As part of a wider overhaul of consumer protection laws, the Department for Business, Innovation & Skills ("BIS") has published draft Regulations to amend the Consumer Protection from Unfair Trading Regulations 2008 ("CPRs"). The Draft Consumer Protection from Unfair Trading (Amendment) Regulations 2013 ("Regulations") propose to introduce a right for consumers to seek compensation from traders who breach the CPRs.
Brought into force in 2008, the CPRs regulate commercial practices to protect consumers against unfair, misleading and aggressive selling practices by traders.
The CPRs contain a general prohibition on the use of "unfair commercial practices" by traders, which cover all practices that fail to meet the professional standard expected of a trader in the relevant field and which affect the consumer's ability to make an informed decision, causing him to make a decision he would not otherwise have made. The CPRs also prohibit misleading actions and omissions (such as providing misleading information about a product, or marketing a product in a way that creates confusion with a competitor's product) and ban the use of aggressive practices by traders, such as the use of harassment, coercion, or undue influence. In addition, there is a "black list" of 31 specific practices that will in all cases be deemed unfair.
The impact of the CPRs is significant; both in their scope and in the potential consequences for traders who fail to comply. The CPRs apply to every kind of business-to-consumer transaction, both before during and after the contract is made, and a trader in breach of the CPRs can face an unlimited fine and/or a prison sentence.
However, even though the criminal sanctions for unscrupulous traders are potentially heavy, until now the CPRs could only be enforced by the OFT or Trading Standards and there has been no right for consumers affected by a breach to bring a claim for compensation against traders. The new amendments propose to close this gap by providing consumers with a direct remedy against businesses who engage in unfair commercial practices. Depending on the circumstances, remedies available to the consumer will include the right to have the contract unwound and to receive a refund, to receive a discount and/or to claim damages.
In addition, the Regulations will extend the scope of the CPRs to cover misleading and aggressive demands for payment which are not associated with the supply of goods or services. This may include, for example, debt collection agencies, private car clampers or demands for civil recovery payments from alleged shoplifters. Whereas previously these payments were considered to fall outside the CPRs as they did not appear to come within the definition of "commercial practices", the Regulations extend the definition to make it clear that such payments will now be within the scope of the CPRs and will be subject to the same rules as other commercial practices.
The new Regulations will strengthen protection for consumers under the CPRs, making it easier for consumers to take action against unscrupulous traders. For most businesses, who trade fairly and honestly, the new Regulations will not be a cause for concern, however all businesses should take the opportunity to review their practices to ensure that they don't fall within any of the prohibitions under the CPRs.
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