Overview of the Consumer Protection Act, 2007
4. Misleading Commercial Practices
The Unfair Commercial Practices Directive deals with three distinct types of unfair commercial practices:
- Misleading practices (actions and omissions)
- Aggressive practices
- Prohibited practices (Black List)
According to the Unfair Commercial Practices Directive, a commercial practice is unfair if:
- It is contrary to the requirements of professional diligence, and
- It materially distorts or is likely to distort the economic behaviour with regard to the product of the 'average consumer' whom it reaches or to whom it is addressed, or of the average member of that group when a commercial practice is directed at that group
In other words, when a breach of good faith occurs and the "average consumer" is denied the reasonable standard of skill and care which he or she is entitled.
It is misleading if it contains false or untruthful information or in any way deceive or is likely to deceive the "average consumer", and cause or likely to cause him/her to take a transactional decision that he/she would not otherwise have taken.
In the context of determining if a trader has incurred a misleading practice, two considerations must be taken into account:
- Would the action cause the "average consumer" to take a decision that he/she would not otherwise have taken (the "average consumer test"), and
- The trader's professional diligence i.e. the general principle to act with good faith in the trader's field of activity and the expected standard of skill and care
The "average consumer test" also applies in the context of Aggressive Practices. The second test does not apply.
No test is required in the context of assessing actions under the Prohibited Practices (Black List). These actions are considered unfair in all circumstances.
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