New consumer protection and advertising regulations

The Consumer Protection from Unfair Trading Regulations, which came into force on Monday (26 May), have been described as the biggest overhaul of consumer protection laws in 40 years.

The regulations ban 31 types of unfair sales practices outright and tighten controls on traders. The changes adopt an EU directive requiring all businesses to treat customers fairly, closing loopholes that rogue traders have previously been able to exploit.

The Office of Fair Trading (OFT) and Trading Standards will enforce the new rules. Businesses breaking the laws face substantial fines and prison sentences, depending on the seriousness of the offending.

The regulations outlaw traders using misleading statements, fake credentials and aggressive sales practices. Among the tactics that are now illegal are bogus closing down sales, limited time offers that are later extended, false testimonials on websites and high pressure sales techniques, especially those likely to harm the elderly or vulnerable.

Andy Millmore, a partner at London law firm Harbottle and Lewis, said: "What is significant is the sweeping nature of the regulations, effectively criminalising actions that might in the past have escaped legal censure, even if they may perhaps have been covered by industry voluntary codes."

National Consumer Council spokesman Carl Belgrove said the laws represented a major boost for consumer protection. "The one thing missing is a way for consumers to claim compensation when businesses act unfairly and we hope that will be remedied soon," he added.

The Department for Business, Enterprise and Regulatory Reform (BERR) website provides information and guidance on the new consumer protection laws, which can be found here.

Misleading adverts

Advertising that misleads traders, or "comparative advertising" which does not satisfy certain conditions, has also been prohibited from Monday 26 May.

Advertising means any form of representation by a business to promote the supply or transfer of goods or services. Comparative advertising directly or indirectly identifies a competitor or a competitor's product.

The Business Protection from Misleading Marketing Regulations state that advertising is misleading where it deceives or is likely to deceive businesses, and potentially affect their economic behaviour.

The Office of Fair Trading and Trading Standards may apply to the courts for injunctions to stop any breach of the regulations.

Advertising which misleads traders will be a criminal offence, meaning that businesses and their employees must take all reasonable steps to ensure that advertisements are not in any way misleading.

Further information on misleading advertising and the new rules can also be found on BERR website here.