News & Insights

OFT prosecutions for unfair commercial practices

This article considers when The Office of Fair Trading will prosecute for unfair commercial practices under the Consumer Protection from Unfair Trading Regulations 2008.

The Office of Fair Trading (OFT) has issued a note detailing the circumstances in which it will prosecute businesses for breach of the Consumer Protection from Unfair Trading Regulations 2008 (CPRs).

The CPRs prohibit businesses adopting unfair trading practices in their dealings with consumers. Broadly speaking, an unfair trading practice is behaviour which falls below the standard for honest market practice, and which materially affects the consumer’s decision as to whether to buy a product or service.

There are specific prohibitions in the CPRs for giving misleading information (such as mis-information on price, product characteristics or the consumer’s rights but also hiding important information from the consumer) and aggressive practices (such as harassing consumers or unduly influencing them).

There are also a list of specific practices which are always going to be regarded as unfair such as falsely stating that a product’s availability is time limited or describing a product as “free” (or similar wording) if the consumer actually has to pay for part of it.

The OFT has the power to press criminal charges for these practices. The OFT’s note states that there are two circumstances in which it is more likely to prosecute than to use its other powers:

  • where civil enforcement is unlikely to be effective in achieving a change in behaviour; and/or
  • the breach is sufficiently serious that the conviction and punishment of offenders ought to be pursued, for example to protect the public and to provide wider deterrence.

The OFT’s clarification on prosecutions is a good indication that it fully intends to use its powers. This approach is in line with a trend under which government bodies are increasingly using criminal sanctions to compel regulatory compliance. Businesses are advised to consider the ways in which their sales processes work and how its employees are dealing with consumers to ensure that the CPRs are not being breached.