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 a 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 misleading commercial practice, 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 (Surrey Trading Standards) v Scottish and Southern Energy plc [2012] EWCA Crim 539 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 Digital Markets, Competition and Consumers Act 2024
The Digital Markets, Competition and Consumers Act 2024 aims to improve information transparency for consumers. Areas covered by the Act include the following.
– The display of pricing information, including the consistent use of unit pricing to allow for easy price comparison between products.
– Restricting hidden fees and drip-pricing practices, whereby consumers are initially enticed with low prices, but fees are increased as they progress through the purchasing process.
– New standards requiring online platforms to act with professional diligence in their dealings with consumers, particularly with e-commerce material on social media.
– Private rights of redress against traders will be extended to cover unfair commercial practices such as misleading omissions or breaches of professional diligence by traders but these will apply to situations ‘involving gas and electricity only if they are put up for sale in a limited volume or set quantity’.7Cl 247 Digital Markets, Competition and Consumers Bill, February 2024 – Provisions for alternative dispute resolution to court will be available to consumers.
Many details will be filled by way of regulation. An additional development is that the Competition and Markets Authority is given powers to enforce provisions which may, in some instances, be additional or beyond the scope of actions available through Ofgem.