The Consumer Protection from Unfair Trading Regulations introduced into UK law, for the first time, a general obligation on traders not to treat consumers unfairly. Within this general prohibition are certain more specific requirements. Traders may not mislead consumers, by action or omission. Nor may they engage in aggressive practices.
Traders only breach the general prohibition, or the obligation not to mislead or act aggressively, if their acts affect the economic behaviour of the consumer. However, the Regulations also set out 31 specifically banned practices. These will always be unfair regardless of their effect upon the consumer. One of the “always unfair” practices is:
“Making an invitation to purchase products at a specified price without disclosing the existence of any reasonable grounds the trader may have for believing that he will not be able to offer for supply, or to procure another trader to supply, those products or equivalent products at that price for a period that is, and in quantities that are, reasonable having regard to the product, the scale of advertising of the product and the price offered (bait advertising)”.
The Advertising Standards Authority has upheld a number of recent complaints on the basis of sections of the CAP Codes which were amended to be consistent with the Regulations. Also, in July 2008, an Enterprise Act Order was made in the Salisbury County Court against a small firm of rogue builders on the basis of the Regulations. However, on 6 January 2009 it was reported in The Independent that Liverpool Trading Standards officers are to investigate complaints that Tesco engaged in bait advertising in breach of the Regulations.
The complaint about Tesco was made by Rosie Cooper, MP for West Lancashire. She had tried to buy a litre bottle of Baileys, which had been advertised as having been available for £8, from a Tesco store in Liverpool, but was told that the product was out of stock. She then found that the product was out of stock at a further two stores. She told The Independent that, when she contacted Tesco to complain, their customer services team acknowledged that stores had not received much stock of the product.
Tesco later said that these comments were incorrect and insisted that there was plenty of stock ordered for customers across the country – though no explanation was reported as to the inconsistency between this claim and Ms Cooper’s experience.
Apparently Tesco has said it is also addressing another complaint from Ms Cooper, namely that Jacob’s Creek wine was on offer advertised for £3 but was being sold for £6.
The breach of the Regulations of which Tesco is accused carries both civil and criminal liability. If Tesco were found criminally liable under the Regulations its directors and managers could therefore be personally liable for significant fines or potentially even imprisonment. However, the level of liability would depend on the severity of the breach and whether the practice was widespread.
Comment
The implementation of the Unfair Commercial Practices Directive into UK law caused considerable interest, but, 8 months on, relatively few complaints have been made under the Regulations. However, Trading Standards have been expected to launch an investigation into a high-profile target to draw attention to the Regulations and to act as an example to others. Few companies have a higher profile than Tesco, so this complaint will offer Trading Standards that opportunity.
A criminal prosecution, let alone personal criminal liability for the company’s managers, appears unlikely. However, there is a real risk of civil proceedings and of an adverse ASA adjudication. Tesco has already suffered the adverse consequences of a negative story on the front page of a national newspaper. This incident not only highlights the importance of being aware of, and observing, the obligations placed on traders by the Regulations; it also emphasises the need to train staff on their implications, in order to avoid the risk of misleading and/or potentially embarrassing comments such as those allegedly made by Tesco’s customer services department.
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