In the fast-paced world of retail, building trust with consumers is critical. One misstep, especially around product descriptions or advertising, can have serious consequences – both in terms of brand and legal risk. Here's what every retailer needs to know to stay compliant and protect their reputation.
Law vs Linguistics
Often at the Furniture and Home Improvement Ombudsman, consumers will use the phrase “misrepresentation” in a non-legal sense when they are actually seeking to assert one of their other legal rights, for example something is not “as described” under the Consumer Rights Act 2015. This is an important distinction and highlights some of the complexities in this area – particularly given the different types of legal misrepresentation and how difficult they may be to prove.
How, therefore, is Misrepresentation defined in law?
Misrepresentation occurs when false or misleading statements are made that induce a customer to make a purchase. It doesn’t matter whether the misinformation was intentional or accidental—what matters is the impact on the buyer’s decision.
There are three main types:
- Fraudulent Misrepresentation: Made knowingly, or without belief in its truth.
- Negligent Misrepresentation: Made carelessly, or without reasonable grounds for believing it’s true.
- Innocent Misrepresentation: Made without fault, but still turns out to be untrue.
Common Examples in Retail
- Claiming a product is “100% organic” when it’s not.
- Advertising an item as “limited edition” when it's mass-produced.
- Failing to mention defects or limitations in a product, such as natural characteristics.
- Using misleading photos that don’t reflect the actual item.
- Inflating retail prices to make discounts seem more significant than they are.
These might seem like small marketing embellishments, but can fall foul both of consumer protection law, giving rise to enforcement action from the CMA or trading standards, and also individual claims in contract as they could be seen as misrepresentations.
The Legal Framework
Relevant legislation to consider includes:
- The Misrepresentation Act 1967
- Digital Markets, Competition and Consumers Act 2024, (incorporating and enhancing the previous consumer protection regime that were previously found in the Consumer Protection from Unfair Trading Regulations 2008 (CPRs))
- The Consumer Rights Act 2015
These laws give consumers various rights, including cancelling or unwinding the contract, claiming damages, or both, depending on the type of misrepresentation. There may also be some overlap and it is important to note that regulators can also impose fines, issue enforcement notices, and in severe cases, pursue criminal prosecutions.
Why It Matters for Retailers
Besides the legal consequences, misrepresentation damages your brand credibility and customer loyalty. In today’s digital marketplace, bad reviews travel fast. One misleading product description can go viral for all the wrong reasons.
How to Stay on the Right Side of the Law
- Audit Your Listings: Regularly review product descriptions, labels, and advertisements to ensure accuracy.
- Train Your Staff: Ensure employees understand what constitutes misrepresentation and some of the other implications of getting it wrong and how to avoid it.
- Work Closely with Suppliers: Verify the claims made about products before passing them on to customers.
- Document Everything: Keep records of product specifications, supplier communications, and marketing decisions.
- Respond Quickly to Complaints: If a customer raises an issue, address it promptly and fairly - early resolution can prevent legal escalation.
Conclusion
Misrepresentation in consumer sales isn't just a legal issue - it's a customer trust issue. By being transparent, accurate, and proactive, retailers can not only avoid costly disputes but also build a stronger, more trustworthy brand. In a competitive market, that trust is one of your most valuable assets.
The Ombuds Group offers training and advice on all aspects of consumer law, including those provisions that relate to sector-specific supply chains. For more information, just get in touch with us.
For more information, visit www.ombuds.group.
