Treating customers fairly and honestly is good for your reputation, helping attract new customers and build customer loyalty. It also helps you comply with legal requirements, particularly if you sell to individual consumers rather than business customers.
Consumer protection from unfair trading
The Consumer Protection from Unfair Trading Regulations came into force in 2008, replacing detailed rules on trade descriptions and misleading prices with a broader prohibition of unfair trading when you market and sell to consumers.
The regulations set out a general ban on failing to meet the standard of honest market conduct and acting in good faith. The regulations also target misleading marketing practices and aggressive sales techniques. In both cases, unfair trading practices are prohibited if they affect the average consumer's ability to make an informed purchasing decision. The regulations also ban outright 31 specific unfair trading practices such as bogus competitions, pestering consumers and fake closing-down sales.
Bear in mind that Trading Standards can take enforcement action against businesses for unfair trading.
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Consumer rights and consumer protection
As well as protection from unfair trading, consumers are protected by statutory rights and regulations against unfair contracts. These mean, for example, that goods sold to consumers must be of satisfactory quality and that unfair terms and conditions hidden in the small print of a contract cannot be enforced.
Providing misleading marketing information may also mean that consumers have the right to return products or claim for any loss they have suffered.
There are also regulations covering doorstep selling, distance selling and e-commerce. Among other things, these generally give the consumer the right to cancel an order within an automatic cooling-off period and receive a refund or replacement if goods are faulty. The Consumer Rights Act 2015 extends consumer rights to include content supplied in digital form for example film, music, apps, computer games, ebooks etc.
Prices and labelling are covered by the unfair trading regulations - for example, misleading pricing is prohibited. Retailers must ensure that prices (and if appropriate unit prices) are clearly displayed. Special labelling rules apply to some types of product; you may want to check with your trade association or professional adviser.
Under GDPR, you are also required to protect your customers' personal data. Customers have the right to request a copy of any data you hold about them so you also need to plan how you will process people's data requests, and how you would report a security breach. Reporting any loss of unencrypted personal details is mandatory under GDPR.
Business customers and unfair marketing
Although sales to businesses are not covered by consumer-protection regulations, there are some restrictions on how you can market and sell to business customers.
The Business Protection from Misleading Marketing Regulations prohibit misleading advertising. This can include any information you provide during the course of negotiating a sale.
Small business customers also have a limited degree of protection against unfair contract terms being imposed by larger suppliers.