TRADERS TREAD CAREFULLY!
The 26th of May 2008 saw one of the most significant changes to consumer protection law in the last 40 years.
The introduction of the ‘Consumer Protection From Unfair Trading Regulations 2008’ will benefit both businesses and consumers alike through the prohibition of certain trading practices, which although not previously considered unlawful were regarded as unfair.
As well as providing additional protection to the public, businesses that have previously suffered unfair competition at the hands of unscrupulous traders are likely to benefit from these changes by eliminating unfair competition.
The two main pieces of legislation that the new regulations will replace and which owners of businesses may be familiar with are the Trade Descriptions Act 1968 and the Consumer Protection Act 1987.
The new law imposes upon all organizations trading with consumers, a general duty not to trade unfairly. The duty applies to any business whether it be a limited company, partnership or sole trader and will include retailers, builders and motor traders amongst others. Irrespective of whether there is direct contact with the customer, whether the sale takes place through an agent, is face to face or online: if goods or services are sold to a member of the public, the regulations are likely to apply.
In addition to imposing a general duty, a number of specific practices that were previously considered deceptive or intimidating have been outlawed. These include bogus closing down sales, persistent and unwanted sales calls, and prize draw scams requiring participants to use premium rate phone numbers.
In the same way that the Trades Descriptions Act created offences for traders who applied false descriptions to their products, these new Unfair Trading Regulations create a number of specific prohibitions which in turn can create criminal liability on the part of the trader. These include the making of misleading statements in respect of matters such as the characteristics of goods or services being sold; the price; consumers’ rights; or the risks associated with buying the product.
At the same time, if a trader omits or hides material information in relation to the product or if the information provided is unclear, unintelligible or ambiguous, where this has caused the customer to make a purchase he might not otherwise have made, an offence may occur.
To the relief of some, aggressive sales practices and high-pressure sales techniques that use harassment or coercion to force a sale have been outlawed.
The Regulations list some 31 practices, which are automatically deemed to be unfair. These include situations where limited sales offers are made to pressurize the consumer into an immediate purchasing decision, offering goods at a price and in quantities that the trader does not have reasonable grounds to believe can be delivered, publicising closing down sales when there is no intention to close down at all and displaying Quality Kite Marks that a trader does not have.
The new Regulations will be enforced by the Office of Fair Trading and local Trading Standards Departments who will have power to investigate compliance, make test purchases and enter traders’ premises with and without warrants.
In addition to having the ability to obtain injunctions to stop unlawful practices, criminal sanctions can apply which could include fines of up to £5,000 for prosecutions in the Magistrates Courts, and unlimited fines with 2-years imprisonment for prosecutions in the Crown Court.
Where criminal prosecutions are brought, they can be against limited companies and, in certain circumstances, individuals within the management of those organisations.
Although these changes are far reaching, honest businesses need have nothing to fear and a business that is trading fairly has no new significant burdens imposed upon it providing it is acting honestly, in good faith, and with professional diligence. For anyone falling foul of the regulations however, the cost of that last sale could be a high one!
For further information please contact Lucy Tarrant, Partner at Mayo Wynne Baxter on 01273 775533 or email ltarrant@mayowynnebaxter.co.uk
About the Author: Jo-Rosie is a professional journalist representing Mayo Wynne Baxter. Mayo Wynne Baxter LLP was formed in 2007 with the merger of Mayo & Perkins and Wynne Baxter. Combining the two practices has made the new firm one of the leading practices in the South East, employing around 250 staff across its seven offices in Sussex, Kent and Surrey. Find out more at: http://www.mayowynnebaxter.co.uk/
More articles by libby
Print Article | Download PDF | 24 views | Aug 21 2008
|
|
