Consumer Protection from Unfair Trading Practices

The Consumer Protection from Unfair Trading Practices Regulations came into operation in October 2019. They apply to a wide range of sectors and business, including Trust Service Providers (TSPs). The premise of these regulations is to protect consumers from unfair trading. Taking these regulations into account, a business caught by the legislation should demonstrate how they ensure consumers are protected. 

The regulations prohibit unfair commercial practices. A practice is considered unfair if it contravenes the requirements of professional diligence or it materially distorts the economic behaviour of the average consumer with regard to the product. The regulations also prohibit the promotion of any unfair commercial practice in a code of conduct. A business should reflect these requirements in order to demonstrate that it adheres to the Consumer Protection legislation. 

Misleading actions and misleading omissions are also prohibited within the regulations. An action is considered to be misleading if it contains false information or its overall presentation in any way deceives or is likely to deceive a consumer. An action may also be misleading if it causes or is likely to cause the average consumer to take a transactional decision that the average consumer would not have taken otherwise. An omission is misleading if the commercial practice omits material information, hides material information, provides information which is unclear, unintelligible, ambiguous or untimely, or fails to identify its commercial intent. 

The final thing prohibited within the regulations is aggressive commercial practices. A commercial practice is classed as aggressive if it significantly impairs or is likely to impair the average consumer’s freedom of choice or conduct in relation to the product. A practice that causes the average consumer to take a transactional decision they would not have taken otherwise may also be classed as aggressive. 

It is important to beware of these regulations and how they may affect your business. Marketing, policies and procedures must all be carefully reviewed and considered to ensure that your organisation is not at risk of committing an offence under the regulations. One way to demonstrate your organisation’s commitment to fair practices and consumer protection would be to include a short section in you code of conduct. 

At DQ we are experienced in and can assist in all aspects of the TSP sector, including codes of conduct. 

For more information please contact Sinead or Kathryn.

Kathyn Sharman

About DQ

DQ is a leading Isle of Man based law firm with an international reach.

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