Just as we’re getting used to the Consumer Protection from Unfair Trading Regulations, along comes another UK government consultation on consumer protection. For Nick Johnson’s take on the new BIS Consumer White Paper, and what this means for advertisers.
Who: Department for Business, Innovation and Skills (BIS)
When: July 2009
Law stated as at: 3 August 2009
The Department for Business, Innovation and Skills (BIS – formerly "BERR") has issued a 102 page White Paper outlining its proposals for reshaping consumer protection legislation.
The document ("A Better Deal for Consumers – Delivering Real Help Now and Change for the Future") focuses on four main themes:
- help for vulnerable consumers;
- consumer credit;
- better enforcement and information for consumers; and
- modernising consumer law.
Key highlights for advertisers include the following proposals:
- a new approach to enforcement that encourages businesses to compensate consumers appropriately for consumer protection law breaches;
- the appointment in 2010 of a new "Consumer Advocate" to champion the cause of groups of consumers who have suffered a loss at the hands of a business, and who would have rights to bring collective action on behalf of consumers – a form of "class action";
- a new strategy and a new specialist team for internet enforcement on consumer issues;
- implementation of the Consumer Credit Directive, including new disclosure requirements;
- greater clarity as to how consumer laws apply to digital products;
- a review of the law on misrepresentation and duress; and
- implementation of the proposed EU Consumer Rights Directive.
Why this matters:
While the changes set out in the document are still only at proposal stage, they may be a good indication of which way the wind is blowing.
In particular, the proposal for a Consumer Advocate is one to keep tabs on. This development could significantly increase the risk associated with advertising claims that are not fully substantiated. Under the current regime, the prospect of individual consumers seeking to sue on an individual basis for misrepresentation can often be regarded as a low or even negligible risk, the new proposals raise the prospect of a potential form of class action litigation. So for a category of issue where to date the key risk may have been an upheld ASA adjudication, all of a sudden there could be a major financial risk too. This will make the need for proper legal clearance of advertising claims more acute than ever before.