Consumer law: Watchdog warning on shop price deals

Consumer law: Watchdog warning on shop price deals

The Office of Fair Trading (OFT) has warned UK businesses to make sure their pricing policies comply with fair trading laws or they may face punishment.

The announcement comes after a report conducted by the OFT into the advertising of prices by traders. The watchdog has warned businesses to avoid pricing tactics on the web, in shops and on advertising that mislead consumers and potentially break UK consumer law.

The report, which was a study of 3,000 people, revealed shoppers are at risk of being wrongfully led to make consumer decisions based on misleading adverts or pricing information.

The OFT identified a number of potentially unclear tactics that include:

  • Drip pricing (hidden costs added at point of sale, such as taxes, card and delivery charges).
  • Time-limited offers (such as ‘offer ends this week’)
  • Baiting sales (selling at a low price with a limited stock)

None of these tactics are unlawful in isolation. What the OFT are stressing however is that these price strategies if supported by misleading advertising and other factors, can be at risk from investigation.

OFT Chief Executive John Fingleton said: “Misleading pricing is not only bad for the consumer, it is also bad for competition, and creates an uneven playing field between fair dealing businesses that stick to the spirit of the law, and those that push the boundaries too far.

We urge all firms to review their pricing practices and to get their houses in order where necessary.”

To help businesses comply with UK consumer law, the OFT has published a criteria showing how traders can avoid enforcement action due to dodgy pricing practices [pdf].

Breaches of any of the regulations set out in the Unfair Trading Regulations Act 2008 can lead to court action and fines.

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