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The Consumer Protection Act, 2007 came into force on 1 May. It is the first major piece of new consumer legislation in Ireland in almost 30 years and is designed to implement the EU Unfair Commercial Practices Directive and to modernise and reform Irish consumer law. It repeals a large body of consumer legislation dating back as far as the 19th Century.

The Act has two principal parts. Part 1 implements the Unfair Commercial Practices Directive and has four main sections:

1. A general prohibition of unfair commercial practices i.e. anything which might cause the average consumer to make a transactional decision the average consumer would not otherwise make
2. A specific prohibition of misleading commercial practices. This includes the provision of false or misleading information.
3. A specific prohibition of aggressive commercial practices i.e. harassment, undue influence or coercion.
4. A specific list of 23 misleading commercial practices and 8 aggressive commercial practices that are now prohibited. These include prize draw scams where claiming a prize incurs a huge cost for consumers, persistent cold calling and creating a false impression that a trader is signed up to an industry code.

Pyramid selling schemes are also prohibited under the Act but are treated under a separate section given that they had been the subject of some controversy in Ireland in recent years.

Part 2 of the Act establishes the new National Consumer Agency as a statutory body which will incorporate the existing Office of the Director of Consumer Affairs (ODCA) and will be responsible for enforcement of the Act. In addition to the powers of enforcement which were already held by the ODCA the National Consumer Agency will also have powers and functions in the areas of consumer advocacy, research, educational awareness, information and enforcement.

The onus of proof to defend any proceedings taken under the Act by the National Consumer Agency now falls on traders. Traders found guilty of engaging in prohibited practices under the Act may be guilty of a criminal offence and fines of up to €3,000 and/or six months imprisonment on a first summary conviction (rising to €5,000 and/or 12 months imprisonment on a subsequent summary conviction). Should the offences be prosecuted on indictment then the trader may be liable for fines of up to €100,000 and/or 24 months imprisonment. There is also a provision for daily fines for ongoing offences. In addition disgruntled consumers who have suffered because of the actions of a convicted trader may apply for compensation from that trader.

It is hoped that the new Act will act as a deterrent in that a list of convicted traders will be published on a regular basis. In addition trade bodies or organisations may submit codes of practice to the National Consumer Agency for review and approval. Once approved the Codes of Practice may then be relied upon in court proceedings which effectively gives a statutory basis to many of the voluntary Codes of Practice which are used by various industries in Ireland.

For further information please contact Duncan Grehan or Conor Griffin who will be happy to assist.