MISELADING CONSUMERS AS TO THEIR RIGHTS

Consumers have various rights in relation to defective goods and services, some of these rights are so entrenched that a trader cannot exclude them by any contractual term. Rouge traders therefore seek to avoid these inalienable consumer rights by misleading the consumer to believe that they do not exist or apply to the contract. Classic examples of this strategy are notices displayed in premises where consumer transactions take place proclaiming

• “No refunds”
• “Refunds only if receipt is produced”
• “Money will not be refunded, a credit note will be given in lieu”
• “Sale goods may not be returned”

The Consumer Transactions (Restrictions on Statements) Order 1976, seeks to outlaw the making of misleading statements in three ways:

1. Article 3 prohibits traders form making misleading statements about consumer rights by making it a criminal offence for a trader to display a written notice at any place where consumer transactions are effected, containing a term invalidating section 6 of the Unfair Contract Terms Act 1977. Traders are similarly prohibited from making such statements in documents, advertisements, catalogues circulars, and on the goods or containers. The courts have made some confusing decisions in relation to prosecutions brought under Article 3. In Hughes v. Hall [1981] R.T.R.430 it was held that “sold as seen” constituted an offence, whereas in Cavendish-Woodhouse Ltd v. Manley (1984) 148 J.P.299 “bought as seen” did not constitute an offence under Art.3. The prohibition only applies to written notices and oral statements misleading consumers as to their rights may only be penalised under the general criminal law of deception if the trader or his employee making the misleading statement knows that it is misleading.

2. Article 4 makes it an offence for a supplier in a direct contractual relationship with the consumer to make a statement on the goods, or on a container, or in a document about the consumer’s rights against the supplier with respect to defects, fitness for purpose or correspondence with description unless there is “in close proximity” to that statement, another “clear and conspicuous” statement to the effect that the statutory rights of the consumer are unaffected.

3. Article 5 makes it an offence for a supplier who is not in a direct contractual relationship with the consumer but there is a reasonable expectation that the goods will become subject to a subsequent consumer transaction to make a statement on the goods, or on a container, or in a document about the consumer’s rights against the supplier with respect to defects, fitness for purpose or correspondence with description unless there is “in close proximity” to that statement, another “clear and conspicuous” statement to the effect that the statutory rights of the consumer are unaffected.