Consumer laws undermined by gaps and complexity, say Law commissions

Unfair trading is prohibited by the Consumer Protection from Unfair Trading Regulations, which are known as the Consumer Protection Regulations (CPRs). But action under the CPRs can only be taken by the Office of Fair Trading (OFT) and Trading Standards Departments, which can take civil and criminal actions under them.

The CPRs leave consumers without the ability to take action directly, despite calls by consumer groups in recent years and even by members of the European Parliament to give them the right to take direct action.

The Law Commissions are reviewing the law in the area and have identified many areas in which consumers are left without a direct course of action. They said that previous investigations into alternative laws under which consumers could take action, such as laws of duress or undue influence, are too difficult for consumers to use and understand so offer them no practical protection.

"Although the current laws of misrepresentation, duress, undue influence and harassment provided private remedies in some circumstances, Consumer Focus highlighted gaps in coverage," said the Commissions' report (42-page / 210KB PDF). "Furthermore, these causes of action were strongly criticised for being overly complex and seldom used in practice."

The Citizens Advice organisation allowed the Commissions to use its data to find examples of consumers who were left, effectively, with no direct form of redress for unfair behaviour.

"Cases involving debt collection, utility providers, phone service providers, and vulnerable consumers featured prominently," the report said. "We also found that pressure selling was one of the most commonly occurring unfair commercial practices involving, for example, orthopaedic beds and training courses."

The Commissions said that second-hand car sales; mobile phone contracts; utility switching and solar panel sales were other areas in which problems were frequently reported.

"Many of the problems related to aggressive or misleading ways of obtaining payment," said the report. "This not only included collecting contract debts but also misleading or aggressive means of threatening 'civil recovery' against alleged shoplifting. We were also told of aggressive and misleading practices relating to parking, towing and clamping."

Consumer protection body Consumer Focus told the Commissions that the laws under which consumers could take direct action were not easily usable by consumers.

"Although it would appear that aggressive practices might be covered by the laws of duress, undue influence, unjust enrichment, and harassment, consumer advisers told us that in practice it is extremely difficult for consumers to succeed in these cases," said the report. "They argued that very high thresholds apply in duress, undue influence and harassment cases, and it is difficult for consumers to provide the requisite proof. In addition, the law of unjust enrichment is complex. For example, Consumer Focus said that the common law principle of restitution presents “considerable technical difficulty” for the consumer."

The Commissions said they had been told that private law does not provide protection in all the areas that the CPRs do, that there are "gaps within the current regime".

The report listed specific instances of problems with sales to consumers, including the sale of supposedly diet-aiding tea; mobile phone services with poor reception; and vehicle performance.

The Commissions said that they will publish a consultation paper next spring outlining how the law should be reformed to ensure that consumers are better protected from unfair practices and can better take direct action to protect themselves against behaviour that is unlawful under the CPRs.

"[The consultation paper] will consider how the law should be reformed to provide a simpler and clearer private right of redress for consumers who are the victims of misleading or aggressive practices," the Commissions said.

"The evidence we have been given highlights the variety of problems consumers experience. It is often difficult to state with any precision how these cases would be treated under the current law, or what remedy might be available," they said. "We will be considering whether it would be possible to draft a new statute to apply to business to consumer transactions, which would provide simpler and clearer remedies."

"It is not the role of the law to protect consumers from all the bad bargains they may make," the paper said. "The challenge will be to achieve an appropriate balance between protecting consumers from unacceptable malpractices, without encouraging consumers to abdicate responsibility for the bargains they enter."