Relations between professionals and consumers are governed by special rules. One of these rules, aimed at consumer protection, is the prohibition of unfair commercial practices.
The term 'commercial practices' refers to any commercial action, omission, behaviour, approach or communication by a professional, including publicity and marketing, that is directly related to the promotion, sale or supply of a product to consumers.
A 3-step procedure may be used to determine whether a commercial practice is unfair.
Who is concerned
The following are concerned:
- all professionals in the commercial, industrial, artisanal or liberal sectors;
- consumers: non-professionals.
Professionals may be individuals or legal entities.
The commercial practice must have influenced, or must have been likely to influence, the average consumer to make a decision that they would not otherwise have made.
How to proceed
The concept of unfair commercial practices
Unfair commercial practices consist of a practice or behaviour going against professional due diligence (not including honest practices) that may have the effect of inducing the average consumer to make a decision that they would not otherwise have made.
The consumer's decision may be a decision to go to a shop, buy a product or subscribe to a service, to reserve a ticket online after seeing an advertisement on the internet, exchange one product for another, terminate a contract, etc.
The professional's behaviour may be prohibited even if the consumer did not buy anything.
Any unfair practice may be prohibited, whether it takes place before, during, or after the purchase of the product or subscription to the service:
- before a purchase:
- advertising in a brochure or on television, even if the consumer does not place an order;
- bank fees that are presented in an incomprehensible manner, making it practically impossible for consumers to systematically compare the various offers on the market;
- after a purchase:
- in the case of after-sales service: if a computer is sold with free and guaranteed assistance by telephone, the professional may not demand payment if the consumer uses the after-sales service;
- for telecommunications companies: they may not prevent or delay a customer's decision to switch to another telecom provider.
A 3-step procedure may be used to determine whether a commercial practice is unfair.
Blacklisted commercial practices
Practices listed as blacklisted practices are considered unfair commercial practices under all circumstances. They may be divided into 2 categories: deceptive commercial practices and aggressive commercial practices.
Deceptive practices include the following:
- indicating that the product is available for a limited time only, where that is not the case; or
- stating or giving the impression that a product is legal; or
- asserting that a product can cure illnesses, dysfunction or malformation, where that is not the case; or
- stating that a product is free or at no cost, whereas in fact the consumer must pay for something else (other than costs of responding to the offer, such as a stamp or a telephone call) or upon delivery of the product; or
- displaying a certificate or quality label where the professional does not have authorisation to do so, etc.
Aggressive practices include the following:
- giving consumers the impression that they may not leave the premises until they have entered into a contract; or
- visiting a consumer's place of residence despite the consumer's wish not to receive direct marketing (through door-to-door sales); or
- demanding immediate or deferred payment for products provided by the professional when the consumer never requested them, etc.
If the behaviour is not on the list of blacklisted practices, it must be analysed to determine whether it is a deceptive or aggressive commercial practice that may convince a consumer to make a decision that they would not otherwise have made.
Other deceptive or aggressive practices
Even if the commercial practice is not included on the list of blacklisted practices, it may nevertheless constitute a deceptive or aggressive practice.
Deceptive commercial practices
A practice is deceptive if the professional gives false information or omits information, with the potential consequence of convincing consumers to make decisions they would not otherwise have made.
A deceptive act takes place when professionals do something they should not.
More specifically, professionals must not provide false information about the product or themselves, and must not provide information – even correct information – that is presented in such a way as to lead consumers to make a mistake with respect to the following:
- the existence or the nature of the product; or
- the main features of the product: advantages, availability, composition, accessories, method and date of manufacture, place of manufacture, after-sales service and claims, results of tests undergone by the product, etc.; or
- the extent of the professional's commitments, the steps involved in the sale, statements or indications leading the consumer to believe the professional or the product is sponsored or directly or indirectly supported; or
- the price or method by which the price is calculated, or the existence of a pricing advantage; or
- the necessity of the product or service, of a removable part, a replacement or a product repair; or
- the professional's identity, their qualifications, professional status, authorisations, copyrights or patents, or distinctions and awards received; or
- the consumer's rights (product replacement or reimbursement, etc.), risks relating to the products, and so on.
Marketing practices and comparative advertising that create confusion between the product, brand, commercial name, or a distinctive sign of the product being sold and that of a competitor are also deceptive practices.
If the professional has undertaken to comply with a code of conduct, makes reference to that code and the undertaking is verifiable, the professional must comply with the provisions of that code. If the professional fails to do so and the consumer makes a decision that they would not otherwise have made, the failure to comply with the code of conduct is considered a deceptive practice and is therefore prohibited.
The professional must provide all essential information that the consumer needs to make an informed decision. If the professional fails to do so and there is a risk that the consumer will make a decision other than the decision they would have made if properly informed, the practice is considered deceptive.
Furthermore, professionals must not conceal essential information from consumers, or provide such information in a manner that is unclear, unintelligible, ambiguous or too late.
If professionals ask consumers to buy their products or subscribe for their services, information about the following is considered essential:
- the main features of the product;
- their identity or address or, where applicable, the identity or address of the professional on whose behalf they are acting;
- the price for the product or service, including taxes, or, if the price cannot be determined in advance, the way in which the price is to be calculated;
- where applicable, any additional costs for transport, delivery or postal costs, or, if these cannot be determined in advance, an indication that they may be charged to the consumer;
- the means of payment, of product delivery, or of performance of the service;
- the manner in which complaints will be processed;
- whether or not there is a right to withdraw.
In certain specialised areas, such as marketing or publicity, professionals must provide additional information, such as the costs incurred if the merchandise is returned to the professional in case of online purchase, information about the billing currency, etc.
In order to determine whether information has been omitted, account must be taken of whether, based on the means of communication used, the professional had little time or space to provide the information. Moreover, one must look at what other measures the professional took to ensure consumers were properly informed.
Aggressive commercial practices
A commercial practice is considered aggressive if the professional:
- harasses the consumer; or
- puts pressure on the consumer; or
- uses physical force; or
- exploits their position of strength or threatens to use their position against the consumer.
In all of these cases, the professional's behaviour must have the result that the consumer no longer has free will to decide and can no longer make an informed decision.
In order to determine whether one of the aforementioned aggressive situations has occurred, several components must be analysed:
- the time and place where the behaviour occurred;
- the nature of the behaviour (harassment, pressure, etc.);
- the duration of the behaviour;
- the use of verbal or physical threats;
- whether the professional was aware of a misfortune or of a specific situation relating to the consumer and took advantage of it (death, accident, illness, etc.);
- whether the professional has created obstacles that are not related to the contract so that consumers no longer assert their legitimate rights to terminate a contract or switch suppliers (for example, where the current internet service provider requires formalities not specified in the contract if the consumer wishes to switch to another supplier);
- whether the professional is threatening the consumer with an action that is legally impossible (for example: the consumer orders nothing, but the professional threatens to send a bailiff to recover payment).
If the commercial practice used is not on the list of blacklisted practices and is not considered a deceptive or aggressive commercial practice, a third step of verification may be used.
Practices contrary to professional diligence
If the commercial practice does not fall within the scope of the categories described above, it may still constitute an unfair commercial practice if the professional's behaviour goes against the requirements of professional due diligence – in other words, the professional's behaviour does not comply with honest commercial practices.
This behaviour must also have a significant effect on the consumer, who then makes a choice that they otherwise would not have made.
If, following an analysis of the 3 steps, it is found that the commercial practice falls within none of the categories, it will be considered as not being unfair and therefore being authorised.
Who to contact
Ministry of Consumer Protection271, route d’Arlon
Postal address :
B.P 119 L-2011 Luxembourg