Manchester Solutions

Ten Ways to Stay Off Watchdog

New regulations to protect consumers from unfair trading practices are good news for honest traders.

The Consumer Protection from Unfair Trading Regulations 2008 (CPRs) came into effect on 26 May 2008. The regulations list 31 practices that are now banned outright – these appear in full in The Consumer Protection from Unfair Trading Regulations: a basic guide for business. Here are just some of the sharp practices that the regulations will help to eliminate – and some tips for staying within the rules.

Fakers

Fakers design their products to resemble those of established brands in order to mislead the customer into believing the product has been made by the same manufacturer.

• When designing a new product, make sure it cannot be mistaken for an established brand of the same product.

Bait and Switch

Baiters tempt large numbers of customers by advertising products at low prices but do not have sufficient stock to meet demand. They then ‘switch’ the customer to a more expensive item. For example, a trader might advertise a television in his shop window at an attractive price. When consumers ask him about it, he shows them a defective sample, and then refers them to a different model of television that is more expensive.

• Make sure you have enough stock to meet the demand your offer will create.

• Give your customers plenty of time to find out more about the product and shop around for a better deal. They will come back to you if your deal is as good as you say.

Misleading claims

Do not give customers the impression that you are the only trader who offers refunds, repairs or replacements on your product.

Some traders describe their products as ‘gratis’, ‘free’, ‘without charge’ or similar when there are charges for phone calls or administration.

• Establish a good returns policy and show your customers how it works. Refund, repair or replace, but don’t claim that you are unique in doing so.

• Free means free. Do not have any hidden charges.

Promises you cannot keep

Do not make any false claims that a product or treatment can cure illnesses, disfunction or malformations.

• Clearly separate research evidence – rigorous scientific trials – from the anecdotal evidence of a few happy customers.

• In your leaflet or website, make sure the customer understands that the product may not work for them, and make clear who should not use the product or service.

Scare tactics

Some traders pressurise consumers into buying their product by suggesting that their personal security – and that of their family – is at risk if they do not buy it. This could include saying ‘Lots of people around here have been burgled’ when there is no statistical evidence that burglary is any higher in that region.

• If you believe you have a good alarm product, it makes good marketing sense to talk to your local fire or crime prevention officer. They will know whether your product is suitable for that area.

Advertorial

An advertorial is an article in the media about a product that has been paid for by the seller of the product. This practice is fine if it is clear that the advertiser has paid for the content.

• Ask your accounts director at the publication or website how your feature will be flagged up, for example with the words ‘Advertisement Feature’.

Using pester power

The Regulations cover traders who try to persuade children to buy advertised products or persuade their parents or other adults to buy advertised products for them.

• The Advertising Standards Authority offers further guidance on children and advertising.

Pyramid selling

If the consumer only benefits by introducing other consumers into the pyramid scheme, the trader may contravene the regulations.

• Establish clear terms and conditions with your agents, making it clear what the rewards are for promoting your product.

Competitions and Prize Draws

Some traders claim that their products can help consumers win games of chance. They might also offer a competition or prize promotion without awarding the prizes described or a reasonable equivalent. This could create the false impression that the consumer has already won, or that they will win, when in fact there is no prize or benefit. Asking the consumer to pay money or incurring a cost in collecting their prize also contravenes the regulations.

• The laws of gaming are complex and you need to seek expert legal advice

High pressure selling

Some door-to-door salesmen ignore requests to go away, making the consumer believe they will not leave until a deal has been done. Others pester the consumer by phone or email, and demand immediate payment when the consumer hasn’t even asked for the product.

Your customers need time and space and enough information to make their choice. Show that you respect this – if your deal is real enough, they will come back to you.

Your Business Regulation Solutions Business Adviser can put you in touch with the specialist support that will help you make sure you trade fairly and legally. Call us now on 0845 608 3388.

This article appears in the Business Support Solutions newsletter; Issue 1