The new regulations replace many existing laws, including most of the Trade Descriptions Act, so they are certainly worth a read. Among perennial bad practices predictably banned are “bait and switch” - offering one thing then actually providing another, claiming to belong to a trade association when you don’t, and pyramid selling. So most of it is common sense.
But there are some more surprising additions to the list of shame. Now banned are advertorial (paying for favourable press stories without making this clear to readers), fake blogging (pretending to be an ordinary consumer giving an independent opinion in an online web site or forum when you in fact stand to make a financial gain) and “astroturfing” - generating a fake grass-roots buzz around your product or service by paying people to pretend to be satisfied customers or supporters.
Since many of the latter practices have become fairly common in the media, on the Internet and among fans of so-called guerrilla marketing, it is likely that court cases may be necessary to define what exactly is permissible and what is not. For example it’s not yet clear whether the sort of affiliate marketing deal popular on the Internet will be caught under these regulations - for example recommending books in return for a commission on any sales that ensue
Since in many instances the offence lies in the deception or misleading of the customer, you can probably stay on the right side of the law by declaring what you are up to. If you have a financial interest in a transaction that isn’t obvious to the consumer, you can probably make everything clear and above board with some kind of declaration. Here’s a PRIME example - from our ONLY foray into affiliate marketing!
Here are the Top 31 “Commercial practices which are in all circumstances considered unfair” according to the new rules.
1. Claiming to be a signatory to a code of conduct when the trader is not.
2. Displaying a trust mark, quality mark or equivalent without having obtained the necessary authorisation.
3. Claiming that a code of conduct has an endorsement from a public or other body which it does not have.
4. Claiming that a trader (including his commercial practices) or a product has been approved, endorsed or authorised by a public or private body when the trader, the commercial practices or the product have not or making such a claim without complying with the terms of the approval, endorsement or authorisation.
5. 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 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 (bait advertising).
6. Making an invitation to purchase products at a specified price and then—
(a) refusing to show the advertised item to consumers,
(b) refusing to take orders for it or deliver it within a reasonable time, or
(c) demonstrating a defective sample of it,
with the intention of promoting a different product (bait and switch).
7. Falsely stating 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.
8. Undertaking to provide after-sales service to consumers with whom the trader has communicated prior to a transaction in a language which is not an official language of the EEA 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 transaction.
9. Stating or otherwise creating the impression that a product can legally be sold when it cannot.
10. Presenting rights given to consumers in law as a distinctive feature of the trader’s offer.
11. Using editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable by the consumer (advertorial).
12. Making a materially inaccurate claim concerning the nature and extent of the risk to the personal security of the consumer or his family if the consumer does not purchase the product.
13. 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 that same manufacturer when it is not.
14. 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.
15. Claiming that the trader is about to cease trading or move premises when he is not.
16. Claiming that products are able to facilitate winning in games of chance.
17. Falsely claiming that a product is able to cure illnesses, dysfunction or malformations.
18. 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.
19. Claiming in a commercial practice to offer a competition or prize promotion without awarding the prizes described or a reasonable equivalent.
20. Describing a product as ‘gratis’, ‘free’, ‘without 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.
21. Including in marketing material an invoice or similar document seeking payment which gives the consumer the impression that he has already ordered the marketed product when he has not.
22. Falsely claiming or creating the impression that the trader is not acting for purposes relating to his trade, business, craft or profession, or falsely representing oneself as a consumer.
23. Creating the false impression that after-sales service in relation to a product is available in an EEA State other than the one in which the product is sold.
24. Creating the impression that the consumer cannot leave the premises until a contract is formed.
25. Conducting personal visits to the consumer’s home ignoring the consumer’s request to leave or not to return, except in circumstances and to the extent justified to enforce a contractual obligation.
26. Making persistent and unwanted solicitations by telephone, fax, e-mail or other remote media except in circumstances and to the extent justified to enforce a contractual obligation.
27. Requiring a consumer who wishes to claim on an insurance policy to produce documents which could not 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 contractual rights.
28. 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.
29. 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 (inertia selling)(11).
30. Explicitly informing a consumer that if he does not buy the product or service, the trader’s job or livelihood will be in jeopardy.
31. Creating the false impression that 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—
(a) there is no prize or other equivalent benefit, or
(b) taking any action in relation to claiming the prize or other equivalent benefit is subject to the consumer paying money or incurring a cost.
Source: SCHEDULE 1, The Consumer Protection from Unfair Trading Regulations 2008
© Crown copyright 2008. Full text available on the link above.
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More than half of the visitors to this site taking part in a recent PRIME mini poll expect to sell their business as a going concern when they are ready to exit the business. A further 16 per cent also expect to keep it going, giving it to family or a friend.
Quietly coming into effect at the end of May, the Consumer Protection from Unfair Trading Regulations 2008 summarises in one place most of the things you are not allowed to do when selling to consumers. The parallel Business Protection from Misleading Marketing Regulations 2008 does the same thing for businesses selling to other businesses (B2B).
Tax expert Penny Bates comments on the BBC site
