UNFAIR COMMERCIAL PRACTICES

Our purpose is to assist consumers when making cross-border purchases within the EEA

The Consumer Rights Division of the Consumer Agency enforces Act No. 57/2005, on the surveillance of unfair business practices and market transparency. This Icelandic law is an implementation of the Unfair Commercial Practises directive which applies throughout the EEA.

What the law means:
The law applies to any business activity, including the manufacturing industry and trade in goods and services, irrespective of whether such operation is conducted by individuals, companies, public entities or others.

Amongst other things the law states that:
- Advertisements shall be prepared in such a manner as to preclude any doubt concerning their nature as advertisements.   These shall be clearly separated from other subjects of the media.
- A firm shall be able to submit evidence of assertions presented in advertisements. This means that if a company maintains in an advert that it has the best products or the best prices it needs to be able to prove such statements.
- Clearance sales or other sales at reduced prices may only be advertised or announced if prices are actually reduced.  Care shall be taken that price markings clearly show what was the original price of the goods. See also rules on sales or other retail activities where goods are sold at a reduced price.
- A declaration of warranty may be given only provided it grant the receiving party more extensive right than he holds according to Laws in force. See further info.
- An undertaking selling goods or providing services to consumers shall label the goods or services with the price or display the price at the point of sale in such a prominent manner as to be easily visible to consumers.

UNFAIR COMMERCIAL PRACTICES

Commercial practices are unfair if these violate good commercial practices vis-à-vis consumers and considerably upset or are likely to upset considerably the financial conduct of consumers.

Misleading commercial practises are forbidden, commercial practices are misleading if these are likely to deceive consumers or are of such a nature that consumers are granted incorrect information (for instance about the nature of goods and services, the price or need for such services, and about the legal rights of the consumer) for the purpose of influencing their decision concerning trade.

Commercial practices are misleading if no account is given of information which may be considered to be of general interest for consumers or if this is kept secret and is liable to influence a consumer’s determination to engage in business.

There is also an Annex to the directive listing commercial practises which are always unfair and therefore forbidden. Amongst the things listed as forbidden in the Annex are:

- Falsely stating that a product will only be available for a very limited time, or that it will only be available on particular terms for a very limited time, in order to elicit an immediate decision and deprive consumers of sufficient opportunity or time to make an informed choice.
- Presenting rights given to consumers in law as a distinctive feature of the trader's offer.
- Promoting a product similar to a product made by a particular manufacturer in such a manner as deliberately to mislead the consumer into believing that the product is made by that same manufacturer when it is not.
- Establishing, operating or promoting a pyramid promotional scheme where a consumer gives consideration for the opportunity to receive compensation that is derived primarily from the introduction of other consumers into the scheme rather than from the sale or consumption of products.
- Claiming that the trader is about to cease trading or move premises when he is not.
- Creating the false impression that the consumer has already won, will win, or will on doing a particular act win, a prize or other equivalent benefit, when in fact either their is no prize or the consumer needs to pay or incur some cost in order to claim the prize.

Further reading:

Unfair Commercial Practices

See also Frequently asked questions

Info on Unfair Commercial Practices from DG SANCO‘s website 
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