Headline here

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Unfair Commercial Practices Directive (UCPD) and
the Consumer Protection from Unfair Trading
Regulations (CPRs)
Andrew Hadley Office of Fair Trading
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What I will cover today

• The legislative framework
• The Unfair Commercial Practices Directive and its
  prohibitions
• Whats going on
• Enforcement and Self-Regulation

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The Legislative Framework

• UCPD is only part of the range of legislation
  affecting B2C transactions
• Laws relating to contracts (e.g. Unfair Terms in
  Consumer Contract Regulations)
• Laws relating to specific products (e.g.
  Medicines (Advertising) Regulations)
• Laws relating to specific channels (e.g. Doorstep
  Selling Regulations / Distance Selling
  Regulations)
• Laws on B2B activity (e.g. Business Protection
  from Misleading Marketing Regulations)

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What is the UCPD?

• The Unfair Commercial Practices Directive
• Harmonises consumer protection across the EU
• Increases consumer confidence and
• Makes it easier for businesses to operate in
  different Member States
• There are certain exemptions but otherwise
  national law must be brought in line with UCPD
  UK will repeal provisions in 22 statutes

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What is the UCPD?

• It introduces a general duty not to trade
  unfairly
• Applies to business to consumer commercial
  practices directly connected to the sale, supply
  or promotion of products to consumers
• A principles-based approach instead of the
  prescriptive rules we are used to in the UK
• The UCPD seeks to ensure that traders act
  honestly and fairly towards their customers and
  do not unfairly distort their decisions

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What are the CPRs?

• The Consumer Protection from Unfair Trading
  Regulations implement the UCPD in the UK
• Replace existing law such as CMARs, TDA and CPA
  Part III (23 statutes are affected)
• Covers B2C and B2B practices where the consumer
  is the end user
• Covers all products (including goods and
  services)
• Before, during and after a contract is made

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Tiers of prohibitions
GENERAL PROHIBITION (CONTRARY TO REQUIREMENTS OF
PROFESSIONAL DILIGENCE)
must satisfy effect test
MISLEADING PRACTICES
AGGRESSIVE PRACTICES
OMISSIONS
ACTIONS
BANNED PRACTICES (31 SPECIFIC PRACTICES BANNED
IN ALL CIRCUMSTANCES)
deemed effect
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What will it do? Unfair Conduct

• Three tiers of protection for consumers
• Prohibits actions contrary to the requirements
  of professional diligence
• About reasonable expectations of honest behaviour
• Specifically prohibits misleading actions and
  omissions and aggressive practices
• Covers deception, falsehood, omission of material
  information, harassment, coercion and undue
  influence
• More specifically, 31 practices are prohibited in
  all circumstances (no effect test)

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What will it do? Unfair Conduct

• Remember no effect test applies
• False claims of code membership etc (1-4)
• False claims of curing illnesses, dysfunctions or
  malformations (17)
• False claims related to the use of free or
  gratis etc (20)_
• Refusing to leave or not to return to the
  consumers home when asked (25)
• Suggest you read all of these!

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What will it do? Unfair Effect

• 31 practices are always considered unfair
• Other prohibitions must show that the practice
  has an impact on consumers decisions (or is
  likely to)
• Causes or is likely to cause the average
  consumer to take a transactional decision he
  would not have taken otherwise

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What will it do? New concepts

• Average consumer
• Also protects average member of a group to whom
  the practice is directed
• Also protects average member of a vulnerable
  group (by age, credulity, infirmity)
• Transactional decision
• Very wide concept
• Covers any decision before, during or after the
  purchase (in relation to product)
• Includes decisions not to buy or act (e.g. to
  cancel)

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What happens next?

• Regulations likely to be debated in Parliament in
  late April and early March
• Regulations due to come into force 26th May
• Final Guidance published after approval
• OFT training enforcers, Consumer Direct and other
  bodies
• BERR and OFT working on communications strategy,
  both short (mainly BERR) and long-term (OFT)

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Enforcement and Self-Regulation

• OFT and Trading Standards have a duty to enforce,
  and can bring civil or criminal action
• Sectoral bodies can bring civil actions only
• Other bodies may have some jurisdiction here,
  MHRA, Healthcare Commission
• OFT is interested in protecting consumers
  economic interests
• We do this via consultation and advice as well as
  formal enforcement actions

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Enforcement and Self-Regulation

• All enforcers required to act proportionately,
  transparently, effectively etc
• Have a duty to consult appropriate established
  means
• Work with trade associations, and particularly
  Codes of practice (especially ones that join our
  CCAS scheme)
• CCAS scheme allows members to use the OFT
  approved code logo in shops and advertising etc

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Unfair Commercial Practices Directive (UCPD) and
the Consumer Protection from Unfair Trading
Regulations (CPRs)
Andrew Hadley Office of Fair Trading 0207 211
8419