New UK Consumer Protection Rules Enacted

The UK recently enacted sweeping new consumer protection rules that provide civil and criminal penalties for a variety marketing practices. The new law known as the Unfair Trading Regulations 2008 was enacted on May 26, 2008 and provides for statutory fines and up to two years imprisonment for violation, including some 31 commercial practices which are in all circumstances considered to be unfair.

Included in the per se unfair practices, are:

  • Falsely stating that a product will be available for a very limited time, or that it will only be available on particular terms for a very limited time, in order to elicit an immediate decision and deprive consumers of sufficient opportunity or time to make an informed choice;
  • Using editorial content in media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable by the consumer (advertorial);
  • Claiming that products are able to facilitate winning games of chance;
  • Falsely claiming that a product is able to cure illness, dysfunction or malformations;
  • Describing a product a "gratis", "free", "without charge" or similar if the consumer has to pay anything other than the unavoidable cost of responding to the commercial practice and collecting or paying for delivery of the item;
  • Making persistent and unwanted solicitations by telephone, fax, e-mail or other remote media except in circumstances and to the extent justified to enforce a contractual obligation;
  • Creating the false impression that the consumer has already won, will win, or will on doing a particular act win, a prize or other equivalent benefit, when in fact either -
  • there is no prize or other equivalent benefit; or
  • taking any action in relation to claiming the prize or other equivalent benefit is subject to the consumer paying money or incurring a cost.

The new law also provides that if a corporation is found to have violated its provisions, officers, including directors and managers can also be prosecuted if the offense if found to have been committed with the consent or connivance of such officer or attributable to any neglect on his part.

The Act also expands what will be considered to be unfair or misleading commercial practices, It prohibits commercial practices if they contain false or misleading information, or if its overall presentation in any way deceives or is likely to deceive the average consumer, even if the information is factually correct, if it causes or is likely to cause the average consumer to decide whether, how or on what terms to purchase, make a payment or exercise a right with respect to a product.

The Act also defines "Misleading Omissions" as not only omitting or hiding material information, but also if it includes materials information in a manner which is unclear, unintelligible, ambiguous or untimely.

Advertisers who plan to market in the UK will have to take special care to carefully review all advertising and promotional marketing programs, as the penalties have now increased so markedly.

We have attached a set of Unfair Trading Regulation guidelines issued by the Office of Fair Trading for UK business that may be of assistance. For practical business advice and to find out more about these regulations, please visit the country specific website: England, Scottish Highlands & Islands, Wales, Northern Ireland.

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