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Consumer Redress for Misleading and Aggressive Practices
Status: This project is open for consultation until 12 July 2011
On 12 April 2011 we published a consultation paper, Consumer Redress for Misleading and Aggressive Practices, in which we make proposals for reform and ask questions. We also published a Summary setting out the key issues.
This is a joint project with the Scottish Law Commission.
(This project was formerly referred to as Misrepresentations and Unfair Commercial Practices.)
How to Respond: we invite responses from all members of the public. We have created forms to make it easier to provide a response (although we welcome responses in other formats). Two forms are available:
Once our consultation period closes we will analyse responses and produce a final report by March 2012.
The problem and developments to date
Consumer groups argue that misleading and aggressive commercial practices are a major problem. Consumer Focus commissioned research which found that almost two-thirds of the population had fallen victim to a misleading or aggressive practice within the last two years, causing an estimated consumer detriment of £3.3 billion a year. A disproportionate number of these consumers are among the most vulnerable members of society, including the elderly and disabled. Abuses in the mobility aids market provide a vivid illustration of the problems involved. In addition aggressive and misleading selling undermines legitimate traders and can damage the reputation of an entire market.
In May 2008, the Consumer Protection from Unfair Trading Regulations implemented the Unfair Commercial Practices Directive into UK law. They provide that businesses trading with consumers must not use “unfair commercial practices”. The Regulations prohibit misleading actions, misleading omissions and aggressive commercial practices and cover many of the practices consumers complain about. The Regulations can, however, only be enforced by the OFT and trading standards. Consumers who are victims of an unfair commercial practice cannot bring claims for compensation under the Regulations.
Consumers have to rely on private law rights. Our review of the current private law in this area has found it is fragmented, complex and unclear. The people dealing with these issues are often not lawyers. Consumers and businesses may prefer to settle the disputes themselves, or with the help of non-legal advisers, or alternatively trading standards officers may be involved. The law needs to be clear and simple in order to be effective.
The project
Our project aims to provide a simpler, clearer, and more cohesive framework for consumer protection from misleading and aggressive commercial practices. Our proposals cover three key areas
Our Consultation Paper and Summary set out our proposals and ask questions. We invite the public to respond. As noted above, please send us your views by 12 July 2011.
Previous work
In July 2008, the Department for Business, Enterprise and Regulatory Reform (BERR) asked the Law Commission to give it preliminary advice on the issues which would be raised by providing consumers with a new private right of redress for unfair commercial practices under the Regulations. We sent our preliminary advice to BERR in November 2008.
In February 2010 we started our current, larger project and produced a short paper outlining the current legal framework and some of the difficulties that exist. Between March and September 2010, we held a series of preliminary meetings with stakeholders to discuss problems raised by unfair commercial practices. We have set out our key findings from these meetings in our Feedback from Stakeholders.
Update on the Australian Consumer Law: in Part 11 of our Consultation Paper we refer to the Trade Practices Act 1974 which has been amended and renamed the Competition and Consumer Act 2010. For more information see the Australian Government’s website.
Status: This project is open for consultation until 12 July 2011
On 12 April 2011 we published a consultation paper, Consumer Redress for Misleading and Aggressive Practices, in which we make proposals for reform and ask questions. We also published a Summary setting out the key issues.
This is a joint project with the Scottish Law Commission.
(This project was formerly referred to as Misrepresentations and Unfair Commercial Practices.)
How to Respond: we invite responses from all members of the public. We have created forms to make it easier to provide a response (although we welcome responses in other formats). Two forms are available:
- a summary response form, with a shorter set of questions for consultees who have only read the summary; and
- a full response form, for consultees who have read the Consultation Paper as a whole and wish to comment on our full set of proposals.
Once our consultation period closes we will analyse responses and produce a final report by March 2012.
The problem and developments to date
Consumer groups argue that misleading and aggressive commercial practices are a major problem. Consumer Focus commissioned research which found that almost two-thirds of the population had fallen victim to a misleading or aggressive practice within the last two years, causing an estimated consumer detriment of £3.3 billion a year. A disproportionate number of these consumers are among the most vulnerable members of society, including the elderly and disabled. Abuses in the mobility aids market provide a vivid illustration of the problems involved. In addition aggressive and misleading selling undermines legitimate traders and can damage the reputation of an entire market.
In May 2008, the Consumer Protection from Unfair Trading Regulations implemented the Unfair Commercial Practices Directive into UK law. They provide that businesses trading with consumers must not use “unfair commercial practices”. The Regulations prohibit misleading actions, misleading omissions and aggressive commercial practices and cover many of the practices consumers complain about. The Regulations can, however, only be enforced by the OFT and trading standards. Consumers who are victims of an unfair commercial practice cannot bring claims for compensation under the Regulations.
Consumers have to rely on private law rights. Our review of the current private law in this area has found it is fragmented, complex and unclear. The people dealing with these issues are often not lawyers. Consumers and businesses may prefer to settle the disputes themselves, or with the help of non-legal advisers, or alternatively trading standards officers may be involved. The law needs to be clear and simple in order to be effective.
The project
Our project aims to provide a simpler, clearer, and more cohesive framework for consumer protection from misleading and aggressive commercial practices. Our proposals cover three key areas
- Misleading practices. The law of misrepresentation provides a potential remedy in many cases, but the law is fragmented, complex and unclear.
- Aggressive practices (such as high pressure sales techniques). The current law is ill-suited to consumer disputes and leaves significant gaps in protection. Aggressive debt collection was highlighted as a particular problem.
- A new scheme of consumer remedies. Consumer groups told us that consumers usually prefer a refund, and the ability to “unwind” the transaction. The current law usually allows this in principle but in practice, the right has complicated conditions and exceptions.
Our Consultation Paper and Summary set out our proposals and ask questions. We invite the public to respond. As noted above, please send us your views by 12 July 2011.
Previous work
In July 2008, the Department for Business, Enterprise and Regulatory Reform (BERR) asked the Law Commission to give it preliminary advice on the issues which would be raised by providing consumers with a new private right of redress for unfair commercial practices under the Regulations. We sent our preliminary advice to BERR in November 2008.
In February 2010 we started our current, larger project and produced a short paper outlining the current legal framework and some of the difficulties that exist. Between March and September 2010, we held a series of preliminary meetings with stakeholders to discuss problems raised by unfair commercial practices. We have set out our key findings from these meetings in our Feedback from Stakeholders.
Update on the Australian Consumer Law: in Part 11 of our Consultation Paper we refer to the Trade Practices Act 1974 which has been amended and renamed the Competition and Consumer Act 2010. For more information see the Australian Government’s website.
- Consumer Redress for Misleading and Aggressive Practices Consultation [PDF, 2.97mb]
- Consumer Redress Consultation Summary [PDF, 2.35mb]
- Consumer Redress Consultation Full Response Form [PDF, 0.16mb] - For consultees who have read the consultation paper as a whole and wish to comment on our full set of proposals
- Consumer Redress Consultation Summary Response Form [PDF, 0.09mb] - A shorter set of questions for consultees who have read only the summary
- Consumer Redress Impact Assessment [PDF, 0.24mb]
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