Misleading actions
Case Study (Credit Card used)
A furniture website states “free UK delivery” on the top of every webpage, without any obvious restrictions on the free delivery offer. A consumer from the Isle of Wight looks at the website, is attracted by the free delivery offer and proceeds through the purchasing process for a £600 sofa using a credit card. The seller automatically sends a confirmation email saying they have received the order and the total price including delivery shows £600. The consumer checks online later that day and the credit card payment for £600 is listed.
The consumer is pleased the order has been completed and is looking forward to the delivery of the new sofa. However, the following day the seller sends an email saying that the free UK delivery offer does not include offshore locations including the Isle of Wight and this condition is set out on page three of the four-page terms and conditions. This is viewable via an obscure “Legal” link in small characters at the bottom of the website. The seller explains that they will deliver the product for £150, or the consumer can cancel the order. The consumer reluctantly cancels the order as they cannot currently afford the extra £150. The payment is cancelled by the seller and the consumer’s credit card is refunded, leaving the consumer angry and without a sofa. A week later, after receiving a monthly salary payment, the consumer decides to buy the same sofa from the original seller, reluctantly accepting the £150 delivery charge as this is the sofa they want. To make things worse, the sofa has increased in price to £650, giving a new total cost of £800 (£650 plus £150 delivery).
The perspective of the very annoyed consumer is being out of pocket by up to £200 as a result of the way the seller conducted business. Part 4A of the Consumer Protection Regulations contains a right of redress in certain circumstances and a claim can be made when a consumer has made either a consumer payment or a contract has been concluded.
Misleading Claim and the right to redress
In this furniture website example, the consumer feels significantly misled into making the initially agreed £600 payment. Part 4A allows for a wide range of contractual circumstances and product categories as well as setting out what type of situations and matters can provide the legal basis over what could be considered a misleading claim. These matters form the basis of what are called “misleading actions” leading to “prohibited practices”. A consumer has a right to redress if the prohibited practice was a “significant factor” in relation the purchase. Examples include: a motor dealer advertising a significantly incorrect mileage on a car; a doorstep tradesperson making false claims about roof repairs being required; incorrect claims about delivery charges on a website. Further information is contained in detailed UK Government guidance.
An online buyer who experiences significantly incorrect delivery charge information is likely to have been subject to a misleading action by the seller and a prohibited practice. This may be in relation to unqualified claims of “free delivery” that are not honoured in relation to certain parts of the UK, or to circumstances where there is a delivery charge to standard buyers but an undeclared higher charge to other consumers. The high level of dissatisfaction that undeclared surcharges cause to many consumers in affected parts of the country suggest that these are likely to cross the “significant factor” threshold and so consumers could have a claim for compensation.
Method of Payment
If the consumer made payment with a debit card and the seller refused to cooperate in a claim, then the consumer would be restricted to taking action against the seller in the courts. However, as the buyer in this case study used a credit card, enhanced rights are available. Section 75 of the Consumer Credit Act 1974 allows consumers to pursue their credit card provider for any claim which they would have had against the seller in respect of a misrepresentation or breach of contract. Under Section 75 of the Consumer Credit Act 1974, a misleading action is likely to constitute a misrepresentation.
The second advantage of making a credit card payment in this scenario is that should the credit card provider not compensate the buyer for the misrepresentation then the buyer can take the matter up with the Financial Ombudsman Service for an independent determination, free of charge.
One option for the consumer is to raise the matter with the seller and if that fails to resolve it, take the matter up with the card provider. But note that the consumer may also bypass the seller and go straight to making a complaint to the card provider. The following outline of a letter could be used to help you compile your own document:
Letter to your credit card company
123 High Street
Anytown
Anytown City
AT1 1AB
XYZ Credit Card PLC
123 High St
Loandon
AP8 1AZ
Dear Sir/Madam
Consumer Protection from Unfair Trading Regulations 2008 - Part 4A
Consumer Credit Act 1974 Section 75
Credit card account number (last four digits): 1234
This letter sets out details of a claim I wish to pursue against XYZ Credit Card PLC for a breach of consumer protection law by Sofa12345 Ltd.
On 03 August 2021 I went onto the website www.sofa-raway.co.uk to browse the products sold by Sofa12345 Ltd. The following paragraph sets out what transpired.
Placed order for a lovely sofa on 3 August 2021 for £600 with free delivery. The next day I received an email requesting a further £150 for delivery and pointing to detail on page three of the four-page terms and conditions which is only viewable via an obscure “Legal” link in small characters at the bottom of the website. Reluctantly, I cancelled as I could not afford the extra £150 at that time.
A week later I went back to order the sofa as I really liked it and couldn't get it anywhere else however it was now £800 (£650 and £150 delivery to my address). This meant I paid £200 more than from my original order.
I recently read guidance outlined on www.deliverylaw.uk, which is supported by the UK consumer law authorities, which said that if I was misled into entering into a ‘contract’ or making a ‘consumer payment’ to a trader for the supply of a product and the misleading information (‘prohibited practice’) was a significant factor in my decision to enter into the contract or make the payment, then I could have a right of redress against the seller, or if I paid for the goods via credit card, against my credit card provider.
Consequently, for the reasons outlined above I hereby make the following claim for redress (a DISCOUNT) under Part 4A of the Consumer Protection from Unfair Trading Regulations 2008 and Section 75 of the Consumer Credit Act 1974 in relation to misrepresentations made by Sofa12345 Ltd leading to my total (goods plus delivery) payment of £800 to XYZ Credit Card PLC.
I assert that my claim meets the conditions set under Regulation 27A of Consumer Protection from Unfair Trading Regulations 2008 on the following basis:
- By entering into a contract and/or making a consumer payment.
- That Sofa12345 Ltd trading as www.sofa-raway.co.uk engaged in a prohibited practice which was a misleading action under Regulation 5 of the Consumer Protection from Unfair Trading Regulations 2008
- The misleading action being that:
I understood I would get sofa for £600 with free delivery and was later informed that delivery to my address attracted a £150 delivery surcharge.
- The conduct set out above is in my view a commercial practice that is both false and deceptive in terms of matters including the price or the manner in which the price is calculated and the existence of a specific price advantage.
- Furthermore, the prohibited practices and misrepresentations concerning delivery by Sofa12345 Ltd outlined above was a significant factor in my decision to make payment via credit card. Consequently, I can claim a DISCOUNT taking into account the seriousness of the prohibited practices.
Having considered the seriousness of the situation, I believe a discount rate of 25% is appropriate. The total discount amount is therefore 25% multiplied by the total payment (including delivery costs), namely £800. I calculate the discount amount to be £200.
Please ensure payment of £200 is made promptly and I reserve the right to take this matter up with the Financial Ombudsman Service should you fail to deal with these matters satisfactorily.
Please respond within 14 days of receiving this letter.
Yours faithfully
A N Other Person
Attachments or other information:
screenshot of website order
email confirming original order
email advising of additional delivery surcharge
email of confirmation second order
Template letters
- Claim against retailer
- Claim against the business who sold you the goods
- Claim against Credit Card Company
- You may have extra rights....