If the consumer is falsely told that the package includes sports channels, which are in fact only available at an additional subscription cost, the trader has provided false information about the contents of the package and therefore about the main characteristics of the product. As this practice is likely to cause the typical consumer to take a different decision about the package, it will breach the draft Regulations.
Always unfair The Directive lists 31 practices that will always be considered unfair, including:. Displaying a quality mark without authorisation. Falsely claiming to be a signatory to a code of conduct. Falsely claiming that a product is able to cure illnesses. Falsely stating that a product will be available for a very limited time in order to obtain an immediate decision. Significantly misrepresenting the risk to the consumer or his family of a decision not to purchase the product in question. Failing to respond to pertinent correspondence in order to dissuade a consumer from exercising his contractual rights.
Establishing, operating or promoting a pyramid promotional scheme. These are reproduced in Schedule 1 to the draft Regulations. Enforcement Under Part 3 of the draft Regulations, prohibitions will be enforceable through civil actions injunctions brought under the Enterprise Act and through criminal sanctions. The draft Regulations propose that the general prohibition see above will be a mens rea offence, and therefore the prosecution will be required to prove that the trader has knowingly or recklessly breached the requirements of professional diligence.
The other offences will be strict liability offences and so it will not be necessary for a specific state of mind to be proven. However, the draft Regulations provide the following defences to the strict liability offences: due diligence; innocent publication of advertisements; and publication of commercial practices that are not advertisements. Where offences have been committed by corporate bodies, the draft Regulations provide for the prosecution of management that is, a director, manager, secretary or similar officer where the offence has been committed with the consent or connivance of the management or where the offence is attributable to any neglect on its part.
This duty allows enforcement authorities to take steps to promote compliance by the most appropriate means taking into consideration available resources, established methods and their enforcement priorities.
- Volkswagen should act according to the Directive on unfair commercial practices.
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The authorities are provided with investigative powers including the power to make test purchases and to enter premises with or without a warrant. These enforcement powers are supported by regulation 24 in the draft Regulations, which introduces a criminal offence of intentionally obstructing, or making false statements to, an officer of an enforcement authority.
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Imposes a general obligation on all businesses not to treat consumers unfairly. It is intended that this will capture a wide range of unfair conduct across all business sectors including unfair practices that may emerge in the future. Prohibits businesses from misleading consumers or subjecting them to aggressive selling techniques.
Both consultations will close on 21 August and the final regulations are due to be made in autumn In so doing it will capture a very wide range of unfair conduct across all business sectors including unfair practices that have not yet been dreamt up. It will also prohibit businesses from misleading consumers or subjecting them to aggressive selling techniques.
There are extra protections for vulnerable consumers, so often the primary target of unfair commercial practices. The Directive contains clear rules to determine when a commercial practice will be deemed unfair. These fall broadly into three categories:. This benchmark will normally be judged by the standards of "the average consumer", although in certain circumstances it will be adjusted to the more exacting standards of " the vulnerable consumer ". An important objective of the Directive is to create greater legal certainty, so the ways in which a commercial practice can stray into this territory is set out in detail.
A misleading commercial practice will contain false information i. The list of the 31 practices which will always be considered unfair contains both misleading and aggressive commercial practices which are all too common, including:.
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The government has plans for an enforcement regime which, it says, will tackle unfair practices without over-burdening businesses that trade fairly. It is likely to include the use of civil sanctions including injunctions brought under the Enterprise Act as well as criminal penalties the results of a consultation on criminal sanctions are yet to be published. The Directive also allows for enforcement action to be taken against groups of traders who are all using similar unfair practices. The DTI has issued consultation documents on the implementation of the Directive and is currently investigating whether or not criminal sanctions are required to help enforce its provisions.
Draft legislation is expected in early April The UK is one of the few EU countries not to already have some form of general fair trading duty incorporated into its national law. Instead we rely mainly on sector-specific legislation. Put succinctly, if your business supplies or markets goods and services to or for consumers then the Directive may well have an impact on your operations and you would be wise to familiarise yourself with the new legislation, in particular the general prohibition on treating consumers unfairly.
However, there will be initial costs associated with familiarisation and the repeal of some long-standing consumer legislation could lead to legal uncertainty where, for example, old prescriptive rules are replaced by a general duty. In some situations this new uncertainty may not lift until the courts examine some individual test cases.
Though the precise scope of how the Directive will be implemented in the UK remains to be seen, it is clear that its implementation will have a considerable impact on UK consumer legislation. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Last Updated: 30 July Enforcement The government has plans for an enforcement regime which, it says, will tackle unfair practices without over-burdening businesses that trade fairly.
UK implementation The DTI has issued consultation documents on the implementation of the Directive and is currently investigating whether or not criminal sanctions are required to help enforce its provisions. Maximum harmonisation The UK is one of the few EU countries not to already have some form of general fair trading duty incorporated into its national law. Impact on businesses Put succinctly, if your business supplies or markets goods and services to or for consumers then the Directive may well have an impact on your operations and you would be wise to familiarise yourself with the new legislation, in particular the general prohibition on treating consumers unfairly.
An important development So, this is an important Directive for three main reasons: Its scope and the principles-based approach mean that it will catch unfair practices which currently fall between existing UK and EU rules. It also sets a standard against which all new practices will automatically be judged. The general prohibition on unfair trading means that there should be no need to introduce specific regulations against new unfair practices as they emerge. It strengthens and harmonises consumer rules across the EU helping to build consumer confidence in the internal market.
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