Consumer Protection from Unfair Trading Regulations 2008
Action may also be taken against a supplier which engages in an unfair trading practice as defined under the Consumer Protection from Unfair Trading Regulations 2008. These cover unfair commercial practices which affect the operation of consumer choice, referred to as a ‘transactional decision’ in the regulations. A transactional decision has a broad meaning covering any decision taken by a consumer, whether it is to act or to refrain from acting, concerning whether, how and on what terms:
•to purchase, make payment in whole or in part for, retain or dispose of a product; or
•to exercise a contractual right in relation to a product.
A ‘product’ includes a service and rights and obligations on a trader.1Reg 2(1) CPUT Regs ‘Commercial practice’ is also given wide meaning and includes a trader’s act, omission, course of conduct, representation or commercial communication (eg, advertising and marketing) which is directly connected with the promotion, sale or supply of a product to or from you.2Reg 2(1) CPUT Regs The unfair practice can occur before, during or after the transaction, whether or not the transaction ultimately takes place. Thus, unfair attempts to influence you through marketing and cold-calling and steps that might be taken to stop you exercising your rights can be caught by the regulations. The test of whether a commercial practice is misleading includes whether it contains false information and whether it deceives you into a transaction you would not have otherwise taken.3Reg 5 CPUT Regs This includes the marketing of a product (including comparative advertising) which creates confusion about any products, trademarks, trade names or other distinguishing marks of a competitor. A commercial practice can also be misleading by way of omission if, in its factual context, it omits or hides the commercial practice, omits material information, provides material information in a manner which is unclear, unintelligible, ambiguous or untimely, or fails to identify its commercial intent, unless this is already apparent from the context.4Reg 6 CPUT Regs Importantly, it may also cover the failure by a fuel supplier to comply with a code of conduct if it has indicated that it is bound by the code of conduct, and the breach causes you to enter into a transaction that you otherwise would not have done.
If a trader engages in a commercial practice that is misleading, it is guilty of an offence and may be prosecuted by a local authority’s trading standards department.
In 2012, the Court of Appeal upheld the conviction for an offence under these regulations by SSE.5R (on the application of Surrey Trading Standards) v Scottish and Southern Energy plc [2012] CA, Criminal Division The company was held liable for misleading statements made by a trainee salesperson working for a linked company, Southern Electric Gas Ltd, operating in an area with a considerable population of elderly consumers and which had been designated by the local council as a ‘no cold calling zone’. The Court of Appeal ruled that both companies could potentially have been prosecuted and that SSE fell within the definition of a ‘trader’ under the regulations as Southern Electric Gas Ltd was held by it as a subsidiary company.6R (Surrey Trading Standards) v Scottish and Southern Energy plc [2012] EWCA Crim 539