'Aggressive sales techniques' Trading Standards investigations

5th March 2018 Business Crime

Businesses throughout the country, from sole traders to the biggest household names rely on a range of sales techniques to sell products or services in often competitive markets. This may include telephone calls and text messages to prospective customers, doorstep sales or even demonstrations of the newest and best products inside a customer's house. In an attempt to maximise business, is adequate consideration given to the risk of being found by Trading Standards of 'aggressive sales' techniques being used?

Regulation 7 of the Consumer Protection from Unfair Trading Regulations 2008 ('the Regulations') prohibits aggressive commercial practices that would 'intimidate or exploit consumers, restricting their ability to make free or informed choices.' In order for an aggressive practice to be unfair it must cause, or be likely to cause, the average consumer to take a different transactional decision. This subjectively drafted regulation is wide ranging in scope and creates significant risks for businesses who find themselves facing investigation or potential prosecution by Trading Standards for what they considered to be simply enthusiastic practices and showing passion for their products. Consideration of recent cases goes to further demonstrate the potentially severe implications of business' sales techniques stepping over an increasingly thin line.

In 2016 the Court of Appeal considered the case of R v Waters[1] and found that customers being 'bombarded with sales calls and pressurised' amounted to aggressive sales techniques. The court, found that, in determining whether sales were 'aggressive' the commercial practices of the company had to be looked at on the specific facts of each case. The case was prosecuted by Trading Standards and involved the sale of products to customers with mobility needs. The finding of the court clearly emphasised the subjective approach to the Regulations and the need for companies to carefully consider and refine their sales tactics in light of their individual customers.

The case of R v Anas Ahmed[2] involved the sale of airline tickets through a 'sub-agent' company, whose sales were conducted by telephone and email. The case was prosecuted by Harrow and Brent Council Trading Standards department, for offences under the Consumer Protection Regulations, including the use of aggressive sales techniques. When telephone conversations took place with customers who sought to seek a refund for their airline ticket there was deemed to be a 'shift in the tone and mood of the staff who they were speaking to' and that there was often nobody available to speak to. The case highlighted that not only the words used by a salesperson, but the demeanour and manner in which consumers are spoken to may amount to aggressive sales, which, in the present case led to a prison sentence being imposed.

The sales tactics of a Cardiff based building business were recently viewed as intimidating elderly and vulnerable people who felt forced into having work carried out[3]. The tactics of the builders was investigated over a two year period by Trading Standards' 'Scambusters' department. The use of 'deliberate, consistent and cold blooded' techniques to customers, led to prosecutions and eventual prison sentences for conspiracy to defraud, as well as offences under the Consumer Protection Regulations.

The beginning of 2018 saw energy companies and suppliers come under scrutiny for 'bullying' customers into accepting 'smart meters' by bombarding individuals with correspondence which purported that the meters were a legal requirement. Energy companies have received recent warnings from Trading Standards that such statements are likely to breach Regulations by amounting to aggressive sales practices. In light of techniques being deployed by companies on a national sale Trading Standards stated that 'firms are getting more and more aggressive'. The response will no doubt be a firmer and more robust approach into investigating businesses who are potentially breaching Regulations.

The Regulations refer in particular to the use of threatening or abusive language, however are wide ranging and encompass an array of familiar sales techniques that an enthusiastic salesperson would unlikely consider as amounting to aggression. For instance, the Regulations also refers to salesperson refusing to leave a customer until they make a purchase, use 'scare tactics' to convince a customer that they need a product, constant contact or pestering to make a purchase, using guilt to force a customer to make a purchase, or by appealing to children to persuade their parents to buy a product for them. It may come as a shock to the consumer, salesperson and business that such approaches and techniques, which we would undoubtedly class as commonplace, may open the doors to complaints, an investigation and potential prosecution.

Consideration of recent cases demonstrate that Trading Standards' investigations into sales techniques, will consider not only the conversations had, the volume or nature of calls, but the particular features and characteristics of the individual customers that are being sold to. Businesses therefore need to be particularly mindful of the implications if their customers may be deemed vulnerable.

A breach of the Consumer Protection from Unfair Trading Regulations 2008 is a criminal offence. Unwary businesses and individuals can face significant financial penalties and prison sentences of up to two years. Sales techniques that are considered 'aggressive' may also lead to prosecution under the Fraud Act 2006, for making 'false representations' to customers or an 'abuse of position'. Dependent upon factors including the volume of sales, number of victims and their role in the business, individuals and businesses can face significant prison sentences of up to ten years. It is therefore imperative due to the detrimental implications that expert legal advice is sought if an investigation or prosecution is brought by Trading Standards. Peter Grogan, the Team's Head said that 'Investigations into a business by Trading Standards investigators can be complex, long-running and potentially costly affairs; Trading Standards legislation and the swathes of associated Consumer Protection Regulations are difficult to navigate and understand and the best advice is to engage experienced defence lawyers sooner rather than later. We frequently encounter cases where our clients instruct us only after an irrevocable decision to prosecute has been made and a court hearing is pending - whereas had we been instructed at the inception of the investigation we could have had an impact on its course and outcome, possibly avoiding proceedings altogether'. Peter can be contacted directly on 0161 828 1836.

If you are the subject of a Trading Standards investigation concerning counterfeit goods, whether arising from sales techniques or otherwise, JMW's Trading Standards defence team can provide the expert advice and guidance you or your business needs. Find out more about our expert team and the services and advice we provide here .

 

[1] R. v Waters (Oliver Frederic) [2016] EWCA Crim 1112

[2] R v Anas Ahmed [2017] EWCA 1281 (Crim)

[3] http://www.bbc.co.uk/news/uk-wales-37503753

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Catherine O'Rourke is a Solicitor located in Manchester in our Business Crime & Regulation department

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