of intention to mislead is not on its own a defence.
Even businesses that pride themselves on their fair-mindedness could find that they are unwittingly overstepping the permitted boundaries, particularly with regard to using selling techniques that are considered aggressive. For example, the CPRs do not allow ‘making persistent and unwanted solicitations by telephone, fax, e-mail or other remote media, except in circumstances and to the extent justified to enforce a contractual obligation.’
Also banned is ‘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.’
The regulations set great store on avoiding commercial practices that can be unfair by being misleading – by omission as well as by action. The descriptions of any goods and services you sell, for example, must be accurate with regard to fitness for stated purpose, the method, place and date of manufacture and composition, quality and size.
To view guidance issued by BERR to help you comply with the CPRs go to: www.oft.gov.uk