The Consumer Protection from Unfair Trading Regulations 2008 (CPUT) regulates what commercial practices by a trader towards a consumer should be considered as unfair. New civil redress for consumer provisions were introduced into the CPUT in 2014, along with updating certain defined terms to synchronise with other consumer protection law by the Consumer Protection (Amendment) Regulations 2014.
The CPUT applies to commercial practices during the entire lifetime of a consumer to trader transaction. This includes advertising, marketing, entry into the contract, performance, and enforcement. It prohibits misleading actions (Regulation 5), misleading omissions (Regulation 6), aggressive practices (Regulation 7), and commercial practices that contravene professional diligence (General prohibition, Regulation 3(3)). The CPUT also contains a list of 31 blacklisted unfair practices (Schedule 1). It gives consumer claims for civil redress regarding certain breaches, including rights to a refund. It primarily deals with business to consumer practices but can also deal with business to business practices that could affect consumers or, a trader buying a product from a consumer.
A commercial practice is defined as ‘any act, omission, course of conduct, representation or commercial communication (includes 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’ (Regulation 2(1)).
There are three types of misleading actions that the CPUT states. These are:
- A false or misleading practice. This is false information or an overall impression that deceives or is likely to deceive the average consumer, about: The existence or nature of the product, main characteristics of the product, the extent of the traders commitments, the price, the need for a service, part or repair, the nature, attributes and rights of the trader, the consumers rights, and the risks the consumer may face. The deceptive or false information must also cause or be likely to cause the consumer to take a transactional decision they may not have otherwise taken.
- A confusing comparison with a product from a competitor. This covers any marketing of a product which (includes comparative advertising) creates confusion with any products, trade marks, trade names or other distinguishing marks of a competitor. (note: comparative advertising is also governed by the Misleading and Comparative Advertising Directive 2006 and trade mark law)
- A failure to comply with a code of conduct. This must be a code the trader has accepted to comply with.
Under the CPUT a commercial practice is a misleading omission if it:
- Omits or hides material information.
- Gives material information in an unclear, unintelligible, ambiguous, or untimely way.
- Fails to identify its commercial intent unless this is already obvious from the context.
Material information is the information that the average consumer needs to make an informed transactional decision and any information requirement imposed by a European Union (EU) obligation.
A commercial practice is aggressive if the average consumers freedom to choose is influenced by harassment, coercion, or undue influence which leads them take a transactional decision they would not otherwise have made. Coercion includes the use of physical force. Undue influence is exploiting a position of power in relation to the consumer which applies pressure, even without using or threatening to use physical force.
A commercial practice is unfair if it fulfils the following two conditions:
- It contravenes the requirements of professional diligence. Professional diligence is the standard of special skill and care which a trader may reasonably be expected to exercise towards a consumer.
- It results in a material distortion of the economic behaviour of the average consumer in relation to a product or is likely to do so. Material distortion is when the consumers ability to make an informed decision is impaired so that they make a decision they would not otherwise have made.
The general prohibitions allow enforcers to take action against unfair commercial practices that do not fall under misleading, aggressive, or specifically banned practices making it future proof.
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