The 'Directive'

In 2005 the European Parliament and Council adopted a directive (the “Directive”) intended to protect consumers from unfair, misleading and aggressive commercial practices. Regulations implementing the Directive in the UK are expected to be published in draft later this month and to come into force by April 2008.

• A “commercial practice” for the purposes of the Directive is any activity linked to a promotion, sale or supply of products to consumers.
• A practice is “unfair” if it is contrary to the requirement of professional diligence and/or it materially distorts or is likely materially to distort the average consumer’s economic behaviour.
• 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.
• 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.
• 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.
• In addition, there are 31 examples of “blacklisted” practices which will be automatically regarded as unfair without having to apply the “average consumer” test.
• Blacklisted 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.
• giving the impressions that the consumer cannot leave the trader’s premises until a contract is formed; and
• 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 http://www.dti.gov.uk/consumers/buying-selling/ucp/index.html

May 2007