Pricing Practices Guide Review - A Call For Evidence
Trading Standards Institute (TSI) opens consultation with stakeholders to review current consumer guidance – everything must go?
On 5 February 2014, the TSI, the industry association for Trading Standards Professionals, announced that it was conducting a review of the current Pricing Practices Guide (PPG) and has invited responses from stakeholders. The consultation poses 14 questions designed to assess industry views relating to the utility and relevance of the current guidance. As many of you will be aware, the PPG (published by BIS in November 2010) has become central to the way in which products are priced and presented to the consumer, and has become, albeit by default, something of a 'benchmark’ for traders and indeed for Trading Standards authorities considering enforcement action, including prosecution under the Consumer Protection from Unfair Trading Regulations (“CPRs”) 2008.
The CPRs impose a general duty not to trade unfairly with consumers and prohibit the misleading of consumers by action or omission. This includes a duty not to mislead consumers as to the price of a product or the manner in which the price is calculated.
Compliance with the CPRs is of huge importance to traders, not least because of the readiness of Trading Standards authorities to prosecute businesses and individual Directors for breach of them, and the willingness of Courts to impose heavy fines on offending traders. Indeed, individual Directors convicted of neglecting to control their businesses’ trading practices run the serious risk of a lengthy custodial sentence.
The robust approach by Regulators and Courts magnifies the significance of any available guidance. However, the apparent centrality of the current PPG to questions of enforcement and prosecution belies the simple fact that the Guide actually has no clear legal status, as made clear in the following disclaimer in the introduction: “traders are not under any legal obligation to follow the practices recommended”.
Similarly, evidence of any departure from the recommended practices is also not to be regarded as evidence of a breach of the law. One could of course be forgiven for questioning the utility of having such a Guide in the first place.
Indeed, if no legal consequences flow from compliance with the Guide or otherwise, why have a Guide at all? However, the reality is that, notwithstanding the strident disclaimers, departure from the recommended practices in the PPG will be viewed dimly by both Regulators and Courts in the absence of any strong justification.
One of the aims of the current TSI consultation is to address this uncertainty, and views are sought from stakeholders as to whether compliance with any guidance should be a mandatory legal requirement and/or whether any non-compliance should be admissible in criminal proceedings as evidence of a breach of the criminal law.
Stakeholders would be well-advised to consider this issue carefully given the implications.
Many businesses may welcome the certainty of having a Guide with which they are legally required to comply – something that ‘does what it says’ and ‘says what to do’ – rather than a Guide with a list of recommendations, the status of which is unclear.
On the other hand, many Stakeholders may view the existence of any guidance as indicative of an out-dated, over-protective approach, rendered unnecessary in the age of the internet-savvy consumer able to conduct their own market research within seconds.
The Consultation opened by the TSI will be a useful and interesting exercise, and a good opportunity to have your say but hurry: offer ends on 30 April 2014.
In the meantime, it is worth emphasising the current position that traders should, at the very least, have regard to the PPG and/or have some system in place to ensure that their business is not trading unfairly and that their staff are operating in line with the CPRs and in accordance with consumer protection legislation generally. Directors who fail to ensure that such systems are in place are particularly vulnerable to prosecution.
Please do not hesitate to contact any of our team if you wish to discuss pricing practice and trading issues or indeed would like further information relating to how to respond to the TSI Consultation.
Our Regulatory team have extensive experience of acting for clients charged with fraud, or criminal offences relating to alleged breaches of consumer protection law. We also provide advice on compliance with trading, marketing and advertising guidance, and regularly provide tailored seminars and training sessions to our clients and their employees.