Similarly, a transaction between businesses, e.g. between
a manufacturer and wholesaler, higher up the supply
chain may be covered by the CPRs if the goods are
intended for the consumer market. The CPRs will apply
where the trader is selling to a consumer and also when
he is buying from a consumer.
The CPRs also apply to practices which occur before,
during and after the transaction. This includes advert-
ising and marketing, and after-sales service and debt
collection.
The general prohibition (reg 3)
The general prohibition against unfair commercial
practices is set out in reg 3. There are two strands to the
prohibition.
1 A commercial practice is unfair if it contravenes the
requirements of professional diligence, and it materially
distorts or is likely to distort the economic behaviour
of the average consumer with regard to the product
(reg 3(3)).
2 A commercial practice is also unfair if it is:
(i) a misleading action;
(ii) a misleading omission;
(iii) an aggressive commercial practice;
(iv) listed in Sch 1 as a practice which is in all circum-
stances unfair (reg 3(4)).
Misleading and aggressive practices
(regs 5 –7)
The CPRs prohibit misleading actions and omissions.
Misleading actions (reg 5)
A commercial practice is a misleading action if it satisfies
the condition in reg 5(2) or (3).
Giving false information to, or deceiving,
consumers (reg 5(2))
A commercial practice will be misleading if it con-
tains false information and is untruthful in relation to
certain specified matters contained in reg 5(4) or if its
overall presentation deceives or is likely to deceive the
average consumer in relation to the matters in reg 5(4)
even if the information is factually correct and it
causes or is likely to cause the average consumer to
take a transactional decision he would not have taken
otherwise.
Creating confusion and failing to honour
commitments made in a code of practice (reg 5(3))
A commercial practice will be misleading if it concerns
any marketing of a product which creates confusion
with any products, trade marks, trade names or other
distinguishing marks of a competitor, or it concerns the
failure of a trader to comply with a commitment con-
tained in a code of conduct where the trader has indic-
ated that he is bound by the code andthe commitment
is firm and capable of being verified (and is not aspira-
tional) and it causes or is likely to cause the average con-
sumer to take a transactional decision he would not have
taken otherwise.
Specified matters (reg 5(4))
The matters referred to in reg 5(2) include the main
factors which a consumer is likely to take into account in
making decisions about a product. The list includes:
(a) the existence or nature of the product;
(b) the main characteristics of the product, e.g.
availability, delivery, after-sales assistance;
(c) the extent of the trader’s commitments;
(d) the motives for the commercial practice;
(e) the nature of the sales process;
(f ) any statement or symbol relating to direct or in-
direct sponsorship or approval of the trader or the
product;
(g) the price or the manner in which it is calculated;
(h) the existence of a specific price advantage;
(i) the need for a service, part, replacement or repair;
( j) the nature, attributes and rights of the trader, e.g.
qualifications, status, assets;
(k) the consumer’s rights or the risks he may face.Misleading omissions (reg 6)
A commercial practice is a misleading omission if in its
factual context the practice omits or hides material
information or provides it in an unclear, unintelligible,
ambiguous or untimely manner and as a result it causes
or is likely to cause the average consumer to take a
different transactional decision. An assessment of the
factual context includes all the features and circum-
stances of the commercial practice, the limitations of the
medium of communication used (i.e. in space or time)
and steps taken by the trader to make the information
available to consumers by other means. Material infor-
mation is the information the consumer needs to have
in order to make an informed decision and includes any
information required by EC law.Part 3Business transactions