This checklist sets out how a business can comply with its obligations under consumer protection legislation.
Unfair commercial practices
Consumer protection legislation provides a general prohibition on unfair commercial practices.
Misleading acts or omissions
A business must not mislead consumers through acts or omissions. For example:
- A business falsely tells a consumer their boiler cannot be repaired and they will need a new one. This constitutes a misleading action.
- A business sells a satellite television package to a consumer, without indicating that sports channels are only available at an additional subscription cost. This constitutes a misleading omission.
Aggressive commercial practices
Businesses must not subject consumers to aggressive commercial practices (for example, bringing a consumer to a holiday club presentation with no means of getting home unless they sign a contract).
Definitively unfair commercial practices
Consumer protection legislation contains a list of 31 commercial practices that are always unfair. These include:
- Displaying a quality mark without authorisation.
- Falsely claiming to be a signatory to a code of conduct.
- Falsely claiming a product is able to cure illnesses.
Who can take action for a breach?
- A business will commit an offence if it engages in unfair commercial practices.
- The OFT and the Trading Standards Services can take enforcement action against a business if the business breaches consumer protection legislation.
- Penalties include:
- a fine not exceeding the statutory maximum on summary conviction; and
- a fine of up to two years imprisonment or both on indictment.
Unfair terms in consumer contracts
- Consumers can challenge contract terms on the basis that they are unfair.
- Consumer protection legislation applies to any unfair terms in contracts between a consumer and a business selling goods or services.
- A term will be regarded as unfair if it causes a significant imbalance in the parties’ rights and obligations under the contract in favour of the business.
- If a term is unfair, then it is not binding on a consumer, although the remainder of the contract will continue in force if it is capable of doing so.
- When deciding whether a term is unfair, a court will take into account:
- the type of goods and services being provided;
- the circumstances surrounding the conclusion of the contract; and
- all the terms of the contract, or of another contract on which it depends.
Potentially unfair terms in consumer contracts
Consumer protection legislation provides a non-exhaustive list of potentially unfair terms. The types of terms identified are those that, in effect, are trying to achieve the following:
- Make a consumer pay an unfair penalty.
- Mislead a consumer about his legal rights, or mislead him about the contract.
- Deny a consumer full redress.
- Tie a consumer into a contract unfairly.
- Allow a business to not perform its obligations.
- Not allow a consumer to recover his prepayments on cancellation.
- Allow a business to vary the terms after the contract has been agreed.
If you have any queries about the content of this checklist, please contact Catherine Drew