EU Directive on Unfair Commercial Practices

The European Parliament and Council has recently adopted a new directive (the “Directive”) banning misleading and aggressive commercial practices which are unfair to consumers.  The Directive must be implemented in the UK by 12 June 2007.

• A practice is misleading if, as a result of that practice, the “average consumer” is or is likely to be deceived into entering into a transaction which he would not otherwise have entered into.
• The “average consumer”:
• is one who is “reasonably well informed and reasonably observant and circumspect”;
• must be judged in relation to the relevant target market, for example children.
• Specific examples of misleading practices include:
• displaying a trust mark, quality mark or equivalent without having obtained the necessary authorisation;
• claiming to offer a competition or prize promotion without awarding the prizes described or an equivalent;
• claiming that the trader is about to cease trading or move premises when he is not.
• A practice is “aggressive” if by harassment, coercion or undue influence, it significantly impairs or is likely significantly to impair the average consumer’s freedom of choice, causing him to enter into a transaction which he would not otherwise have entered into.
• Specific examples of aggressive practices include:
• giving the impressions that the consumer cannot leave the trader’s premises until a contract is formed;
• explicitly informing a consumer that if he does not buy the product or service, the trader’s job or livelihood will be in jeopardy.
• Action:
• Read the DTI guidance on the Directive at www.dti.gov.uk/ccp/topics1/unfair.htm

November 2005