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New guidance for traders and advertisers on price claims published

07 December 2016

Today (7 December 2016) after a lengthy period of consultation, the Chartered Trading Standards Institute published updated guidance on pricing practices and price claims.

It replaces the 2010 Pricing Practices Guide, which was published by the now defunct Department of Business, Innovation and Skills (BIS).

All traders and advertisers, across all industries and sectors, MUST comply with consumer protection laws, and the latest guidance helps them to do just that in relation to price claims and general pricing practices. These consumer protection laws have not changed, it is merely the guidance which has been updated. Regulators, including the ASA, Competition and Markets Authority, and Trading Standards will require that this guidance is followed. However, there is a grace period (lasting until April 2017) to allow traders and advertisers to adjust to the new guidance.

The new guidance takes an outcomes-focused, principles based approach, rather than setting out specific and granular details. It does provide some fairly straightforward examples of practices and claims which are likely to comply with the law, and of those which are unlikely to be compliant. We expect that there will be plenty of grey areas in between...

It sets out some general requirements, which sets the context for the rest of the guidance. For example, prices should generally reflect the total price, including taxes and all additional delivery charges. It reminds traders and advertisers that price information must be presented clearly, as even factually accurate information can be presented in a way which renders it deceptive in some cases. It also helpfully sets out some reminders and examples of some banned practices, such as bait-and-switch, but doesn’t bring anything new to the table on that front. Online traders should be conscious of the user journey, and make the total price clear to consumers from the outset wherever possible (rather than withholding information about additional charges or other significant information until later in the purchasing process).

A significant proportion of the guidance is helpfully dedicated to the use of ‘reference prices’, e.g. “was £X, now £Y” or “£XX cheaper than [Competitor]” including quite extensive tips and examples. This is an area where consumers often feel frustrated, confused and/or misled by traders and advertisers, so further guidance in this area is likely to be welcomed.

Perhaps one unhelpful aspect is that the guidance sometimes uses language which is not consistent with some consumer protection laws or the CAP Codes, so advertisers in particular are urged to refer to the CAP Codes in addition to this latest guidance, but overall the guidance should provide some welcome assistance.

The new Guidance for Traders on Pricing Practices can be viewed here.

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