Avoid unfair trading practices

What counts as an unfair commercial practice?

A commercial practice is unfair if it falls into one of these categories:

1. Breaches professional diligence AND materially distorts consumer behaviour
2. Misleading actions - false or deceptive information
3. Misleading omissions - hiding material information
4. Aggressive practices - harassment, coercion, or undue influence
5. Banned practices - 31 specific practices that are always unfair

The key question is whether your practice causes (or is likely to cause) the average consumer to make a different purchasing decision than they would have made otherwise.

Who is the 'average consumer'?

The law uses the test of a reasonably well-informed, reasonably observant and circumspect consumer. This is not a gullible consumer, but someone who pays reasonable attention.

However, if your marketing targets a particular group (such as elderly people or children), the test is the average member of that group. You must also consider vulnerable consumers if their vulnerability is reasonably foreseeable.

Misleading actions

A commercial practice is a misleading action if it:

• Contains false information and is therefore untruthful, OR
• Deceives or is likely to deceive the average consumer (even if factually correct), AND
• Causes or is likely to cause the consumer to make a different transactional decision

This covers information about:

Examples of misleading actions

• False availability: Advertising goods at a price you know you cannot supply
• Fake scarcity: Claiming 'limited edition' when unlimited quantities are available
• False reviews: Displaying reviews or testimonials that are fabricated or paid for without disclosure
• Brand confusion: Using logos or packaging similar to a well-known brand to create confusion
• Fake credentials: Displaying trust marks or accreditations you have not obtained
• Price manipulation: Inflating a 'was' price to make a discount appear larger than it is

Note: Even accurate information can be misleading if presented in a deceptive way - for example, using small print to hide important qualifications.

Misleading omissions

A commercial practice is a misleading omission if it:

• Omits material information the average consumer needs to make an informed decision, OR
• Hides or provides information unclearly - in a manner that is unclear, unintelligible, ambiguous, or untimely, OR
• Fails to identify commercial intent when this is not already apparent

What is 'material information'?

Material information is what the average consumer needs, in the context, to make an informed purchasing decision. When you make an invitation to purchase (showing a product with its price), you must provide:

Examples of misleading omissions

• Hidden costs: Advertising a price then adding unavoidable fees at checkout ('drip pricing' - now specifically prohibited under DMCCA 2024)
• Undisclosed conditions: Claiming something is 'free' when a paid subscription is required to access it
• Refurbished goods: Selling a refurbished phone without disclosing it is not new
• Undisclosed advertising: Publishing advertorial content without making clear it is paid promotion
• Language changes: Promising after-sales service in English, then only providing it in another language

The law recognises that space or time limitations (such as a short advertisement) may prevent you from including all information. But you must then make the information available through other means - for example, linking to a webpage with full details.

Aggressive commercial practices

A commercial practice is aggressive if it uses harassment, coercion, or undue influence to significantly impair the consumer's freedom of choice, causing them to make a different decision.

The three mechanisms

• Harassment: Persistent unwanted approaches or communications
• Coercion: Including the use of physical force or threats
• Undue influence: Exploiting a position of power to pressure the consumer, even without physical force

Factors the law considers

When assessing whether a practice is aggressive, enforcers look at:

Examples of aggressive practices

• Physical coercion: Posting intimidating staff at exits during sales presentations
• Refusal to leave: Staying in a consumer's home until they sign a contract
• Persistent calling: Making repeated telephone calls after the consumer has said no
• Exploitation: Targeting recently bereaved people with funeral services at inflated prices
• Obstruction: Requiring 50 pages of documentation to cancel a subscription
• False threats: Telling a consumer they will be reported to credit agencies for disputing a charge

The 31 banned practices

Schedule 1 of the regulations lists 31 commercial practices that are always unfair - regardless of whether they actually affected any individual consumer. No proof of consumer impact is needed.

These are divided into misleading practices (23) and aggressive practices (8). Most are criminal offences.

Misleading practices (always unlawful)

Aggressive practices (always unlawful)

Criminal offences and penalties

Breaching the unfair trading rules is a criminal offence. Most offences are strict liability - the prosecution does not need to prove you intended to mislead or acted recklessly.

Penalties

Prosecution time limits

Criminal proceedings must be brought within 12 months of the date of the offence. Under the DMCCA 2024, this extends to 3 years from the offence or 1 year from discovery (whichever is earlier).

The due diligence defence

For strict liability offences (misleading actions, misleading omissions, aggressive practices, and banned practices), you have a defence if you can prove:

1. The offence was caused by one of the following:
   • A mistake
   • Reliance on information supplied to you
   • The act or default of another person
   • An accident
   • Another cause beyond your control
2. AND you took all reasonable precautions and exercised all due diligence to avoid the offence

Important: If you are relying on information from another person or blaming another person's actions, you must give written notice to the prosecutor identifying that person at least 7 clear days before the hearing.

What 'due diligence' means in practice

To establish due diligence, you should be able to show:

• Written policies: Clear procedures for advertising, pricing, and customer communications
• Staff training: Regular training on consumer protection law and your compliance procedures
• Checking systems: Processes to verify claims before making them (such as checking stock availability before advertising)
• Supplier verification: Checks on supplier claims before relying on them in your own marketing
• Complaint monitoring: Systems to identify and address consumer complaints that might indicate unfair practices
• Audit trail: Records showing you followed your procedures

Consumer rights to redress

Consumers who are victims of misleading actions or aggressive practices have civil remedies. These are currently under transitional provisions pending new regulations under DMCCA 2024.

Note: Misleading omissions do not currently give rise to consumer redress rights - only misleading actions and aggressive practices.

Consumer remedies

Discount bands

When the right to unwind has expired, consumers can claim a percentage discount based on the severity of the prohibited practice:

• More than minor: 25% discount
• Significant: 50% discount
• Serious: 75% discount
• Very serious: 100% discount (full refund)

For high-value contracts (over GBP 5,000), the discount may instead be calculated as the difference between the market price and what the consumer paid.

Enforcement

Unfair trading rules are enforced by:

• Trading Standards (local authority) - primary enforcer for local trading issues
• Competition and Markets Authority (CMA) - UK-wide and market-wide issues
• Department for the Economy (Northern Ireland)

Enforcement powers

Enforcement officers can:

• Enter and inspect business premises (at reasonable hours)
• Inspect products and take samples
• Inspect and require production of documents
• Seize and detain goods and documents as evidence
• Obtain warrants to enter premises using reasonable force

Intentionally obstructing an officer or failing to produce required documents is a criminal offence (fine up to level 3 on the standard scale).

CMA direct enforcement (from 6 April 2025)

The Digital Markets, Competition and Consumers Act 2024 gives the CMA power to:

• Investigate consumer law breaches without going to court
• Impose fines up to GBP 300,000 or 10% of global turnover (whichever is higher)
• Impose daily fines for continuing breaches
• Issue enforcement orders requiring businesses to change practices
• Order compensation for affected consumers