Consumer Law in United Kingdom - Essay Example

? Consumer Law Consumer Law “In pursuing its twofold aim – to protect consumers and to ensure that honest traders are able to makea living on equal terms without the need to resort to the malpractices of their dishonest competitors – Parliament has increasingly turned to the sanctions of criminal law” (Lowe, R and Woodroffe, G Consumer Law and Practice 6th Edition, Sweet & Maxwell 2005 p233) Very many companies today use awkward tactics to make sales. These range from closing down sales that they let to run for as long as possible, to the special offers that do not really exist (Denis 23). Nonetheless, some of the offers they usually make are quite genuine. However, the way the sales are made to the customers usually leaves the customers perplexed and wondering what the salespersons are aiming. A sales man or woman may stay for very long, up to hours waiting for a customer or client to make a subscription and then go ahead to tell the customer that his or her income depends on the client paying up1. No sound for alarm, though, because ever since 26th may 2008, laws have been put in place with the aim of militating against such practices. Consumer protection from unfair trading regulations 2008 (CPRs) have made it possible for the protection of consumers from exploitation, and unfair treatment through misleading omissions, misleading actions, or other aggressive practices that businesspersons engage in (Denis 81). Misleading actions according to the consumer protection regulations are such practices such as marketing or advertising goods that do not really exist in the first place. Businesspersons also offer also usually make advertisements of items that they do not really have enough of in their stock. This means they create excess demand for the little goods they have in their stock. This practice of advertising a commodity with no aim of meeting its demand is a misleading action on the part of the traders and sales persons. The consumer protection regulations also prohibit traders from lying about the goods they have, or marketing them to consumers as another product, in order to gain credibility. In any case, a trader has signed a code of practice, he or she should stand by it and obey it to the later, failing to do so; failing to follow the code of practice may result for charges on the grounds of breach of the Consumer Protection regulations (Woodroffe 82). Misleading omissions on the other hand, applies to the act of traders being very economical with the truth about their products, or deliberately leaving out information that customers need in order to make decisions that are well informed. Under these consumer protection regulations, it is the responsibility of the traders to make sure information about the products they sell reaches the consumers and customers at the right time. Timeliness is important in business. This ensures that information gets to consumers when they really need it; and not very late, that they can no longer use the information (Sealy 54). The aggressive practices are the sales tactics that really influence the process of decision making of consumers and customers in general. ThiAQAs means that the traders who ‘force customers’ to make decisions through threatening behavior, and do not give consumers breathing space, will be, under the regulations of consumer protection, committing an offence. In practicing these consumer protection regulations on traders, it is not just enough to demonstrate the deed. The accuser has to show that the consumer’s decision was indeed, influenced by the practice the trader is guilty of doing. The new rules set out by the United Kingdom to govern consumer protection against traders who are rogue came into effect in 2008. For the first time in the history of the United Kingdom, traders will not be allowed to trade unfairly to their customers. This does not mean that they will be restricted from making their own profits as they would; they are only required to follow the guidelines stipulated by the consumer protection rubric. The law only aims to tackle the aggressive tactics by traders as well as the false closing down sales promotions by traders. Among the businesses affected are fortune telling, astrology, as well as mediums. For them to operate, they will be required to provide proof that the services they provide are simply for the purposes of entertainment2. The laws and regulation outlaw 31 sales practices including harassment by sales clerks and coercion (Woodroffe 82). While these new laws only serve to protect the vulnerable consumers and customers from the harassment of rogue sales clerks, it will affect the sales revenues of many companies in the United Kingdom. The consumer protection legislation outlaws the use of information, even if they are facts, in convincing of customers into making decisions to spend on products that they would otherwise subscribe to, or buy, had they not had the opportunity of hearing or accessing the information. Apart from protecting innocent and vulnerable consumers from harassment and aggressive practices by sales clerks, the laws of consumer protection also outlaw customers or consumers from giving false product reviews that mislead other customers. A consumer found giving out false information on a given product would face criminal charges. This is the only way that these guidelines will take root. The legislature in the United Kingdom designed the laws and regulations in this way to ensure that traders take after them quickly enough. Even though there are few standards officers to police the process of implementation of these laws and regulations, the threat of jail term in the event of forfeiture of these rules will ensure that the consumer protection regulations make traders act fairly to consumers to the later. The strictness of these sales rules and regulations will affect many businesses and some of these businesses and companies may decide to follow the ways of rogue companies in order to meet the targets affected by the implementation of the new laws. This is what the government authorities have to take into account while enforcing the laws. It is good to protect consumers from rogue traders; but what happens when customers take advantage of innocent traders and try to exploit them. That said, a balance has to be maintained on the interests of customers and innocent hardworking traders who have to earn a living in the proper way have to be put into consideration too. Every other person should be equal in the face of the law3. That said, the law should be stipulated a way as to put the interests of every stakeholder in consideration. Lowe and Woodroffe discuss the civil laws that impose obligations on suppliers. These include the basic duties of delivering goods contracted for, passing titles, delivering goods with the right quality, and delivering the goods and services at the right time as some of the regulations traders have obey and ensure they follow if they wish to remain in business with no problems. They also look at irregular business practices by traders and ways by which consumers can seek redress in any case they do not receive the fairest of services from the traders they buy things from (Woodroffe 82). “Until the passing of the Consumer Credit Act 1974 the law developed in a fragmentary and piecemeal fashion – following rather than leading, checking abuses after they had come to light rather than laying down ground rules in advance.” (Lowe, R and Woodroffe, G Consumer Law and Practice 6th Edition, Sweet & Maxwell 2005 p338) It had been at least 40 years since the legislature in the United Kingdom last amended the laws that govern consumer satisfaction and trade. The consumers were always at the mercies of the traders whenever anything went wrong in the process of transacting and doing business. Before the consumer credit act of 1974, the credit industry was developing at a very slow rate. The credit act was the most elaborate and the most developed regulation in Europe. At the time, only three companies were offering credit services and only a single credit card company was in operation at the time. At its inception, however, it faced problems in regulating the credit industry. It needed to be amended in order to keep up with the fast changing credit and financial times of the 1970’s and the 1980’s. There was a dire need to reform the act in order to meet the demands of the market. There was a public outcry for the government to make changes to the act but the government ignored the requests. Various bodies and groups made formal requests and reports until as late as the 1990’s but the government did not let on its resolve to stay put and made no changes to the credit act (Goode 26). Finally, years later when people got tired of asking the government to improve the credit act of 1974, a research company called DTI did a research on the credit industry. It then went ahead to make a request to the government to make changes to the consumer credit act. The United Kingdom government finally had to give into the pressure and took in the proposition. It made a consumer credit bill that moved between the House of Commons, and the House of Lords for review. The consumer credit bill featured a great deal of improvements from the consumer credit act of 1974. The enhancements were mainly in advertising of consumer credit by credit firms, licensing of creditors, and finally the provisions on credit bargains that were extortionate. The bill drafted by the legislature was due to pass into law by the last part of the year 2005. The consumers’ credit act of 1974 allowed law courts to be able to cut open agreements between creditors and consumers. These agreements featured what came to be called ‘extortionate credit bargains’. Under the agreements, the courts never intervened in matters that involved people being extorted huge loads of cash because of bad bargains on the contracts they made with companies and banks. Before the bill became law, law courts would not make any form of intervention whatsoever regarding contract disputes. In these disputes, consumers were made to part with massive sums of money while the courts of law turned a blind eye. However, in the new consumer credit agreements, things are better for customers and credit holders. The law courts now have the power to review all credit terms in any case there are disputes of any kind. While reviewing the credit terms, the courts of law can dictate the terms of payment of credit that it deems fit the consumer can pay with no problem; comfortably. Under the 1974 act, it was very difficult to find an agreement extortionate. Very few cases succeeded in courts on these grounds. Over a period of 30 years, only 10 cases were successful in court. Very few, if not none at all, complained about the extortionate credit. The new bill is more lenient to consumers. This is in terms of the way in which consumers enter into contracts and the manner in which they carry on to repay the debts they take in terms of the contracts. In theory, the bill makes it easy for customers to be able to reopen contracts that feature unfair terms of payment and the payments that they make to the credit lenders. Associations and the consumer groups that are concerned with the bill were happy with the new bill but the elections interrupted its implementation into law. For now, the 1974 Consumer Credit Act suffices as the only regulatory statute that governs credit matters to consumers4. The 1974 Consumer Credit act is divided into 12 different sections. It is designed in a way that provides very comprehensive rules that regulate consumer credit and every other aspect of credit granting operations. The first part of the act is the Director General of fair Trading that was created in the year 1973 by Fair Trading Act. This director has the responsibility of monitoring matters of consumer credit, even though this was not part of his duties at the time of appointment by the government. The act of parliament gives the general director of the fair-trading the roles of administering the system of licensing that the Act set up. The director general also supervises the working process and the enforcement of the Act of parliament and all the regulations that accompany it (Goode 26). Part 2 of the act is about the hire agreements, credit agreements, and linked transactions. It has the definitions of the many different types of covenants and agreements that the Act covers. Based on these regulations, there are three major types of agreement; regular consumer-hire agreements, regulated consumer credit agreements, and finally, the partially regulated agreements. You work for a firm, which installs burglar alarms in houses, and your employer has asked you to write a critically analytical report for employees of the firm, which includes legal references indicating: (i) What statutory protection is given to your firm when it buys materials from suppliers. (ii) What statutory protection is given to customers for whom your firm works? The United Kingdom commercial law regulates the purchase and sale of goods in the process of doing business in the United Kingdom. The sale of goods act of 1979, is an act of the United Kingdom parliament, which has the responsibility of regulating the English contract laws as well as the UK commercial law. This is in terms of regulating the terms by which people buy and sell goods and services in the United Kingdom. The act of parliament makes sure that the terms stated in the sales of goods act of 1893; subsequent legislation are also included therein (Goode 26). Over the years since the inception of the act of parliament, there have been various statutory changes to the sales goods act of 1979. There have also been various additions to the act to make it better in serving the people of the land. The act is relevant in any transaction or business practice that involves the transfer of products, which could be goods or services that are exchanged for some form of monetary consideration5. Commercial law is sometimes called business law in the United Kingdom. This is the branch of civil law that has criminal components. All businesses in the United Kingdom have to comply with commercial or the business law in order to make positive progress in business. Failure to comply with these rules of the law, like failure to follow tax laws to the later results in a customer or a consumer facing charges of the law (Goode 26). These laws are made to protect both parties that are involved in business at any one time or another; in daily operations, and with customers who buy from traders too. Any goods or services sold have to be regulated using these terms and statutes so that both parties are happy at the end of the day. The consumer protection act, for a start, is a legislation that is a provision passed with the aim of administering the rights of consumers within a given marketplace in a country. In this perspective, therefore, commercial law and consumer law co-exist in various roles so that both customers and the company selling those products can operate within the scope that the laws define in the commercial market place (Flint 37). The consumer protection act that ensures the rights of all the parties involved in business deals and transactions make consumers aware of their rights and know them in order to avoid conflicts. The consumer rights also protect consumers to ensure that the legal practices, as well as the ethical practices in business are well in place, and both the traders and customers practice them without any problem. At the commercial market place, consumer protection act operates differently depending on the person it protects. At the market place, there are consumers and suppliers. Within the perspective of this market place, the legislation, the roles, the requirements, and the statutes are very different depending on the roles they play on suppliers and consumers (Goode 16). When the firm is buying goods from the suppliers, it is buying as a consumer. Therefore, in this regard, the firm is protected by the consumer protection act of parliament. All the statutes of the consumer protection act apply to the firm as it goes about the purchase of the items it need from the suppliers. In addition to this, contract laws also protect the firm. This is assuming that the firm enters into a contract for the supply of the goods from its supplier6. In this light, therefore, the firm should also take into account the requirements of commercial law statutes apart from the consumer protection act (Woodroffe 82). Similarly, as the firm supplies its products to its customers, it is just as paramount that it obeys and follows the statutes of both commercial law and consumer law. This time around, however, they are the suppliers, while the people who buy the locks are the consumers and are therefore under the protection of the consumer protection act. Trade rules and regulations also apply in this case. Contract laws are in place to ensure situations do not go out of hand. Contracts represent the agreements that the parties have in doing business together. All parties have the responsibility of making sure that they obey the contract laws to the later; contract laws are very important in business deals. The binding nature of contracts makes it easy to regulate deals. Anybody who violates the rules is liable for punishment, which under these laws is payment of heavy fines and could sometimes lead to jail terms if there is some form of wrongdoing. Fair trading rules and statutes also apply when a business transaction or a deal is in the offing. As a company, it is only fair that customers are treated well if the same treatment is expected from the suppliers. Nancy and Edwina have just returned from a holiday in Italy and are complaining about a catalogue of disasters, which occurred when they were going for their trips. Among the disasters, that the two had while in holiday is that when they got there their operator transferred them to a less attractive holiday resort. This is not they had planned for when they decided to go for the holiday trip in Italy. Given this fact therefore, they did not get what they wanted; they have to seek redress for the wrongs against them by the hotel. They can file a protest in court and file a suit against the hotel for breach of contract under the consumer protection act. The hotel is not treating them well by letting them know at the last minute that the hotel they had planned to stay in is not available because it is full. They should not book holiday goers into hotel rooms that they know cannot meet the demands they advertise (Norwood 28). The airline delayed their flight due to strike that was happening. They cannot blame the airline for this because they are not in control of the actions of what happens when there is industrial action by British air traffic controllers they can only wait for the whole situation to go back to normal and then take the flight. However, they may sue the airline for booking them into a lower class hotel than what they paid7. This is especially possible if they have evidence of making payments to the airline and the hotel they were booked into; they have a right to get what they bought. Nancy and Edwina also have a chance at suing for breach of contract against the hotel. They paid for a whole holiday package that includes free excursions. The hotel has misled them by advertising for something they did not offer them. The consumer protection act 2008 also covers this and they can seek redress through it. Bibliography Al-Balushi, R 2005, The Consumer Credit Bill Has Been Abandoned, viewed 28 February 2012, < HYPERLINK "http://www.blue-chi.com/2005/the-consumer-credit-bill-has-been-abandoned/" http://www.blue-chi.com/2005/the-consumer-credit-bill-has-been-abandoned/ >. BBC News 2008, New rules for consumer protection , viewed 27 February 2012, < HYPERLINK "ttp://news.bbc.co.uk/2/hi/business/7416809.stm"http://news.bbc.co.uk/2/hi/business/7416809.stm >. 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Which? 2012, Consumer Protection from Unfair Trading Regulations 2008 , viewed 27 February 2012, < HYPERLINK "http://www.which.co.uk/consumer-rights/buying-services/consumer-protection-rules-2008/the-law-explained/" http://www.which.co.uk/consumer-rights/buying-services/consumer-protection-rules-2008/the-law-explained/ >. Woodroffe, G 2007, Consumer Law and Practice, 7th edn, Sweet & Maxwell, London. Read More