May 22, 2008

Unfair Trading Regulations

by Brian Turner

Unfair Trading Regulations

This week the government sent out leaflets to UK businesses outlining the impact of the recent Consumer Protection from Unfair Trading Regulations.

In their wisdom, the government has only provided PDF coverage online, so I’ll cover the main pointers below:

Practices banned outright

Abuse of the following can result in enforcement by Trading Standards:

Falsely Claiming Accreditation

1. Faking credentials - claiming to be a signatory to a code of conduct when the trader is not

2. You’re not who you say you are - displaying a trust mark, quality mark, or equivalent, without the necessary authorisation

3. Your endorsement is not real - claiming that a code of conduct has an endorsement from a public or other body which it does not have

4. Not being true to the terms of the endorsement - claiming that a trader or product has been approved, endorsed, or authorised by a public or private body, without complying with the terms of the approval, endorsement, or authorisation.

Pricing and product/service information

5. Special offer not in stock – making an invitation to purchase products at a specified price, without disclosing the existence of any reasonable grounds the trader may have for believing that he/she will not be able to offer for supply or to procure another trader to supply, those products or equivalent products at that price for a period that is, and in quantities that are, reasonable having regard to the product, the scale of advertising of the product and the price offered. This is known as bait advertising.

6. Limited time only - falsely claiming 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.

7. Illegally selling goods – stating or otherwise creating the impression that a product can be legally sold when it cannot

8. It’s not right - presenting rights given to consumers in law as a distinctive feature of the trader’s offer

9. Over promise, under deliver – falsely claiming that a product is able to cure illnesses, disfunction or malformations.

10 Promoting a product you don’t want to sell – ie, inviting a purchase then:

- refusing to show the advertised item to consumers, or
- refusing to take orders for it or deliver it within a reasonable time, or
- demonstrating a defective sample, with the intention of promoting a different product (known as bait and switch)

11. Scare tactics – making inaccurate claims on the nature and risk to personal security of the consumer or his or her family if the consumer does not purchase the product now

12. Creating extra paperwork - requiring a consumer who wishes to claim on an insurance policy to produce documents which could not be reasonably be considered relevant as to whether the claim was valid, or failing systematically to respond to pertinent correspondence, in order to dissuade a consumer from exercising his/her contractual rights

Promotional Activities

13. Being honest about advertorials – using editorial content in the media to promote a product where the trader has paid for the promotion (advertorial) without making that clear in the content or by images or sounds clearly identifiable by the consumer.

14. Faking goods – promoting a product similar to a product made by a particular manufacturer, in such a manner as deliberately to mislead the consumer into believing that the product is made by the same manufacturer when it is not.

15. Closing down sale - claiming that the trader is about to cease trading or move premises when he/she is not.

16. Pulling the wool over their eyes – passing on materially inaccurate information on market conditions or on the possibility of finding the product with the intention of inducing the consumer to acquire the product at conditions less favourable than normal market conditions.

17. Forcing the deal - including in marketing material an invoice or similar document seeking payment which gives the consumer the impression that he/she has already ordered the marketed product when he/she has not.

18. A wolf in sheep’s clothing – falsely claiming or creating the impression that the trader is not acting for purposes relating to his/her trade, business, craft, or profession, or falsely representing oneself as a consumer.

19. Advertising to children - including in an advertisement a direct exhortation to children to buy advertised products, or persuade their parents or other adults to buy advertised products for them.

Competitions and prize draws

20. Pyramid scheme - establishing, operating or promoting a pyramid promotional scheme where a consumer gives consideration for the opportunity to receive compensation that is derived primarily from the introduction of other consumers into the scheme, rather than from the sale or consumption of products.

21. You can’t promise a win – claiming that products are able to facilitate winning in games of chance.

22. Winner takes nothing - claiming in a commercial practice to offer a competition or prize promotion without awarding the prizes described or a reasonable equivalent.

23. Is it truly free? – describing a product as “gratis”, “free”, “ithout charge” or similar if the consumer has to pay anything other than the unavoidable cost of responding to the commercial practice and collecting or paying for delivery of the item.

24. No win situations - creating the false impression the the consumer has already won, will win, or will on doing a particular act win, a prize or other equivalent benefit, when in fact either:

- there is no prize or equivalent benefit, or
- taking any action in relation to claiming the prize or other equivalent benefit is subject to the consumer paying money or incurring a cost

Sales and After-sales service

25. Forcing the sale - Creating the impression that the consumer cannot leave the premises until a contract is formed.

26. Overstaying your welcome – conducting personal visits to the consumer’s home and ignoring the consumer’s request to leave or not to return, except in circumstances and to the extent justified, under national law, to enforce a contractual obligation.

27. Pestering the consumer - making persistent and unwatned solicitations by telephone, fax, email, or other remote media except in circumstances and to the extent justified under national law to enforce a contractual obligation.

28. Using guilt to make sales – explicitly informing the consumer that if he or she does bot buy the product or service, the trader’s job or livelihood will be in jeopardy.

29. Asking for payment when they didn’t ask for the product - demanding immediate or deferred payment for, or the return or safekeeping of products supplied by the trader, but not solicited by the consumer except where the product is a substitute supplied in accordance with regulation 19(7) of the Consumer Protection (distance selling) Regulations 2000 (this is known as inertia selling).

30. Talking the same language – undertaking to provide after-sales service to consumers with whom the trader has communicated prior to the transaction in a language which is not an official language of the European Member State where the trader is located, and then making such service available only in another language without clearly disclosing this to the consumer before the consumer is committed to the transation.

31. Misleading after-sales information – creating the false impression that after-sales service in relation to a product is available in a European Member State other than the one in which a product was sold.

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