The consumer into a contract4 as seen

The
Consumer Protection (Amendment) Regulations 2014 (CPR) 1 came into force on 1
October 2014 which reforms the existing law on unfair commercial practices such
as misleading and aggressive selling. The CPR amended the Consumer Protection from Unfair Trading Regulations 2008
(CPUT)2.

The
problem with the CPUT is the clarity of the rights of redress that are
available. Consumers could only rely on misrepresentation, duress and undue
influence if they wanted to enforce the rights themselves. This is problematic
as consumers often find it difficult to comprehend as they are quite technical.
These areas were initially used in transactions between businesses which is not
ideal for consumers. Also, previously consumers could not directly enforce the
CPUT as it could only be enforced by the Competition and Markets Authority and
Trading Standards.3

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A
misrepresentation is a false statement of fact made that induces the consumer
into a contract4
as seen in the case of Spice Girls Ltd.5 Misrepresentation
has loopholes such as there is no remedy in the cases of misleading prices and
actual contract must have existed. Next, statements as to the future are not accepted.67 Although rescission can be
obtained, it does not cover repayment of anything that is not the actual
contract price.

Duress
requires a contract that has an element of illegal threat.8 There is no protection for
consumers when aggressive selling or enforcement is used such as pre-contractual
threats causing expenditure or repayment of debt. It has limited scope where it
cannot be used to catch obstructive behaviour such as not answering consumer’s
calls. The equitable doctrine of undue influence requires a special
relationship of ‘trust and confidence’.9 In Allcard v Skinner,10
although there was undue influence, she could not recover due to her delay. It
will materially affect possibility to obtain relief if they neglect their
rights knowingly.11 This rule is usually used
to protect businesses from liability and is unlikely to establish in business
to consumer transactions. They both have no damages available for economic
losses or distress.

The
Unfair Commercial Practices Directive (UCPD) 200512
concerns unfair business practices in EU law. It requires member states to
control these practices through public enforcement. It is implemented in the UK
by the CPUT. The UCPD does not require that there be private law rights for
those affected by these practices although it does not prevent Member States
from giving them.13
Osuji argues the UCPD are unable to ‘resolve disparities in national laws’
because of ‘a lack of clarity of concepts and the existence of uncertain
substantive and enforcement provisions.’14 Koutsias and Willett submits
that the UCPD can potentially ‘increase levels of consumer protection in the
UK.’15
Nonetheless they admit there is no certainty as to the ‘ethic of fairness’ that
will be implemented in the UK.16 Question arises whether
is it necessary to introduce private law rights based on the UCPD as
inconsistency between the public and private realm can be confusing. The Law
Commission considered this issue, which lead to the CPR 2014.17

The
CPUT has different categories of prohibition. Schedule 118
contains examples of conduct which are the black list of prohibited practices. Reg.5
sets out when action would be considered as misleading.19 This provision is wider
than misrepresentation as it covers both existing fact and future statements.20 It offers higher
protection as it covers situations even if it is only likely to deceive.21 The remedies available
are damages, unwinding which also applies to situations of no contract, and
discount. Reg.7 sets out when commercial practices are deemed as aggressive.22 This covers similar
things covered under duress and undue influence but its scope is much broader.
There is no need for an illegal act to break a contract or a need for special
relationship. The remedies available are unwind, damages and discount.
Consumers can also claim for distress.

Essentially,
the CPR will provide higher consumer protection by allowing consumers to
enforce their rights directly against the trader.23 The main premise is to
introduce rights of redress to those who have been victims of aggressive
practices the entitlement to unwind, discount and damages.24 To enforce the rights to
redress the consumer must first enter into a contract. Second, the trader must
engage in a prohibited practice. Third, it must be a significant factor in the
consumer’s decision. Lastly, the consumer must satisfy any specific conditions
applicable.25
Regulation 27B allows remedies to apply to contractual and non-contractual
situations when payments are made.

Where
the consumer succeeds in proving the considerations in Reg.27A, the following
remedies are available. The consumer has the right to treat the contract as
void within 90 days of the contract being entered to or the goods or service
being delivered.26
Next, the consumer can receive a discount on the price payable under the
contract.27
The 90-day limit does not apply here, and the deductions ranges from 25% to
100%, which increases incrementally by 25% depending upon the seriousness of
the breach.28
Finally, the grounds for right to claim damages are various, such as the
financial loss suffered, distress, physical inconvenience or discomfort that
the consumer has suffered.29

Nevertheless,
these recent reforms have limitations such as privity of contract restrictions
and trader’s fault is required for damages30. Trader escapes
accountability for manufacturer’s statement which is not entirely fair as
trader still profited from the promotion. Moreover, manufacturer is not liable
for his statements. Consumers were still affected and it would be unfair to not
have redress. If there is a case for damages even without fault, this could be
an incentive for trader to be more careful. There is also no remedy for
misleading omissions.31 It is also restrictive as
there needs to be a ‘significant factor’ for contract or payment.32  Plus, the interoperability of the 2008 and
2014 Regulations can be confusing.

In
conclusion, the CPR 2014 definitely offers a huge improvement on consumer welfare
but it is far from perfect. As time progresses, it is vital that policymakers continue
to develop new regulations which increases the scope of rights to consumers.
Only through constant reforms can consumer protection be maximised to reflect the
economic and technological growths in society.

1 Consumer
Protection (Amendment) Regulations 2014/870, No. 870

2 Consumer
Protection from Unfair Trading Regulations 2008, No. 1277

3 Fair
Trading Act 1973, c. 41, s 17(2), s 26

4 M Furmston, Cheshire, Fifoot and Furmston’s Law of Contract (16th
edn OUP, 2012) 339

5 Spice Girls Ltd v Aprilia
World Service 2000 EWHC Ch 140 

6 M Furmston, (n 70) 341

7 Maddison v Alderson (1883) 8 App Cas 467 

8 M
Furmston, (n 70) 389

9 M Furmston, (n 70) 400

10 Allcard v Skinner (1887) 36 Ch D 145

11 M Furmston, (n 69) 401

12 Unfair Commercial Practices Directive 2005/29/EC

13 ibid, Art 3(2)

14 O Osuji, ‘Business-to-Consumer Harassment, Unfair Commercial Practices Directive
and the UK- A Distorted Picture of Uniform Harmonisation?’ (2011) 34(4) Journal of Consumer Policy 437-453

15 M Koutsias and C Willett, ‘The
Unfair Commercial Practices Directive in the UK’ (2012) 5(4) Erasmus Law Review
237, 248

16 ibid, 251

17 Law Commission Report, Consumer Redress for Misleading and
Aggressive Practices, (Law Com No 332, 2012)

18 CPUT 2008, Schedule 1

19 ibid Regulation 5, Para 2

20 ibid Regulation 5, Para 4(c)

21 ibid Regulation 5, Para 2(a)

22 ibid Regulation 7, Para 1, 2

23 ibid Regulation 2(1) ‘commercial
practice’

24 CPR 2014, Regulation 27K

25 ibid Regulation 3 Part 4A

26 ibid Regulation 27E (3)

27 ibid Regulation 27I

28 ibid Regulation 27I (4)

29 ibid Regulation 27J (1)(a), (b)

30 ibid Regulation 27J

31 CPR 2014, Regulation 27B

32 ibid Regulation 27A (6)

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