Who: Chartered Trading Standards Institute
Where: UK
When: Consultation closes on 5 January 2016
Law stated as at: 19 November 2015
What has happened?
The Chartered Trading Standards Institute (“CTSI”) has published its long-awaited revised version of the PPG in draft (the “Draft PPG”). The intention is that this will replace the previous PPG, published by BIS in November 2010 (the “2010 PPG”), following a consultation period which closes on 5 January 2016.
Why this matters
The purpose of the 2010 PPG was to provide guidance on how to practically comply with the Consumer Protection from Unfair Trading Regulations 2008 (“CPRs”). The CPRs are designed to protect consumers from unfair trading practices, such as misleading promotions, aggressive sales techniques and omitting key pricing information.
In breach of the CPRs therefore would be using “RRP” where the product has never been sold at that price or advertising a promotion as ending to encourage sales and then extending the sale. Eagle-eyed viewers of The Apprentice will have spotted Karren Brady recently pulling up one of the teams for misusing the term ‘RRP’!
Compliance with the CPRs is important for businesses who want to operate in the consumer retail industry because Trading Standards and CMA are increasingly taking action against businesses for infringements. Organisations like Which? are also becoming more active in calling out non-compliance. Infringements, or even allegations of infringement, bear not only regulatory risk, but reputational risk too.
However, the 2010 PPG has been subject to growing criticism that it was not fit for purpose as it gave businesses the impression that they could comply with the CPRs by following certain guidance, such as the ’28 day rule’. In reality, as recent ASA rulings have shown, this does not necessarily guarantee compliance if, looked at in the round, the communication incorporating the claim is still an “unfair trading practice” as defined by the CPRs.
It was therefore felt necessary to revise the 2010 PPG, and the CTSI was tasked with engaging with key stakeholders and carrying out a review. The result is the Draft PPG, which will likely be finalised in early 2016.
When the Draft PPG is finalised, this will become the new guidance for businesses to familiarise themselves with and look to adhere to, in order to achieve compliance with the CPRs when making price claims.
What are the key changes?
The Draft PPG is markedly different from the 2010 PPG.
The focus has shifted from specific rules under the more prescriptive 2010 PPG towards a broader, principles-based approach The CTSI consultation note states that this is in part because the 2010 PPG “has the appearance of offering safe harbours which the law does not provide”.The ’28 day rule’ is one such alleged “safe harbour“.
Specifics are reserved for the last two sections, which comprise “Illustrative examples” and “Actual Examples” such as ASA rulings.
Next steps for businesses
Businesses may wish to consider submitting a response to the consultation, which can be found here.
Businesses will also need to consider how they can ensure that their sales and promotions are fair when looked at in their entirety, as opposed to relying on the previous ‘safe harbours’ like the 28 day rule.
