Unfair commercial practices encompass a number of strategies used by traders to sell their products or services in a manner that may go against the interests of the consumer. A trading practice is unfair if it is likely to impair a consumer’s ability to make an informed choice or leads a consumer to buy a product or service which he would not otherwise have purchased. Essentially, any action that distorts the economic behaviour of the average consumer is in fact an unfair commercial practice. The EU deals with these practices through its Directive on Unfair Commercial Practices (Directive 2005/29/EC), the provisions of which were transposed into Maltese law through the Consumers Affairs Act (Chapter 378 of the Laws of Malta). Unfair commercial practices are generally classified as misleading or aggressive practices.
A misleading commercial practice is one that contains false information, or one that could, in any way, deceive the average consumer and as a result of which, the consumer to make a decision which he would not have otherwise made. A practice could be misleading due to the way it is presented, even if it is factually correct. Article 51C lists a number of elements in relation to which a practice could be considered misleading, including the nature, existence or characteristics of the product, the extent of the trader’s commitments, the price or how it is calculated, the need for a service, part, replacement or repair, or the consumer’s rights. A practice is also misleading if the manner in which it is marketed causes confusion with any products, trademarks, trade names or of a competitor, or if a trader fails to comply with commitments contained in codes of conduct by which he has undertaken to be bound.
Article 51D makes it clear that even the omission of important information is a misleading practice, as a result of which the consumer makes a decision which he would not have otherwise made. Furthermore, if the trader does provide such information, but in a way that the consumer is unable to understand it or if he presents such information in an ambiguous manner, that is also misleading.
In addition to prohibiting misleading practices in general terms as described above, the Consumer Affairs Act also lists those actions which are blacklisted outright as misleading in First Schedule. These are the following:
- Falsely claiming to be a signatory to a code of conduct;
- ‘Bait advertising’, where customers are invited by a trader to purchase products at a specified price without indicating whether he is actually in a position to deliver such goods, or if the trader shows a faulty sample of a product with the intention of promoting a different product;
- Falsely claiming that a product is able to cure illnesses;
- Describing a product as being ‘free’, if the consumer actually has to pay something other than the cost of replying to the trader and collecting or paying for delivery of the item;
- Stating or creating the impression that a product can legally be sold when this is not the case; and
- Seeking payment for a product that the consumer has not ordered.
An aggressive commercial practice is one that significantly impairs a consumer’s freedom of choice, through harassment or coercion, as a result of which he makes a decision which he would not have otherwise have made. Article 51E states that in determining whether such practice is aggressive, account is taken of the timing location, nature or persistence, the use of threatening or abusive language or behaviour, the exploitation by the trader of any specific misfortune or circumstance which is grave enough as to impair the consumer’s judgement, or any threat by the trader to take any action that cannot legally be taken.
In addition to prohibiting aggressive practices in general terms as described above, the Consumer Affairs Act also lists those actions which are blacklisted outright as aggressive in First Schedule. These are the following:
- Where the trader creates the impression that the consumer cannot leave the premises until a contract is formed;
- Conducting personal visits to the consumer’s home ignoring the consumer’s request to leave or not to return (unless legally justified to enforce a contractual obligation);
- Harassing the consumer by making telephone calls, fax, e-mails or by other forms of distance communication, (unless legally justified to enforce a contractual obligation;
- Creating the false impression that the consumer has won or will win a prize, when this is not true and demands money from the consumer in order to obtain such a prize;
- Telling the customer that his livelihood will be at risk if he does not buy the product;
- Including in an advertisement a direct appeal to children to buy a product or to persuade their parents or other adults to buy the advertised products for them; or
- Demanding immediate or deferred payment for, or the return or safekeeping of, products supplied by the trader, but not solicited by the consumer (inertia selling).
If you are a trader who wants to ensure that your commercial practices adhere to law, or if as a consumer you are a victim of a misleading or aggressive practice, Equinox Legal can help you.
For more information on unfair commercial practices, please contact us of firstname.lastname@example.org