Who: The Competition and Markets Authority (CMA)
Where: United Kingdom
When: 16 July 2024
Law stated as at: 16 August 2024
What happened:
The UK Competition and Markets Authority (CMA) has published its final compliance advice for the marketing of green heating and insulation products, such as heat pumps, biomass boilers and solar thermal panels. This forms part of the CMA’s wider investigation into consumer protection in the sector that was launched in September 2022. It is also concurrent with its investigation into Worcester Bosch for its misleading marketing claims of its “hydrogen-blend ready” boilers (undertakings have been accepted from Worcester Bosch in the CMA’s latest update on the case).
The advice sets out compliance principles aimed at helping businesses in this sector understand and fulfil their obligations under consumer protection law, drawing on the CMA’s findings that several business practices in the sector could potentially mislead consumers. Identified concerns included presenting inaccurate and unrealistic headline price information and making unsubstantiated claims about products.
Headline price information
The advice highlights that headline price information should be accurate and comprehensive in order to give a realistic indication of what consumers are likely to pay for products. Examples of what should be included in the headline price are:
- Costs that can be reasonably calculated in advance, such as delivery and installation costs.
- Costs of any enabling works that may be required to install the product or enable it to function effectively.
- Post-purchase ongoing costs that will be incurred as an inherent consequence of owning and using the product.
The CMA also highlight that headline prices should be clear and honest, with any important qualifications being presented prominently. Businesses should also ensure that if they use a “from” price, it reflects at least a significant portion of what their customers are likely to pay, so as to not be misleading.
Businesses must also not mislead consumers about the offer or the price of a bundle of products. The CMA advises displaying individual prices a consumer would be charged, if they bought the products separately, to help the consumer assess the bundle’s value and make an informed decision. Businesses should also take care when advertising access to government funding, as this could significantly influence a consumer’s assessment of the affordability of products, but in reality only some consumers will be eligible.
Product claims
The CMA outlined the following principles for businesses in the sector when making product claims, to help consumers make informed choices:
- Have evidence. This evidence should be able to substantiate a claim before it is made.
- Explain everything the consumer needs to know. Any important qualifying information must be as close to the claim as possible.
- Take care when using “up to” claims. Such claims should reflect what customers are likely to experience.
- Be realistic, representative and don’t exaggerate benefits. Claims should be based on real-world conditions for most consumers and any comparisons must be reasonable, fair and transparent.
- Choose your words carefully. Be specific and avoid presenting overly technical information.
Why this matters
If businesses want to avoid a CMA investigation, now is the time for those in the green heating and insulation sector to review how they present their headline price information and ensure any marketing claims are substantiated by supporting evidence. Even though this CMA advice is sector specific, it should serve as a reminder for all businesses to remember their obligations under consumer protection law and check that their advertising and marketing claims are accurate and do not mislead consumers.
