New Regulations Extend Protection against Unfair and Misleading Business Practices

On 26 May 2008 two new sets of regulations came into force in the UK which, together, represent the biggest overhaul of consumer protection legislation in nearly 40 years. The Business Protection from Misleading Marketing Regulations 2008 ("Business Protection Regulations") and Consumer Protection from Unfair Trading Regulations 2008 ("Consumer Protection Regulations") now provide a comprehensive regime for dealing with all sorts of unfair commercial practices. They introduce into our law the requirements of the EC Unfair Commercial Practices Directive, passed in 2005.

The Consumer Protection Regulations comprise three main prohibitions. First, a general prohibition against unfair commercial practices that fail to meet a due diligence test and affect a consumer's decision making. Second, misleading acts, misleading omissions and aggressive practices. Third, a blacklist of 31 practices, such as bait advertising and falsely describing a product as "free", which are automatically unfair and, for the most part, illegal. "Commercial practices" is an all embracing phrase covering anything that a business does (or fails to do) which is aimed at generating sales.

The Business Protection Regulations consolidate existing laws governing misleading and comparative advertising. They prohibit misleading advertising by a business which is liable to harm competitors, and re-state the conditions which must be met if comparative advertising is to be permitted.

As with previous consumer protection legislation (much of which falls off the statute book, to be replaced by this new comprehensive regime) the regulations involve criminal sanctions, and will be enforced by the OFT and local authority Trading Standards.