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Unfair Commercial Practices

European consumers are protected against unfair commercial practices, whether they are misleading or aggressive commercial practices. The EU affords the same level of protection to all consumers irrespective of the place of purchase or sale in the EU.

ACT

Directive 2005/29/EC of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Directives 84/450/EEC, 97/7/EC, 98/27/EC and 2002/65/EC and Regulation (EC) No 2006/2004 (Unfair Commercial Practices Directive).

SUMMARY

This Directive defines the unfair commercial practices which are prohibited in the European Union (EU). It thus protects the economic interests of consumers who conclude commercial transactions with traders.

Unfair commercial practices are those which:

  • do not comply with the principle of professional diligence *;
  • may influence consumers’ transactional decisions *.

Certain population groups must be particularly protected due to their vulnerability or credulity, because of their age (children or the elderly) or because of mental or physical infirmity.

This Directive integrates provisions from the Directives on misleading advertising, on distance contracts and on the distance marketing of financial services.

Misleading practices

A practice is misleading if it contains false or untrue information or is likely to deceive the consumer, even though the information given may be correct. In particular, this information relates to:

  • the existence or nature of the product;
  • the main characteristics of the product (such as such as its availability, benefits, composition, date of manufacture, geographical origin, the results to be expected from its use, etc.);
  • the price, the trader’s commitments and the nature of the sales process;
  • the need for a service or repair;
  • the trader (their identity, qualifications, code of conduct, etc.);
  • the consumers’ rights on aspects of the sale of consumer goods.

In addition, the Directive prohibits product marketing and advertising activities which create confusion with another product or with a competitor’s trademark.

Lastly, all the necessary information for the consumer must be provided to him/her in a clear and comprehensible manner at a suitable time to enable him/her to make a transactional decision. If the opposite occurs, then this is deemed to be a misleading practice by omission.

Aggressive commercial practices

Consumers’ transactional decisions must be made freely. They cannot be taken following the use of harassment, coercion or undue influence *.

Several elements must be taken into consideration in order to determine the penalties:

  • the nature and the duration of the aggressive practice;
  • the possible use of threatening or abusive language or behaviour;
  • the exploitation of any specific circumstance affecting the consumer in order to influence his/her decision;
  • the non-contractual conditions imposed on the consumer for exercising their contractual rights.
Key terms of the act
  • Professional diligence: the standard of special skill and care that a trader may reasonably be expected to exercise towards consumers, commensurate with honest market practice and/or the general principle of good faith in the trader's field of activity.
  • Transactional decision: any decision taken by a consumer concerning whether, how and on what terms to purchase, make payment in whole or in part for, retain or dispose of a product or to exercise a contractual right in relation to the product, whether the consumer decides to act or to refrain from acting.
  • Undue influence: exploiting a position of power in relation to the consumer so as to apply pressure, even without using or threatening to use physical force, in a way which significantly limits the consumer’s ability to make an informed decision.

REFERENCES

Act Entry into force Deadline for transposition in the Member States Official Journal

Directive 2005/29/EC

12.6.2005

12.6.2007

OJ L 149, 11.6.2005

Last updated: 21.06.2011

See also

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