CMA approach to consumer enforcement: challenges and opportunities Presentation to the CMA Board 19 March

2 Consumer Regime Changes

Changes to the Consumer Landscape What Moved Where? 3 Consumer Futures Consumer Advocacy (Regulated Sectors) OFT National Consumer Protection Enforcement (Part 8, CPRs, UTCCRs) Market Studies Credit Regulation Business Guidance Consumer Codes Approval Scheme Consumer Information, Education and Advice (including Consumer Direct) TSS Local, Regional and National Consumer Protection Enforcement (Part 8, CPRs, UTTCRs etc) Citizens Advice Consumer Information, Education and Advice (including Adviceguide) TSI Business Guidance CCAS CMA Consumer Protection (Part 8, CPRs, UTTCRs etc) focusing on systemic market failures Market Studies Consumer Focus Consumer Advocacy FCA Credit Regulation

Challenges and Opportunities 4

Consumer engagement 5

Annexe 1: Background on the Consumer Protection Framework and the Landscape changes 6

7 ●The UTCCRs implement the European Unfair Terms Directive 93/13/EEC. ●Any non- individually negotiated term in a business to consumer contract can be assessed for fairness –apart from terms which relate to the main subject matter of the contract (i.e. Price and goods/service) as long as they are written in plain and intelligible language ●A term is considered unfair if it creates a significant imbalance in the parties’ rights and obligations under the contract, to the detriment of the consumer and contrary to the requirement of ‘good faith’. ●Schedule 2 of the Regs sets out an indicative and non-exhaustive (Grey List) list of terms which may be regarded as unfair. ●Examples of unfair terms are terms that: –permit excessive or disproportionally high penalties for breach of contract, –limits or excludes a firms liability in relation to breach of contract –deny consumers the right to full compensation where their statutory rights are not met by the business –require consumers to pay for goods or services they haven't received when the contract is cancelled. Background: The UK Consumer Protection Framework - UTCCRS ●CMA and qualifying bodies (TSS, some sectoral regulators and Which?) can apply to the courts to decide if a term is fair/unfair. ●If deemed unfair, the term is unenforceable although the rest of the contract will still apply. ●CMA and qualifying bodies can request copies of firm’s contracts and other information as necessary. ●Enforcers can accept undertakings to stop using an unfair terms in place of court action. ●CMA has duty to publish details of all orders and undertakings obtained by it, or another body,under UTTCRs. ●Further duty to provide, any person on request, information (including details of undertakings/orders and any amended terms) regarding whether a particular term to which the UTTCRS apply has been the subject of an undertaking or order given to the CMA or notified to it by a qualifying body. ●Details of all undertakings and injunctions obtained prior to April 2014 are available at

Background: The UK Consumer Protection Framework - Other Consumer Protection Laws The CMA retains enforcement powers under a number of pieces of consumer protection law, such as: ●The Consumer Protection (Distance Selling) Regulations EU derived regs which provide consumers with cancellation rights when purchasing goods and services over a distance. -Aim is to promote cross border trade across the EU by ensuring consumers are not put at a disadvantage when buying at a distance. -Can be enforced by CMA and/or TSS directly or by all designated enforcers under the EA02. ●The Financial Services (Distance Marketing) Regulations The Regulations cover the sale of most financial services that take place at a distance, such as online or over the phone and again provide cancellation rights to consumers. -Enforced by FCA and CMA. ●The Operation of Air Services in the Community (Pricing etc.) Regulations Enforced by both CAA and CMA -It sets out a number of legal obligations relating to the display of prices for air services. ●The Business Protection from Unfair Trading Regulations Prohibit businesses from advertising products in a way that misleads traders. -Set out conditions under which comparative advertising, to consumers and business, is permitted. -Enforced by CMA and TSS. 8