Consumers who are subjected to lies or pressure selling by unscrupulous traders have new rights from October

Posted 16/09/2014

When the changes come into effect, the Consumer Protection Regulations will give consumers the right to unwind contracts, claim a discount or raise a claim for damages against businesses who have subjected them to misleading or aggressive tactics.

Although crooked business practices were the target of the Consumer Protection Act in 2009, the original regulations did not give consumers any private right of redress against the trader, so victims had to rely on complex civil law, or in some cases had no options at all. 

Now there is a route to remedy, but it’s not enough for the consumer to feel intimidated or misled, they must have made a ‘transactional decision’ such as buying goods or services from a business or selling goods to the trader.  There is also an ‘average consumer’ test, which asks whether someone who is reasonably well informed and observant would have entered in to the contract or made the payment.  Therefore, it will not be enough for a consumer to say that they personally felt intimidated or misled, although there will be a separate test for vulnerable consumers.   

And to make a claim, a consumer will have to show they suffered a loss or distress as a result of the misleading or aggressive commercial practice and the right to damages will be limited “in respect of loss that was reasonably foreseeable at the time of the prohibited practice”.  Traders will have a number of defences, such as if they can show that the misleading or aggressive practice happened as a result of a mistake or other cause beyond their control, and that they took all reasonable precautions to avoid the misleading or aggressive practice from occurring.

Financial services contracts between businesses and consumers, such as for pensions, mortgages, insurance and banking, will not be covered by the new Regulations.

Consumer expert James Eden said:  “These new regulations represent an important change in the law, and should prompt businesses to check their processes and make sure that staff know they must keep clear of such practices.

“We are seeing a wholesale overhaul of consumer law at the moment.  Coming soon will be the Consumer Rights Bill, which is now in the final stages of parliamentary review, and this is intended to be a simplified, modern framework of consumer rights.  It should become easier for both business and consumers to know where they stand.”