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Consumers suffer "significant losses" from bad selling practices, Commissions' evidence shows

20 October 2010

Consumers often suffer significant losses as a result of aggressive or misleading selling practices, and face a variety of problems in seeking redress as the legal position is often unclear. That is how the Law Commissions for Scotland and for England & Wales summarise the evidence presented to them on misrepresentation and unfair commercial practices in consumer transactions, in a paper published today.

The two Commissions were asked to undertake a project on the subject in February this year by the Department for Business, Innovation and Skills. Its aims are to simplify the law of misrepresentation; to consider whether aggressive commercial practices should be classed as illegitimate pressure under the law of duress; and to consider extending rights where there is evidence that consumers have suffered loss as a result of an unfair commercial practice and no private right currently exists.

Referring to the range of problems that may be faced, the Commissions say that it is often difficult to state with any precision how these cases would be treated under the current law, or what remedy might be available. A consultation paper is targeted for publication in spring 2011, which will consider how the law should be reformed to provide a simpler and clearer private right of redress for consumers who are the victims of misleading or aggressive practices.

"The challenge", the Commissions state, "will be to achieve an appropriate balance between protecting consumers from unacceptable malpractices, without encouraging consumers to abdicate responsibility for the bargains they enter.

"It is not the role of the law to protect consumers from all the bad bargains they may make. Research in the field of behavioural economics shows that consumers do not necessarily weigh the full costs and benefits of the bargains
they enter." They often focus on short term benefits and underestimate the likelihood of future problems, and "There is a limit to how far the law can protect consumers against miscalculations of this kind."

However, the evidence presented shows that "The consequences are often felt by the most vulnerable in society, often bereaved or elderly consumers who live alone. Law reform cannot address all the problems consumers face in attempting to gain redress, but it could be part of a strategy to encourage traders to maintain high standards and provide remedies when things go wrong."

Click here to access the evidence paper.

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