From 1 October 2014 consumers will have new rights to complain that they have been subjected to misleading or aggressive sales practices or demands for payment, thanks to the Consumer Protection from Unfair Trading (Amendment) Regulations 2014.
Rules have been in place since 2008 that make misleading or aggressive sales activity illegal, but consumers will now have the right to take action directly against traders. They may be able to unwind the contract (if they complain within 90 days), obtain a discount on the price paid and even damages for (amongst other things) financial loss or distress caused by the misleading or aggressive practice.
You are probably thinking this won't apply to your business. However, some household names have fallen foul of the rules and there have been some high profile instances of misleading price promotions and misleading price comparison advertising. After 1 October 2014, these misleading sales practices could result in claims from unhappy consumers, in addition to a fine (or in the most serious cases, imprisonment).
So how do the new Regulations apply? The new Regulations apply widely to products and services, with a specific amendment to include digital content. An omission can amount to misleading information if it creates a misleading impression overall. The definition of business is expanded to include the activities of government departments and public authorities, and consumers will now include individuals acting partly (but not mainly) within the scope of their own business.
Government guidance on the new Regulations gives the example of a mobile phone provider advertising fast 4G internet speeds, and a sales assistant in an independent store saying that there is good coverage in a particular part of the country. When the customer finds that the actual speeds she can obtain are slower than stated, and coverage is poor, both the mobile phone company and the independent store would be at fault. The customer could unwind the contract (meaning she can cancel the contract and obtain a refund) if she complains before the 90 days are up, or if later than this, she could receive a discount of up to 100% of the amounts due. With an example like this, there is a grey area between what is clearly misleading and what could be described as normal advertising practice.
The new Regulations also catch aggressive or misleading demands by traders for payment. This could apply where a business pursues individuals for payments for illegal software or music downloads - businesses will need to tread carefully in these circumstances.
To be clear, the new Regulations do not require the extensive changes to the customer interface that were brought in by the June regulations on information and cancellation rights, but they will increase the importance of appropriate training being provided to consumer-facing sales teams and of careful price promotion policies, in particular, for consumer-facing businesses.