May 2008 saw the implementation in the UK of the Unfair Commercial Practices Directive (the Directive) by the introduction of the Consumer Protection from Unfair Trading Regulations 2007 (the Regulations), which will result in changes to the existing UK consumer protection laws.

The Directive applies to business practices (i.e. not private transactions) that affect consumers. It aims to harmonise unfair trading laws in all EU Member States, and contains a general ban on unfair commercial practices that distort the economic behaviour of the typical consumer. It also prohibits misleading and aggressive practices that are likely to deceive the average consumer, and lists more than 30 specific practices that are banned in all circumstances – for example, displaying a trust mark, quality mark or equivalent without having obtained the necessary authorisation. It applies to actions, omissions and other conduct directly connected to the promotion, sale or supply of products or services to or from consumers.

Infringement or contravention of the Regulations may lead to civil, and possibly also criminal, penalties, and the burden of proof will depend on which prohibition has been breached. The general prohibition will require the prosecution to prove that the trader has knowingly or recklessly breached the requirements of diligence. A breach of the remaining prohibitions will be strict liability crimes, as the fact that the Regulations have been breached is enough. The duty of enforcement will fall on the OFT and Trading Standards Officers, and breaches will subject the offending businesses to a potential unlimited fine or imprisonment of up to two years.

In summary, the Regulations will simplify and plug gaps in existing UK consumer protection legislation. They should also protect the consumer and benefit honest businesses yet target unscrupulous and dishonest traders. It is therefore important that all businesses review their business practices thoroughly to ensure that what they do (and what they don’t do) complies with the law.