Consumer protection Introduction to consumer law & consumer enforcement Jason Freeman (November 2017)
Did you know… • You are all consumers…
Aims • This session will provide you – as advisers in law centres- with an introduction to 4 laws that protect consumers.
Objectives • By the end of this session you will be able to 1. Explain why consumer protection exists 2. Identify when a practice may infringe consumer law, who is responsible and what a consumer might be able to do about it. 3. Identify some routes that the consumer might be able to take to get their issue resolved
Agenda • We will cover 1. The essentials • Why consumer law? • What is consumer law? 2. A deeper dive into the tools • Advertising and unfair trading • Quality – sale of goods, services and digital content • Unfair terms • Distance selling, information and cancellation 3. Consumer enforcement • Who can enforce and what tools are available? • What remedy?
The essentials Section one
Overview • This section will cover • Why consumer law? • What is consumer law? • By the end of this section you will be able to • Explain why consumer law exists
Session 1 Why consumer law?
What makes markets work well? Consumers drive competition • Access, assess and act on information Firms compete fairly • On price, quality, range and service • Rewarded for best satisfying consumers’ needs Virtuous circle delivers growth • Innovation • Value • Choice
Why do some markets not work well? Traders’ practices may exploit consumer behavioural biases Access Assess Act • Information • Price framing • Switching costs asymmetry • Consumer • Consumer • Consumer anchoring inertia myopia This harms consumers and the market
Session 2 What is consumer law?
What does EU consumer law cover? Basic contractual E- Essential rights Commerce contractual & payment information services Unfair Credit terms Consumer law Travel, Distance package selling holidays Aggressive Doorstop practices selling Advertising
EU and UK consumer law EU consumer & EU consumer law UK consumer law competition policy • • Directives Consumer & • Consumer protection competition policy • Regulations (BIS) • Level playing field • EU court judgments • Consumer legislation • Full harmonisation of • Guidance from • laws Court judgments Commission • • Limited protection for Sectoral rules businesses • Guidance from enforcers
UK specific rules Competition remedies • Point of sale warranties • Home collected credit • Payment protection insurance • Payday lending • Protection for SMEs? Sectoral rules • Information Commissioner • Financial services • Energy, telecoms, rail, airlines, water Self regulation • Advertising Standards Authority • Phone Pay Plus • Codes schemes
Consumer or Trader? Consumer Trader Private individual Any legal person Acting for Wholly or mainly purposes related outside course of to business, trade business or profession
Challenging areas… Consumer to Consumer to Economically Mixed use Preparatory business consumer active contracts activities transactions transactions consumers (C2B) (C2C)
Enforcing consumer law Criminal prosecution • Consumer Protection from Unfair Training Regulations 2008 • Business Protection from Misleading Marketing Regulations 2008 Enterprise Act 2002 Part 8 • CMA (and other enforcers) can seek an Enforcement Order to stop traders breaching the law and secure redress for consumers • Relates to Enforcement UK (domestic infringements) and European (Community infringements) consumer protection laws • Failure to comply with Enforcement Order is contempt of court
Deeper dive into the tools Section two
Overview • This section will cover • Four main consumer protection laws • By the end of this section you will be able to • Explain what rights and duties the Consumer Protection from Unfair Training Regulations 2008 (CPRs) create • Explain what unfair terms rights and duties the Consumer Rights Act 2015 (CRA) creates • Explain what consumers can expect from traders when they buy goods, services or digital content under the CRA • Explain what information, delivery and cancellation rights consumers enjoy under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCRs)
Session 1 Advertising and unfair trading
How would you… • Draft a law to stop unfair trade practices? • …think about • Scope • The standard of protection • How you define what is harmful • What is the consequence if the law is infringed?
The Consumer Protection from Unfair Trading Regulations – Key facts Implement the Unfair Commercial Practices Directive (UCPD) Intended to provide a high level of consumer protection Sets the legal standard across the whole EU
What do the CPRs cover? • Commercial Practices • Basically everything a business does Act, omission, course of Directly Before, conduct, connected with during or representation the promotion, after a or commercial sale or supply By a trader commercial of a product to communication transaction or from (including (if any) consumers advertising & marketing)
Is it a Commercial Practice? • Andrew sells his children’s toys on eBay • Barbara runs a garage repairing cars • Colin offers training in sales techniques for doorstep salesmen • Derek manufactures cleaning products • Elizabeth is a builder advertising home improvements • FastNet Ltd provide a webhosting service
What is the standard of protection? Must (be likely to) have an effect on The decision making Of the average (vulnerable / targeted) consumer
What is actually illegal? General prohibition Contrary to the (Likely to) appreciably impair the average consumer’s ability (Regulation 3) requirements of professional diligence to make an informed decision And as a result Misleading action False or deceptive And (Regulation 5) practice (list of key factors) Causes (or is likely to Misleading omission Omission (or unclear / And cause) (Regulation 6) untimely provision) of the average material information consumer to take a Aggressive practice Aggressive practice by (Likely to) significantly impair different the average consumer’s (Regulation 7) harassment, coercion transactional or undue influence freedom of choice or conduct decision And as a result Banned Practice One of 31 specified No impairment or transactional decision tests (Schedule 1) practices
Is it illegal? • Andrew describes an old board game as ‘in pristine condition’. This is true, but a couple of pieces are missing • Barbara advertises “Free tyres with every MOT”, but charges a fitting fee of £25 • Colin tells salesmen to charge a high price for products, and if customer doesn’t buy, to offer a 50% discount “valid today only”, and if they still quibble tell them the salesman needs the sale to pay his mortgage • Derek’s labelling describes his cleaning products as “100% organic”. • Elizabeth does work on some guttering, but gets the guttering crooked, so that water leaks • FastNet offer “bullet proof” hosting – they promise never to reveal who you are, or to take down any content
What are the consequences of infringement? 1. Criminal prosecution • Most infringements are criminal offences 2. Consumer’s private right of redress • If a consumer entered into a contract with, or made a payment to, a trader after 1 October 2014 as a result of a misleading action or an aggressive practice • Potential remedies • Unwind the contract and get money back • Discount on the purchase price • Damages
John and the Garage • On 1 st November 2015 John took car to Barbara’s garage to be fixed. Garage said it would cost about £100. • When John picked up car, garage said they had to do extra work – bill was now £500. If John did not pay, he could not get car back. • John needed the car for work, as well as to take his elderly mother to her day care centre, so he paid the £500. • What do you advise?
Session 2 Fundamental contract rights
Overview • This part will cover • Part 1 of the Consumer Rights Act 2015 (CRA) • By the end of this session you will be able to apply to a problem the law that creates legal obligations when traders supply • Goods • Digital content • Services
What is a contract? “Give me £2.50 and I will get you a coffee.” • Is this a contract? • What sort of contract is it?
Features of a contract • Think about “Give me £2.50 and I will get you a coffee” 1. Invitation to treat or Offer? 2. Acceptance? 3. Consideration (moving from promisee)? 4. Intention to create legal relations? 5. Certainty of terms?
What terms get into a contract? Implied under Implied by Express common law statute • Oral or • Course of • Cannot be written dealing excluded • Intention of from consumer the parties contracts
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