CA investigates: New laws to give consumers better protection

On 26 May 2008 the Consumer Protection from Unfair Trading Regulations (CPRs) 2007 will implement the European Union Unfair Commercial Practices Directive (UCP) into UK law. It still needs approval in Parliament, but is being hailed as the biggest change to consumer legislation in the last 40 years.

The regulations will outlaw unfair and aggressive selling techniques, including harassment, misinforming or misleading people about products or services, such as failing to disclose important information. The intention is to close loopholes previously exploited by rogue traders.

Because it is an EU-wide set of laws, it is hoped the consumer protection regulations will create more confidence in buying goods from traders in EU member states. Those who fall foul of the new regulations will face tough sanctions if found guilty, including heavy fines and even imprisonment.

Legislation shake-up
The UCP Directive will go further than any previous legislation by banning some practices and shaking up or totally replacing other consumer rights law. Its roots lie in the desire to harmonise European consumer rights protection. With the growth in cross-border trading thanks to the internet, the EU realised that consumer rights needed to be clearer and stronger.

On 18 June 2003, the European Commission adopted a proposal for a directive on unfair commercial practices. Out of this, a series of common laws and principles was developed to give consumers the same protection against dubious business practices and rogue traders – whether they buy from a corner shop or a website in another country. It was meant to come into force in the UK on 6 April this year.

However, the Government has put this date back to 26 May because of protests from businesses that claimed they were not ready.

The changes and you
So how will it affect you and what changes will you see? Don’t worry if you have just got to grips with laws such as the Sale and Supply of Goods and Services Act and the Distance Selling Regulations; these remain in place because the new regulations mainly deal with how traders sell goods to consumers.

An unfair commercial practice is one that is not professionally diligent and that distorts the consumer’s behaviour – they buy something they wouldn’t have normally, for example. Misleading and aggressive practices are those that again would cause the consumer to make a different buying decision. The law applies before, during and after a contract is made.

To outlaw these practices, some 23 laws will be repealed or amended. These include most of the Trade Descriptions Act, the Consumer Credit Act 1974 and Part III of the Consumer Protection Act 1987. The latter law deals with prices, so traders can’t mislead consumers about the price of goods or services.

And in case any psychics didn’t see it coming – it replaces The Fraudulent Mediums Act with stronger measures. The directive will ban outright 31 types of unfair commercial practice, such as certain sales techniques, advertising methods, competitions and failures to deal with requests from customers about future contact.

Among those outlawed are ‘bait’ advertising – for example, when a company advertises cameras for £3 but only has a small number to sell and doesn’t make this clear. It will be illegal to falsely state that a product will only be available for a very short time in order to elicit an immediate sale, as well as to make persistent unwanted solicitations by phone, fax or email.

Describing a product as ‘free’ when the consumer has to pay anything more than the cost of delivery has also been banned. In addition, dubious prize draw-style competitions have been dealt a blow. It will be illegal to create the false impression that the consumer has won or will, on doing a particular act, win a prize or other equivalent benefit when in fact there is either no prize or other equivalent benefit.