The Unfair Commercial Practices Directive (Directive 2005/29/EC) was transposed into Irish law on 1 May by the Consumer Protection Act 2007.
The new laws will mean that your business terms and conditions of trading may need updating. It includes a list of 23 "blacklisted" misleading commercial practices and 8 aggressive commercial practices that are unfair in all circumstances. The purpose of the directive is to regulate commercial practices, reduce the uncertainty of cross boarder transactions and provide greater consumer protection.
The Directive introduces a general prohibition on unfair business-to-consumer commercial practices. Such practices are defined as any act, omission, course of conduct or representation, commercial communication including advertising and marketing, by a trader, directly connected with the promotion, sale or supply of a product to consumers. The Directive deals with two main types of unfair commercial practices:- (i) "misleading" and (ii) "aggressive".
Misleading Commercial Practices can be sub-divided into two categories - misleading actions and misleading omissions. A commercial practice shall be regarded as misleading if it contains false information and is therefore untruthful or in any way is likely to deceive the average customer. The European Court of Justice has in the past considered the average customer to be "reasonably well-informed and reasonably observant and circumspect". Therefore, a commercial practice will be misleading if it contains false information for example, in its overall presentation, and is likely to deceive the average consumer or cause him to take a transactional decision he would not have otherwise taken. It is not necessary to prove that the consumer was misled. A commercial practice will also be regarded as misleading if, having regard to all its features and circumstances, it omits material information that the average consumer needs. It will also be misleading for a trader to hide material information or provide it in an unclear, unintelligible, ambiguous or untimely manner or fail to identify the commercial intent of the commercial practice if not already apparent from the context.
A commercial practice shall be considered to be aggressive if, in its factual context, taking account of all its features and circumstances, it significantly impairs or is likely to significantly impair the average consumer's freedom of choice or conduct. The types of behaviour listed by the directive are harassment, coercion, including the use of physical force and undue influence. In determining whether these methods have been employed in a commercial practice, a number of factors will be taken into consideration. These include its timing, location, nature or persistence of the practice, the use of threatening or abusive language or behaviour, the exploitation of a particular circumstance or misfortune to influence the consumer's decision, disproportionate or onerous non-contractual barriers or any threat to take action that cannot be legally taken.
A number of commercial practices are "blacklisted" consisting of 23 misleading commercial practices and 8 aggressive commercial practices. They include the following:
Misleading Commercial Practices
- Displaying a trust mark, quality mark or equivalent without having obtained the necessary authorisation.
- Stating or otherwise creating the impression that a product can legally be sold when it can not.
- Claiming that the trader is about to cease trading or move premises when he is not.
- Falsely claiming that a product is able to cure illnesses, dysfunction or malformations.
Aggressive Commercial Practices
- Creating the impression that the consumer cannot leave the premises until a contract is formed.
- Conducting personal visits to the consumer's home ignoring the consumer's request to leave or not to return except in circumstances and to the extent justified, under national law, to enforce a contractual obligation.
- Explicitly informing a consumer that if he does not buy the product or service, the trader's job or livelihood will be in jeopardy.
The Consumer Protection Act 2007 also established the National Consumer Agency (NCA). The NCA has greater enforcement powers than the Office of Director of Consumer Affairs. The NCA can accept a written undertaking from a trader who is engaging in the conduct in breach of consumer law.