How Effective Are the Consumer Protection from Unfair Trading Regulations 2008 - Research Paper Example

How effective are the Consumer Protection from Unfair Trading Regulations 2008 (as amended) Introduction The Consumer Protection from Unfair Trading Regulations were introduced in 2008 to enact the UCPD (Unfair Commercial Practices Directive) into law in the UK. The UCPD’s objective involves the need to harmonise in the EU, aimed at preventing business malpractices against consumers. In addition, the need for a uniform legislation is aimed at supporting internal growth within the European market. Where there is a uniform law as intended by the UCPD, it is assumed that traders can find it easier to sell their products within the EU member states. In addition, consumer confidence is bound to improve as a result of the provision of a high common standard with regard to consumer protection. In essence, the CPRs as amended in 2008 target commercial practices that takes place before, during and after a contract is finalised. The prohibitions contained in the CPRs include the commercial practices considered to be misleading and aggressive, and also 31 specific commercial practices listed under chapter 6 as banned practices. On another note, the implementation of the CPRs is to ensure that consumers are treated fairly; however, this depends on the traders’ compliance with the CPRs. Most traders engage in fair dealings with their customers and thus, there is no need to take drastic actions in order to meet the new regulations stipulated under the CPRs. The problem for the traders can only arise when they mislead or engage in the unfair maltreatment of the consumer. As such, this amounts to contravening the CPRs and a trader can face legal action from enforcement authorities1. This paper examines the effectiveness of the Consumer Protection from Unfair Trading Regulations 2008. How effective are the CPRs The main aim of the CPRs is to deter trading practices considered unfair to the consumers. Such malpractices considered by the CPRs include the practices that are prohibited in all circumstances, misleading actions, aggressive practices and the responsibility of not trading unfairly. Consumers often fall prey to the antics of traders whose main interest is to generate more profits. As such, traders often take advantage of consumer’s ignorance to exploit them. However, the enforcement of the CPRs is necessary to ensure that consumers get a fair deal from traders. There are different ways that traders have used to entice consumers to their products. This includes false exaggeration of a product’s benefit to consumers through, for instance, adverts. As such, consumers make their decisions depending on the information they derive, for example, from print or electronic media. Other than the practices prohibited in all circumstances, in other cases there is need for proof that the trader’s action affects the consumer. In this regard, the CPRs identify three different categories of consumers, and they include average consumer, targeted consumer and vulnerable consumer. In this sense, it is important to note that consumers respond to a practice in different ways2. Traders are often careful in terms of providing false information to the average consumer. This is because the average consumer is well informed regarding the products in the market. They are also keen to observe any form of malpractice from the traders. As such, the impact of the CPRs on the average consumer is minimal since they have information regarding products in the market and traders are keen not to mislead them. On the other hand, targeted consumers are those whom traders aim to sell their products to. As a common practice in a competitive marketplace, traders normally use every form of practices to entice consumers to their products. To some extent, traders tend to attract customers to their products by, for instance, misleading customers regarding a product. For example, a new product in the market normally draws the attention of the consumers and traders are often ready to pounce on the consumers’ negligence regarding the new product in the market. On this note, the CPRs are effective in terms of ensuring that the targeted consumers are not mislead regarding a new product, for instance in the market. The CPRs also ensures that traders targeting consumers for their new products protect consumers, for example from aggressive practices. Aggressive practices in this sense may involve the trader visiting a consumer and refuses to leave his or her home. This amount to a violation of privacy that the CPRs can help to mitigate to ensure traders engages in appropriate behaviours when marketing their products to the targeted customers3. Conversely, the CPRs are also effective in protecting the vulnerable consumer who can be misled intentionally into a contractual agreement with an unscrupulous trader, for instance. Traders tend to mislead customers by providing the information they want to hear. Their main intention in this sense is to make sure that the vulnerable consumer buys their products regardless of omitting some content needed by the consumer to make an informed choice. The CPRs in this regard helps consumers and responsible authorities to prevent malicious traders from taking advantage of their vulnerability. On the other hand, the considerations for practices prohibited in all circumstances also enhance the effectiveness of the CPRs. There are different practices used by traders to gain entry into a market and include, for instance, a false claim of being a member of a particular trade association. On the other hand, other traders may claim that an authorised body approves their product. As a result of such false claims consumers, for instance, find themselves using counterfeit products. Contraband goods can move from one destination to another due to false claims by traders regarding their originality.4 The European market, for instance, attract more traders from the member states and thus CPRs in the UK is necessary to ensure that consumers get quality products and prevent the entry of counterfeit products into the UK market. On another note, traders wanting to generate more profits from their products compared to the competitors normally use a number of tactics. This is evident, for instance, where the products of a particular trader are in high demand. He or she may falsely claim that the stock for the product is on the decline to increase the rush by consumers to purchase the product. CPRs, however; plays an important role in ensuring that malpractices such as misinforming consumers for personal gains are avoided by traders. Sometimes, the immediate decisions by consumers arise because of the misinformation from the traders who are eager to make more money within a short period. As CPRs creates a level playing ground where the relevant authority enforces rules regarding how traders can deal fairly with their prospective consumers5. In essence, CPRs plays a role in bringing sanity in a competitive business environment where the consumer is exposed to exploitation by traders ready to pounce on the market potential provided by high consumer spending for, example. There are some instances where traders anticipate changes in the market and make appropriate decision to avoid making losses. For instance, during shortages of particular products, traders can increase the price because the cost of acquiring such products, for example, from a foreign market is also higher. However, there are also incidents where the traders have enough stock, but because they expect the price of such products to double or triple in the future, they hide the products or close temporarily in the pretext of stock taking, for instance. However, this behaviour amount to misleading the consumers so that once the price increases, the trader can reopen and sell the same products to the consumers at a higher price to generate more profits. Other than misleading the consumer of unavailability of a product, such behaviour by the trader tends to exploit the consumer who needs protection from the relevant authorities. Further, there are various tactics used by traders to attract more customers to their products. In this regard, unscrupulous traders often target the vulnerable consumer because they are uninformed regarding a product6. In addition, the traders are aware of the vulnerability of consumers and are willing to exploit such vulnerabilities to generate more profits. For example, the false claim regarding the curative properties of a product provides unscrupulous traders with an opportunity to exploit health conscious consumers. Other tactics that traders use to mislead consumers include a promise, for instance, efficient delivery of services they offer. Most of the advertisements for products are meant to lure consumers to a particular product. However, the right product in the market depends on the responsible authority‘s vigilance to ensure that consumers get the best products and services available in the market. As such, the CPRs are effective in terms of ensuring that traders embrace fair dealings by enforcing laws that target unscrupulous traders. The CPRs also helps to minimise illicit dealings in the market that often go unnoticed or unpunished. For instance, the black market or the underground economy where there is no any legal authority to regulate business dealings. The dealings in the underground economy or the black market are mostly illegal and do not embrace the rules that apply to the legal economy, for instance. As such, consumer protection is hampered where the responsible authority does not have a direct control over the business dealings in a black market or underground economy. For example, it is in the underground economy where it is difficult to different between a trader and a consumer because they alternate their status frequently. In this regard, CPRs, is necessary to provide the rules for conducting business between the trader and consumer in a legal economy and rooting out other forms of business dealings in the underground economy7. The other schemes that traders have exploited to fleece more money from unsuspecting consumers include the pyramid schemes. Due to economic hardships most created by the economic recession, pyramids schemes emerged with a promise of ensuring that individuals can earn more by investing in the pyramid schemes. The schemes operate in the form of multi-level networking where one consumer introduces another to the scheme and continues in that sequence. The pretext in this sense is that introducing a consumer in the pyramid scheme earns a person a commission. The prohibition of these schemes by the CPRs helps to avoid the exploitation of unsuspecting consumers affected by economic hardship. In addition, the CPRs ensure that business dealings should from sale or consumption of products and not receiving compensation as a result of introducing another consumer to the scheme. The introduction of CPRs, also help to minimise numerous competitions created by traders on the pretext of awarding prizes to the winners. In some of these competitions, the trader’s main intention is to generate more income before the winner is announced. In other instances, the competition is just a false impression meant to extort money from the consumer yet there is no any prize won in the long run. Competitions that target consumers are often used to promote, for instance, a product in the market. In this case, consumers incur a certain cost in order to be involved in the competition for winning a prize. However, the genuineness of these competitions is unclear since it is the traders themselves managing such competitions rather than involving an independent body8. Consequently, CPRs ensure that such competitions are legal, and the consumers are not exploited to pump their money into false competitions meant to extort their hard-earned money. Further, some traders force consumers to buy their products by persistently nagging a prospective consumer. In some instances, traders go to the extent of manipulating children to persuade their parents to buy a particular product. These are unethical practices adopted by traders in competing in for the same market and as such, there is a need for proper regulation to ensure the consumer is protected against the trader’s malpractices such as, aggressive sale, for example. The other malpractices that CPRs helps to eradicate include unreasonable demands by traders. These demands are often used to discourage the consumer from exercising their contractual rights. There are occasions where the consumers find themselves In a ‘raw deal’, however; in order to recover their money, traders often asks for unreasonable demands which are meant to discourage the consumer further. As such, without proper regulations to protect consumers against such demands by traders, consumers will end up losing in most contractual agreements9. Without the CPRs, the cases of misleading actions and omissions, for instance, will continue to increase. This is because various traders compete for the same market and convincing consumers to their products depends on the strategy used. In this regard, some traders prefer to mislead consumers or omit certain information that can dissuade consumers from buying a particular product in the market. Prohibiting such tactics used by traders is important because the decisions made by most consumers rely on the information provided by traders regarding a product10. The average consumer often expects the trader to provide the necessary information regarding a product so that they can make an informed choice. However, because traders know that providing the correct information can lead to losing of profits, they decide to omit certain information that does not resonate with the consumers, for instance, the side effects of the product. The CPRs is critical in this sense because it plays a role in safeguarding the wellness of consumers who are susceptible to misleading actions by the trader. Without the CPRs, there will be more questionable products in terms of quality and an increase in malpractices meant to deceive the unsuspecting consumer. In this regard, consumer protection is necessary in a market where there are similar products competing for the same consumers, for example. On the same note, having regulations to prohibit malpractices by traders ensure that the consumers get quality goods and services for their money11. Conclusion The CPRs is effective because it prohibits most of the malpractices that traders are using to lure customers to their products. The regulation also brings order in the manner in which traders engage consumers as compared to a marketplace where such rules lack. Over the years, different malpractices have emerged that targets the consumers without any proper legal mechanism to control such malpractices. As such, traders have continued to exploit the unsuspecting consumers with an aim of generating more profits for their businesses. Some of the malpractices that are covered by the CPRs include misleading actions and omission that is a common practice among traders competing for the same consumers. The traders tend to mislead the consumers because they do not want their products to loss market because of a negative publicity. As such, they omit the information considered counterproductive for marketing their product. In essence, consumer protection regulations ensure that consumer’s rights in a contract are upheld, and they are entitled to quality goods and services in the market Bibliography Buck, H., ‘Current status of consumer law within European Union’, Journal of Economics & Management, Vol. 9, no. 3, 2012, pp. 69-85. 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