Tue 15th Aug 2017
What unfair commercial practices are prohibited in UK consumer marketing?
Are you aware of the unfair commercial practices which are prohibited in UK consumer marketing? James Cornish, chartered trade mark attorney at Page White and Farrer explains.
There is a general prohibition on unfair commercial practices which do not meet the standard of professional diligence (ie the standard of skill and care that a trader in the relevant field would reasonably be expected to exercise) and which materially distort the economic behaviour of the average consumer of the product. This is a general ‘safety net’ to deal with unfair commercial practices that are not caught by the other rules listed below.
A commercial practice is also unfair if it is a misleading action or omission. For example, it contains false information, has a deceptive overall presentation or it creates confusion between competitor’s trademarks or products.
The false information should relate to the existence or nature of the product, the extent of the trader’s commitments, motives for the commercial practice, nature of the sales process, indications of sponsorship or approval, the price or calculation of the price, specific price advantages, the need for repair, the nature, attributes and rights of the trader, the consumer’s rights or the main characteristics of the product.
The main characteristics of the product, include availability, benefits, risks, execution, composition, accessories, after-sales customer assistance, complaint handling, manufacture, provision, delivery, fitness for purpose, usage, quantity, specification, geographical or commercial origin, results to be expected from use or results of tests.
A misleading omission can include omitting, hiding or obscuring material information.
To be actionable as a misleading action or omission, it must cause, or be likely to cause, the average consumer to take a transactional decision they would not have taken otherwise.
Misleading actions could include:
- falsely saying that appliances needed replacement as they were unrepairable;
- selling electronics equipment without indicating that certain key television channels were only available at an additional subscription cost; and
- falsely indicating the number of bedrooms during a house sale.
Commercial practices are also unfair if they are aggressive because they significantly impair, or are likely to significantly impair, the average consumer’s freedom of choice or conduct through the use of harassment, coercion, or undue influence and they cause, or are likely to cause, the consumer to take a transactional decision they would not have taken otherwise. This might relate to language, behaviour, exploiting personal circumstances, imposing onerous or disproportionate non-contractual barriers or threatening to take action that cannot legally be taken.
Aggressive practices could include funeral companies pressurising the bereaved to buy expensive coffins to avoid bringing shame on a family.
Commercial practices are also unfair, if they are one of the 31 prohibited activities. To read this article, click here.
What are the penalties for consumer sales?
Penalties can include a fine or imprisonment. There are certain defences available as with business to business marketing. Trading Standards has a duty to enforce the regulations and certain powers to do so. They may use the ASA and others to help in enforcement, and may opt to educate and advise, rather than punish.
The criminal offences have strict liability and therefore the state of the mind of the trader does not have to be proved. However, in the case of the general prohibition on unfair commercial practices (“A” above), it is necessary to prove the trader has knowingly or recklessly breached the requirements of professional diligence.
Any other remedies for consumer remedies?
Consumers are given rights of redress, provided they have entered into a contract. The misleading action must have been a significant factor and misleading omissions do not give rights of redress. The rights of redress would be enforced through the civil courts.
In summary, care is needed to ensure, and particularly in consumer related transactions, that there is no unfair trading when promoting and selling your branded products, as the penalties can include imprisonment.
For advice on brand protection and trade marks in the UK, Europe and internationally, please contact James Cornish on 44 (0) 207 831 7929 or email firstname.lastname@example.org.