The UK's Consumer Protection for Unfair Trading Regulations 2008 (CPRs) have created a regime to prevent traders using unfair and aggressive practices against consumers and followed an European Union Directive in this area.
Over the past 5 years the CPRs have been enforced by local regulators throughout the UK using investigatory powers and by seeking criminal sanctions against traders.
Unfair and aggressive practices are seemingly widespread in the UK, with Citizens Advice Chief Executive, Gillian Guy, stating "Citizens Advice helps with over 77,000 problems with misleading claims and pressure selling a year."
For the last two years the UK Government has been consulting on measures to increase consumer protection and give consumers greater powers to enforce their rights. It is in this context that the Department for Business, Innovation & Skills has this week released its draft of the Consumer Protection from Unfair Trading (Amendment) Regulations 2013.
This is in addition to other current UK consumer law proposals including the Consumer Rights Bill and legislation that will transpose the EU's Consumer Rights Directive in 2014.
The primary change being introduced by the draft regulations is the right of consumers to take enforcement action themselves. For the first time, consumers may take private civil court action against a trader who has used misleading or aggressive practices against them. This is a completely new addition to the CPRs, where previously a consumer has had to rely upon local regulators to take any enforcement action which is only criminal in nature.
As part of the proposed regulations, the consumer may, in certain circumstances, unwind a contract, as long as they notify the trader that they reject the relevant product up to 90 days from the date when the contract was entered into. There are extended time limits where, for example, the goods are delivered some time after the agreement is made.
Aside from the opportunity to unwind the contract, the consumer may have the right to receive a full refund and compensation for any financial losses, alarm, distress, physical discomfort or inconvenience suffered.
Although this does provide consumers with considerable new powers to challenge misleading and aggressive practices by traders, there are certain concerns which may cast a shadow over the practical success of the reforms.
The majority of consumer claims under the proposed regulations will be for relatively minor sums.
The value of the products or services being provided will likely not justify the consumer paying for legal advice to ascertain their rights. Although organisations such as the Citizens Advice Bureau and the Consumers' Association will likely be producing guidance and providing support to consumers, it is unclear how much knowledge many consumers will have of their new rights.
Even where a consumer knows their rights, if the matter cannot be successfully concluded directly with the trader, the consumer will need to take the matter to court.
This raises further issues, including the consumer having to choose between either advocating the matter in court themself, or obtaining potentially costly legal advice.
Even with the assistance of the court, the difficulty involved in arguing a case for potentially a small amount of compensation against a business may discourage a large number of consumers from seeking final redress.
In summary, the vast majority of UK businesses will welcome these changes, as they do not use such unfair practices and so the reforms will further help create a level playing field between traders.
Whilst the changes give consumers important new powers, we envisage that regulatory bodies will continue to concentrate on enforcing the regulations against rogue businesses.
Matthew Gough is the partner and head of consumer law group at global law firm Eversheds