Unfair commercial practices
The Consumer Protection Act 2007 which was brought into effect in May 2007 provides for its implementation in Ireland. All parts of the Act have been implemented (apart from Sections 48 and 49 which deal with surcharges on certain payment methods – see below).deals with unfair business-to-consumer commercial practices (it does not apply to dealings between businesses). The
The Act provides that a range of unfair, misleading and aggressive trading practices are banned if they are likely to cause appreciable impairment of your ability to make an informed choice in relation to the product concerned and cause you to make a decision about a transaction you would not otherwise make. These practices are banned if they meet two conditions:
- They are unfair, misleading or aggressive
- They are likely to distort your consumer choice
The legislation also provides that certain practices are always banned - these do not have to meet the second condition.
Information on unfair commercial practices is available under an EU initiative at http://www.isitfair.eu/
The agency given responsibility for enforcing the provisions of the legislation is the Competition and Consumer Protection Commission. The Central Bank of Ireland also has a role in enforcing the provisions in the financial services area. There is more information on enforcement here.
A commercial practice is considered to be unfair if it is contrary to the requirements of professional diligence. That means it is contrary to the general principle of good faith in the trader's field of activity and/or the standard of skill and care that the trader could reasonably be expected to exercise towards consumers.
Existing consumer legislation already prohibited some misleading commercial practices, for example, misleading advertisements. This Act, however, provides for a more extensive list of prohibited practices. The sale of property was not covered by existing legislation but is included in the scope of this Act. The Minister has the power to make Regulations prescribing the sort of information which must be provided with specific products and with specific advertising.
The Act provides that certain practices in relation to
- Marketing and advertising
- Codes of practice
- Omission of information
- Unclear information
are misleading. More detailed information on these specific practices is set out below:
A commercial practice is misleading if it includes providing false information about or, would cause you to be deceived about:
- The existence or nature of a product and its main characteristics
- The price
- The need for any part, replacement, servicing or repair
- The existence, extent or nature of any approval or sponsorship (direct or indirect) of the product by others
- The nature, attributes or rights of the trader
- The extent of the trader's commitments
- The trader's motives for the commercial practice
- The nature of the trader's supply process
- The legal rights of a consumer
The Act gives the Minister the power to make Regulations that require some products to carry specified information.
Marketing and advertising
A commercial practice involving marketing or advertising is misleading if it causes the average person to confuse a competitor's product with the trader's product or a competitor's trade name or trademark, or some other distinguishing feature or mark, with that of the trader.
Codes of practice
A commercial practice is misleading if it involves a representation that the trader abides or is bound by a code of practice and the trader fails to comply with a firm commitment in that code of practice.
Omission of information
A commercial practices is misleading if the trader omits or conceals material information that the average consumer would need in order to make an informed decision.
A commercial practice is misleading if the trader provides material information in a manner that is unclear, unintelligible, ambiguous or untimely, or fails to identify the commercial intent of the practice.
The Act outlaws the practice of charging consumers more for using different methods of payment. Traders who are prepared to accept payment by two or more of the following:
- Credit card
- Direct debit
- Any other prescribed method
may not charge the consumer more for using one such method.
So, for example, if it is possible to pay for goods in cash or by credit card, you cannot be charged more for paying by credit card. It will continue to be legal to impose a charge for payment by credit card if there is no alternative method of payment or if the charge applies to all methods of payment, but the price quoted must include such a charge.
The sections on payment methods were not implemented in May 2007 with the rest of the Act.
Aggressive commercial practices are defined as practices involving harassment, coercion or undue influence that impair your freedom of choice and affect your purchasing decisions. The Act sets out some examples of aggressive practices (but the list is not exhaustive). Aggressive commercial practices include:
- Sales tactics that try to intimidate or coerce consumers .
- The use of threatening or abusive behaviour .
- Practices that try to take advantage of vulnerable consumers. (A vulnerable consumer is one whom the trader could foresee as vulnerable because of mental or physical infirmity, age or credulity.)
- The imposition of onerous or disproportionate non-contractual barriers by the trader when the consumer wishes to end the contract or exercise a contractual right, or switch to another product or trader.
- Threats to take legal action when the trader has no basis for such action.
Practices which are always banned
The Act provides that certain commercial practices are always banned, whether or not they would affect a consumer's decision. They include:
- Claims that a product or trader has an endorsement or authorisation that does not exist or that the product or trader is not in compliance with
- False claims that a trader is about to cease trading or move premises
- Prize promotions where there is either no prize or consumers must make a payment in order to claim a prize
- False claims that the supply of a product is legal
- False claims that products can cure illnesses
- Persistent unwanted cold calling
- Creating an impression that a consumer cannot leave the premises until a contract is formed
- Requiring a consumer to produce documents which are irrelevant in the case of an insurance claim or persistently failing to answer a consumer's correspondence in respect of an insurance claim in order to dissuade consumers from exercising their rights under the contract
- Advertisements directly aimed at getting children to buy products or persuade adults to buy for them