When the Consumer Protection from Unfair Trading Regulations 2008 (“CPUT”) came into force in May 2008, they represented the biggest change in consumer law in the UK for 40 years and in one go swept away the well-trodden path made by previous legislation. Recent cases have demonstrated that CPUT is still very much at the forefront of regulatory enforcement and that any business would be well advised to review their practices carefully.
What is CPUT and why is it important?
In essence, CPUT applies to commercial practices before, during and after a contract is made. CPUT contains a general prohibition of unfair commercial practices and, in particular, contain prohibitions of misleading and aggressive commercial practices. The Regulations also prohibit 31 specific commercial practices.
Breaching the Regulations carries criminal penalties of a fine and/or imprisonment.
Businesses should also note that from 1 October 2014, amendments to CPUT will give consumers the right to civil redress for the first time. Consumers will have the right to bring a civil action against a trader for a commercial practice that is either a misleading action or an aggressive practice. They will have a right to damages against a business if they incur financial loss or alarm, distress or physical inconvenience which would not have been incurred in the absence of the prohibited practice.
What do the recent cases demonstrate?
Recent case law has clarified a number of issues regarding the interpretation of CPUT, in particular confirming:
- The average consumer is someone who can take reasonable care of themselves, rather than an ignorant, careless or overhasty consumer
- “Transactional decision” covers not only the decision whether or not to purchase a product, but also the decision directly related to that, in particular the decision to enter into the shop. This means that a business could be guilty of an offence if a misleading sign or notice merely led a consumer into entering its premises
- A Plc can be liable as a “trader” for the acts of one of its subsidiary trading companies even though it was not involved in the day to day trading activity
- Cases involving a single contract will not fall outside the scope of the definition of “commercial practice”
What does this mean for businesses?
These recent decisions demonstrate the importance of CPUT and remind businesses that they must be vigilant in ensuring that their practices are compliant, else face potential enforcement action.