Beware of misleading tactics
In previous articles we have discussed the impact of the Consumer Protection from Unfair Trading Regulations (the "CPRs"), and the amendments which came into force in October of last year. The CPRs designate as a prohibited practice any activity by a trader which may be classed as a misleading action - that is, a practice which contains false information and is likely to cause the average consumer to take a transactional decision that he or she would not have otherwise taken.
This week, the Competition and Markets Authority (CMA) issued a well-publicised response to a super complaint from Which?, on activities undertaken within the supermarket industry, and highlighted various examples of pricing and promotional practices which could potentially be in breach of consumer law. The response from the CMA highlights the key misleading practices and reinforces why businesses dealing with consumers need to provide clear pricing information, in order to avoid falling foul of the CPRs.
Two of the key areas of concern for the CMA were:-
- So called "was/now" promotions, where an allegedly "new" reduced price is compared to a price charged previously. The CMA found that in many cases the period for which products were sold at the higher price was actually shorter than the period of the reduced price, such that the comparison to the higher price was artificial and misleading.
- Unit pricing. The CMA identified various practices by supermarkets which led to confusion around the unit price, such as bulk offers where the price per unit was actually higher than the individual sale price of the item (for example, six cans of sweetcorn for £3.50 when an individual can cost only 50p). Similarly the CMA found practices which made it difficult for customers to identify between the different unit price of items because different units of measurements were used; for instance, some bottles of tomato ketchup were priced "per 100ml", whereas others were priced "per 100g".
The response from the CMA notes that where there is evidence of breaches of consumer law, this could lead to enforcement action.
The CMA will continue to work with businesses to seek to eliminate promotional practices which could mislead consumers and has recommended that the Department of Business, Innovation and Skills should publish best practice guidelines on unit pricing.
The CMA response demonstrates how pricing and accurate information continues to be at the forefront of the Consumer Protection regime and shows that business in all sectors dealing with consumers should avoid poor practice that could potentially confuse or mislead customers.
This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.