"IT'S NOT FAIR!"
– becomes law in major shakeup of consumer protection

Monday 26 May saw the introduction of new regulations which have been billed as the biggest change in consumer law for 40 years.  The Consumer Protection from Unfair Trading Regulations 2008 implement new European Union provisions in the UK, and replace various pieces of familiar legislation, including the Trade Descriptions Act.

The regulations contain a blacklist of 31 practices considered unfair to consumers, covering a wide area from advertorials to false "closing down" sales, and including the controversial provision that promotions using the words ‘free’ and ‘gratis’ will no longer be allowed in many situations.  Confusion still surrounds this provision, which would seem to technically ban "buy one get one free" deals and free gifts with purchases, as the UK government has indicated that it does not believe that the new rules will prevent use of "free" in these ways. 

Pester power is also being dealt a blow, as adverts targeting children will also be forbidden where they directly urge children to buy, or to persuade their parents to buy products for them.   Traders falsely representing themselves as a consumer (for example in reviews on eBay), or creating the impression they are not acting in the course of a trade, will also be caught. 

The legislation also introduces for the first time in the UK a general obligation on businesses not to treat consumers unfairly – something which already exists in many other EU states.  

This catch-all provision is supported by rules which ban businesses from providing misleading information or making a misleading omission.   These rules aim to ensure that businesses give consumers the information they need in order to make an informed choice in relation to a product.  In addition, where a commercial communication enables a consumer to make a purchase, for example via a shopping-basket function on a website, traders must provide certain specific information to consumers, unless this is apparent from the context.  Aggressive practices are also prohibited under the regulations.

Enforced by the OFT and Trading Standards Departments, with a role for the Advertising Standards Authority, the possible penalties for not meeting the changes in the law are stiff, including fines and potentially up to two years imprisonment.

Consumer businesses need to look carefully at whether their practices can objectively be deemed to be fair.  We should begin to get a feel for what is and what is not acceptable once the OFT and Trading Standards start to bring their first cases.  In the meantime, our advice is for businesses to review their trading practices and to err on the side of caution, to avoid becoming one of the precedent-setting cases with the associated negative publicity.

Misleading marketing practices affecting businesses, including comparative advertising, will now be regulated under the Business Protection from Misleading Marketing Regulations 2008, which also came into force on 26 May.  These regulations replace the Control of Misleading Advertisements Regulations, although they substantially restate the law in that area.

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