The regulatory regime which has seen the introduction of material and up front information is to transfer to the Competition and Markets Authority (CMA) following implementation of The Digital Markets, Competition and Consumers Act (DMCC), which passed into law on 24 May 2024.
DMCC replaces and updates the Consumer Protection from Unfair Trading Regulations 2008, better known at CPRs, with the CMA imbued with new powers to decide whether consumer protection laws have been breached without having to take businesses to court, and take direct action to through fines and redress.
The CPRs have driven efforts to introduce more information to would-be home buyers earlier in the transaction; to enable them to make a more informed ‘transactional decision.’ In December 2023 the National Trading Standards Estate and Letting Agent Team (NTSELAT) published its final guidance for estate agents on what constitutes material information and expectations around disclosure for would-be buyers following years of uncertainty of what information estate agents should be disclosing as part of a property sale.
Concerns around the legal liability of conveyancers to disclose material information have been raised in the past but the consistent response of The Law Society has been to refer to its practice note which references the case of Office of Fair Trading v Purely Creative Ltd [2011] CTLC 45, in which what a purchaser “needs” is to be understood in its proper “context”, which includes the fact that sellers can rely on the caveat emptor principle, and their solicitors owe them a duty of confidentiality.
There is therefore unlikely to be an omission of “material information” (and a solicitor will not, therefore, be in breach of the CPRs) if a solicitor fails to disclose information which is confidential, or falls within the caveat emptor principle
The implications of the CMAs’ taking ownership of consumer protection are yet to be clarified, with the CMA to publish an ‘approach document’ in the coming weeks which will include ‘more detail on our enforcement priorities for the first 12 months’ says CMA Chief Executive, Sarah Cardell.
“We will use these new provisions to safeguard people from harmful and unfair treatment, and to foster the level-playing field for the vast majority of businesses who want to do the right thing for their customers. We will be… working hard to support businesses with compliance, conscious that – especially for small businesses – the burden of following the rules must be proportionate.”
In any event in the first instance the CMA have said it would focus on the most ‘egregious’ harms.
Much of its rhetoric has focused on efforts to tackle ‘outrageous fake reviews’ and ‘sneaky hidden fees’ which are now banned under the DMCC.
What it describes as ‘mandatory’ fees, such as admin or booking fees, must now be included in any headline price and must not be ‘dripped in’ through the checkout process, essentially increasing the fees people thought they were paying. The CMA says £2.2bn is spent on ‘unavoidable’ hidden fees with the new requirements designed to bring greater transparency to transactions.
Critically, the ban covers ‘unavoidable’ hidden fees only. Optional fees, and the CMA uses examples like airline seats and luggage upgrades for flights, are not included. Whether this has any bearing on the referral fees debate is yet to be seen.
Fake reviews are also be tackled as part of the updated legislation with 90% of consumers said to use reviews as part of their buying decision. Website hosts are to be held accountable for the review on their website so firms need to be sure what they publish is accurate. Businesses and online platforms will be legally required to take steps to prevent and remove the publication of fake reviews that are published on their websites say the CMA.
Justin Madders, Minister for Employment Rights, Competition and Markets, said:
“From today consumers can confidently make purchases knowing they are protected against fake reviews and dripped pricing.
These changes will give consumers more power and control over their hard-earned cash, as well as help to establish a level playing field by deterring bad actors that undercut compliant businesses, helping to deliver economic stability as part of our Plan for Change.”
2 responses
Last Friday, the CMA published:
• Streamlined unfair commercial practices guidance (CMA207), which is accompanied by a separate module containing example case studies and a separate technical background note
• A short guide to what businesses need to know about unfair commercial practices
• Fake reviews guidance (CMA208), which is accompanied by a short guide for businesses: publishing consumer reviews and complying with consumer protection law
This follows a six-week consultation on the draft guidance on the protection from unfair trading provisions in the Digital Markets, Competition and Consumers Act 2024, which took place between 11 December 2024 and 22 January 2025.
The CMA has also published its response to the consultation as well as the non-confidential responses to this consultation.
The consultees included the Property Lawyers Alliance (PLA).
PLA pointed out to the CMA that ‘Land’ was not a ‘product. ‘ PLA sought sector-specific examples of how the guidance could/would be enforced in the sale of land. The CMA stated in its responses that it would not, or could not, provide such examples.
It will be interesting to see what the CMA determines are its priorities concerning enforcement since it can punish offenders without court action.
The message for those vested interests wanting estate agents to become ‘quasi-lawyers’ is clear: be careful what you wish for
Not quite, at least according to my understanding. For instance, unfair commercial practices will primarily be policed by local trading standards, which implies that the CMA will mainly get involved if there are regional or national infringements.