Accurate descriptions: Used vehicle sales
Fair trading for businesses selling goods or services
An overview of the law relating to fair trading and how this may affect your business - including areas such as pricing and product description.
When you sell products and services, you must comply with fair trading laws - covering areas such as:
- pricing
- weights and measures
- descriptions of products and services
- the contract between a buyer and seller
- competition between businesses
- intellectual property and counterfeiting
What are the rules around fair trade?
The law sets out practices that are illegal when selling goods or services. These unfair practices include misleading customers and using aggressive selling practices.
Misleading customers
You must not mislead customers about the goods or services you sell. For example, it is against the law to give customers wrong information, such as advertising something as being reduced when it never costs a higher price. It is also illegal to keep important information hidden. You must be open and honest with your customers.
Aggressive selling
You must not use aggressive selling techniques. It is illegal to pressure a customer to buy goods or services. For example, this might be refusing to leave their home until they make a purchase or constantly contacting them.
Other unfair practices include taking away a customer's statutory rights by displaying signs such as 'sold as seen' or 'no refunds' - a customer is entitled to redress if goods or services are faulty or misdescribed under the rules of the Consumer Rights Act 2015.
Pricing and other fair trading rules
If your business sells goods or services, you must provide the price to customers. This rule applies whether you are selling to individuals or other businesses.
If the price for a good or service is not pre-determined by your business, you must supply, if asked:
- the price of the good or service
- the method for calculating the price - if you can't give an exact price - so the customer can check the price
- a sufficiently detailed estimate
Read more on the rules of pricing goods and services.
You must also give customers:
- the general terms and conditions that you use, if any
- information on any contract terms governed by the law of a particular country
- the existence of an after-sales guarantee, if any, not imposed by law
- the main features of the service, if not already apparent from the context
- the name of the regulating institution if you work in a regulated profession
- information about your insurance cover, the contact details of the insurer and territorial coverage - if you are required to hold professional liability insurance or a guarantee
- contact details where any complaint can be made
- your legal status and form (for example, whether you are a sole trader or a limited company)
- Your business address and contact details where you can be reached directly
Note that this list is not exhaustive and not all service providers are covered by these rules. There may also be further information that you must provide to a customer if they ask for it.
Fair trading law for certain goods and services
There are trading laws covering businesses that deal in specific goods and services, such as:
- property
- holidays
Understanding the laws that affect you is required for running a successful business. If you don't comply, you could face legal penalties. It could also damage your business reputation.
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Accurate descriptions: Rules for describing your products and services
How to describe your products and services in a lawful way in line with consumer protection legislation.
Any description of products or services you sell or hire to customers must be accurate and not mislead them. You must provide consumers with the correct information and not omit details about the products and services so they are fully informed about whether to buy them.
The Consumer Protection from Unfair Trading Regulations 2008 (CPRs) make it an offence to mislead consumers about goods and services. The regulations apply to commercial practices relating to products (including goods, services and digital content) before, during and after a contract is agreed.
Dishonest practices could include untruthful advertising, omitting important information, or providing deceptive after-sales information. Using these unfair practices, known as a misleading action and a misleading omission, breach the regulations (and are potentially a criminal offence).
Any business that trades in goods or services must comply with the regulations. Directors, managers and other employees can also be liable to follow the rules.
What is a misleading action under unfair trading law?
A misleading action is when a product contains false information or is in some way untruthful, or its overall presentation deceives or is likely to mislead the average consumer.
A false or untruthful product description can mislead a customer with information relating to things such as the price or how the price is calculated, or the need for a service, part, replacement or repair. For example, a customer pays £50 for a product, without being told the price does not include VAT. As this was not explained in the advert, the advert is misleading.
You can view a full list in the Consumer Protection from Unfair Trading Regulations 2008 (CPRs).
What is a misleading omission under unfair trading law?
A misleading omission is when a trader omits or hides material information or provides it in an unclear, unintelligible, ambiguous, or untimely way. For example, to make an informed decision about whether to buy or how much to pay, the average consumer buying a car needs to know whether the vehicle has previously been an insurance write-off; you, as the trader, have to disclose this information, whether or not the consumer asks for it.
The misleading information given (or information not provided) to a consumer must cause, or be likely to cause, the average consumer to make a different transactional decision. An example would be the consumer making a purchase they would not otherwise have made. Transactional decisions also include decisions made after a consumer has bought a product – for example, their decision to return a faulty product or accept an offer of redress.How can a misleading action or omission be given?
When selling, a misleading action or omission can be provided in several ways, including:
- verbally
- in writing (for example, in an advert, a brochure, or on an invoice or order form)
- by illustration (for example, in advertisements or on packaging)
- by implication
What does the law require?
The Consumer Protection from Unfair Trading Regulations 2008 do not cover insignificant inaccuracies. Only a court can decide whether the actions of a trader would adversely affect the average consumer.
You can check which laws apply to the goods and services you trade in by asking your local Trading Standards office.
A consumer’s right to redress
If a consumer has been the victim of misleading actions or aggressive selling, the regulations give them the right to redress through a civil court order. The customer may be entitled to claim compensation, a price reduction or cancel the contract. These rights do not apply to misleading omissions.
The Department for Business and Trade, formerly the Business, Energy and Industrial Strategy, has produced business guidance on the rights of consumers under the regulations - read more on Misleading and Aggressive Commercial Practices: New Private Rights for Consumers.
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Accurate descriptions: Used vehicle sales
How to describe used vehicle sales in a lawful way in line with consumer protection legislation.
If you sell used vehicles, you must ensure that the descriptions are listed accurately. This includes the mileage, condition, history and specification. This type of information will likely affect a consumer's decision whether to purchase the vehicle. These descriptions are controlled by the Consumer Protection from Unfair Trading Regulations 2008 (CPRs).
How to ensure accurate descriptions are applied
To comply with the law, a trader and their employees need to show that they took all reasonable steps to trade fairly and honestly with their customers when selling used vehicles. This practice is known as acting with due diligence. Reasonable steps you would carry out as a trader include:
- When buying motor vehicles always ask about their mileage and make sure it is written on the purchase document and not given verbally. Get the seller's signature declaring whether the history is correct, incorrect or unknown.
- Do not rely solely on the mileage statement of the previous owner unless they are the original owner. Only offer a vehicle for sale as genuine mileage when the full mileage history is known.
- Check the vehicle’s history. For example, whether it is recorded as stolen, is subject to outstanding finance, has been written off as an insurance loss or accident damaged.
- Check that you have the right to sell the vehicle. For instance, is the vehicle still subject to a hire purchase agreement. If yes, you do not own it.
- When inspecting a vehicle, make sure that the overall condition, both mechanically and physically is consistent with its age. Look at the vehicle's service history and MOT history to determine if there is a consistent increase in mileage over time.
- Inspect the vehicle yourself including reading the service history and contacting traders who have previously serviced the vehicle to establish that the service history is correct and keep a record of this inspection.
- Ensure that all staff who may meet customers are properly trained and instructed in these matters and have access to all relevant details (for example, purchase invoices and results of any checks made).
What is unlawful – mileage description
The mileage displayed on a vehicle odometer should accurately represent the distance the vehicle has travelled. Displaying an incorrect odometer reading may be a misleading action. To comply with the law, you must tell the consumer the accurate mileage, as failure to do this may be a misleading omission.
There are several practices that are prohibited, including:
- Making a misleading statement about a vehicle’s mileage, such as altering the odometer to a lower figure or zero, or making other false claims in writing or verbally.
- Selling a vehicle that has been subject to a prior misleading action or omission. This could include having the vehicle on the forecourt, selling it with an incorrect odometer reading or not informing the consumer of the actual mileage.
- Having false mileage in an advertisement, for example, 'low mileage' stickers.
- Not telling the consumer the odometer reading or the fact that an odometer unit was faulty and replaced (either with a new or second-hand unit) may be a misleading omission.
- If the accuracy of the odometer reading is in doubt, you must make this clear to prospective customers. This is usually done using disclaimers (which obscure the entire odometer reading). It is always advisable to use disclaimers to avoid the potential false mileage description being read by consumers.
- It is not sufficient to disclaim all mileage without carrying out checks to confirm their accuracy. Even if a trader wasn't aware that the mileage was wrong, their actions could still be against the law.
You should be able to show that you have checks in place to verify the mileage on the odometer and show that these checks are carried out. However, despite having these checks in place, verifying the mileage recorded may still be impossible, and you should state this to customers.
What is unlawful – description of used vehicle sales
Examples of unlawful trading practices include:
- Having false information in an advertisement. For example, ‘in excellent condition’ or ‘drives like new’ when you have knowledge of an existing fault with the vehicle.
- Making incorrect statements or not informing consumers of the correct service history, previous accident damage, number of previous owners, technical specification (e.g. engine size, miles per gallon), insurance grouping or environmental performance.
- Misleading consumers by making them believe they have no right to redress under the Consumer Rights Act, using statements such as 'sold as seen' or 'trade sale'.
- Hiding additional costs. For example, administration fees, delivery or other non-optional charges.
- Not disclosing that a vehicle was previously used for business purposes, such as rental or taxi.
The CPRs list banned trading practices which are considered unfair and provide a defence to any criminal charges. For example, a banned practice includes claiming or creating the impression that you are a private seller when you are a trader. A full list of the 31 banned practices can be found in the Consumer Protection from Unfair Trading Regulations 2008 (CPRs)
All unlawful practices can be made verbally, in writing, visually or by association. They can be made by anyone in your business, including staff members. Businesses, business owners and staff members can all be held accountable for their actions.
Used vehicle warranties
Any warranty or guarantee you supply free of charge or sell separately with a vehicle is in addition to a consumer's legal rights under the Consumer Rights Act 2015. You cannot refuse to deal with a complaint because it is excluded from a warranty, or the warranty period has expired. Any warranty you give is legally binding.
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Working with Northern Ireland Trading Standards Service
How Trading Standards can help your business comply with the law when a customer has lodged a complaint about your business or you need general advice.
The Northern Ireland Trading Standards Service (TSS) enforces the laws on goods and services within Northern Ireland.
Customer complaints
The TSS receives complaints from customers about a wide range of consumer issues, including:
- misleading descriptions or prices
- inaccurate weights and measures
- consumer credit
- unfair commercial practices
The TSS can investigate customers' complaints and take appropriate enforcement action where necessary. This ranges from advice to warnings to criminal prosecutions. In some cases the business may want to seek independent legal advice.
Find out more
If you'd like general advice regarding any consumer legislation - you should contact TSS. It can provide free and impartial guidance.
It may be that by seeking their advice on your trading policies, you can prevent any complaints arising.
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