Unfair Commercial Practices

T he Unfair Commercial Practices From Business to Consumers Law (“L.103/(I)2007” or the “Law”) implements Directive 2005/29/EC of the European Parliament concerning unfair business-to-consumer commercial practices in the internal market.

 Under article 3 (1) of the Law 103(I)/2007, this applies:

 “to the unfair commercial practices of businesses to consumers as defined in Article 4, before, during and after a commercial transaction relating to a particular product.”

Article 2 of Law defines as a commercial practice “any act, omission, course of conduct or representation, commercial communication including advertising and marketing, by a trader, directly connected with the promotion, sale or supply of a product to consumers”.

Article 4 (2) of Law 103 (I) / 2007 defines three categories of unfair commercial practices.

The first category of unfair practices includes a practice which (1) is contrary to the requirements of professional diligence and (2) materially distorts or is likely to materially distort the economic behaviour with regard to the product of the average consumer whom it reaches or to whom it is addressed, or of the average member of the group when a commercial practice is directed to a particular group of consumers. Based on the definitions in article 2 of Law 103 (I) / 2007, “professional diligence” means:

“The measure of specific technical capacity and care that a trader is reasonably expected to show to consumers, in proportion to fair market practice and/or the general principle of good faith, in the trader ‘s field of business.”

A material distortion of consumers’ economic behavior is the use of a commercial practice aimed at significantly reducing the consumer’s ability to make an informed decision, resulting in a transaction decision that they would not otherwise have made. The average consumer means the consumer who is reasonably well-informed and reasonably observant and circumspect, taking into account social, cultural and linguistic factors. “Transaction decision” means any decision taken by a consumer concerning whether, how and on what terms to purchase, make payment in whole or in part for, retain or dispose of a product or to exercise a contractual right in relation to the product, whether the consumer decides to act or to refrain from acting.

The second category is where a practice “is misleading, as defined in Articles 5 and 6” and the third category are practices which are aggressive, as defined in Articles 7 and 8.

Unfair commercial practices are prohibited under Article 4(1) of the Law.

Article 4(4) stipulates that the commercial practices mentioned in Annex I of Law 103(I)/2007 are always considered to be unfair. This Annex, with title “Commercial practices which are considered unfair under any circumstances” is divided into two parts. Part A is entitled “Misleading Commercial Practices” while Part B is entitled “Aggressive Commercial Practices“.


The misleading commercial practices contained in Annex I of the law are the following:

1)  Claiming to be a signatory to a code of conduct when the trader is not.

2) Displaying a trust mark, quality mark or equivalent without having obtained the necessary authorisation.

3) Claiming that a code of conduct has an endorsement from a public or other body which it does not have.

4) Claiming that a trader (including his commercial practices) or a product has been approved, endorsed or authorised by a public or private body when he/it has not or making such a claim without complying with the terms of the approval, endorsement or authorisation.

5) Making an invitation to purchase products at a specified price without disclosing the existence of any reasonable grounds the trader may have for believing that he will not be able to offer for supply or to procure another trader to supply, those products or equivalent products at that price for a period that is, and in quantities that are, reasonable having regard to the product, the scale of advertising of the product and the price offered (bait advertising).

6)  Making an invitation to purchase products at a specified price and then:

a) refusing to show the advertised item to consumers; or

b) refusing to take orders for it or deliver it within a reasonable time; or

c)  demonstrating a defective sample of it,

with the intention of promoting a different product (bait and switch)

7) 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.

8)  Undertaking to provide after-sales service to consumers with whom the trader has communicated prior to a transaction in a language which is not an official language of the Member State where the trader is located and then making such service available only in another language without clearly disclosing this to the consumer before the consumer is committed to the transaction.

9)  Stating or otherwise creating the impression that a product can legally be sold when it cannot.

10 )  Presenting rights given to consumers in law as a distinctive feature of the trader’s offer.

11) Using editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable by the consumer (advertorial). This is without prejudice to Council Directive 89/552/EEC (1).

12) Making a materially inaccurate claim concerning the nature and extent of the risk to the personal security of the consumer or his family if the consumer does not purchase the product.

13) 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.

14) 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.

15) Claiming that the trader is about to cease trading or move premises when he is not.

16) Claiming that products are able to facilitate winning in games of chance.

17)Falsely claiming that a product is able to cure illnesses, dysfunction or malformations.

18)  Passing on materially inaccurate information on market conditions or on the possibility of finding the product with the intention of inducing the consumer to acquire the product at conditions less favourable than normal market conditions.

19)Claiming in a commercial practice to offer a competition or prize promotion without awarding the prizes described or a reasonable equivalent.

20) Describing a product as ‘gratis’, ‘free’, ‘without charge’ or similar if the consumer has to pay anything other than the unavoidable cost of responding to the commercial practice and collecting or paying for delivery of the item.

21) Including in marketing material an invoice or similar document seeking payment which gives the consumer the impression that he has already ordered the marketed product when he has not.

22) Falsely claiming or creating the impression that the trader is not acting for purposes relating to his trade, business, craft or profession, or falsely representing oneself as a consumer.

23) Creating the false impression that after-sales service in relation to a product is available in a Member State other than the one in which the product is sold


The Aggressive Commercial Practices of Annex I are any of the following:

24) Creating the impression that the consumer cannot leave the premises until a contract is formed.

25) Conducting personal visits to the consumer’s home ignoring the consumer’s request to leave or not to return except in circumstances and to the extent justified, under national law, to enforce a contractual obligation.

26) Making persistent and unwanted solicitations by telephone, fax, e-mail or other remote media except in circumstances and to the extent justified under national law to enforce a contractual obligation. This is without prejudice to Article 10 of Directive 97/7/EC and Directives 95/46/EC (2) and 2002/58/EC.

27) Requiring a consumer who wishes to claim on an insurance policy to produce documents which could not reasonably be considered relevant as to whether the claim was valid, or failing systematically to respond to pertinent correspondence, in order to dissuade a consumer from exercising his contractual rights.

28) Including in an advertisement a direct exhortation to children to buy advertised products or persuade their parents or other adults to buy advertised products for them. This provision is without prejudice to Article 16 of Directive 89/552/EEC on television broadcasting.

29) Demanding immediate or deferred payment for or the return or safekeeping of products supplied by the trader, but not solicited by the consumer except where the product is a substitute supplied in conformity with Article 7(3) of Directive 97/7/EC (inertia selling).

30) Explicitly informing a consumer that if he does not buy the product or service, the trader’s job or livelihood will be in jeopardy

31)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:

– there is no prize or other equivalent benefit, or

– taking any action in relation to claiming the prize or other equivalent benefit is subject to the consumer paying money or incurring a cost


In accordance with article 5(1) of the Law:

« A commercial practice shall be regarded as misleading if, in its factual context, taking account of all its features and circumstances and the limitations of the communication medium, it omits material information that the average consumer needs, according to the context, to take an informed transactional decision and thereby causes or is likely to cause the average consumer to take a transactional decision that he would not have taken otherwise».

Under article 5(2), the elements as to which the trader may mislead, include the existence and nature of the product, the main characteristics of the product, the extent of the trader’s commitments, the price, the nature, attributes and rights of the trader as well as the consumer’s rights.

As already stated, in case a practice is considered as misleading under article 5(1), then there is no need to prove that it also breaches the requirements of professional diligence (in accordance with article 4(2)). The fact that the trader breaches the requirements of article 5(1) is enough for a practice to be considered as unfair.

In accordance with article 5(3), a commercial practice shall also be regarded as misleading if, in its factual context, taking account of all its features and circumstances, it causes or is likely to cause the average consumer to take a transactional decision that he would not have taken otherwise, and it involves:

a) any marketing of a product, including comparative advertising, which creates confusion with any products, trade marks, trade names or other distinguishing marks of a competitor;

b) non-compliance by the trader with commitments contained in codes of conduct by which the trader has undertaken to be bound, where:

– the commitment is not aspirational but is firm and is capable of being verified, and

– the trader indicates in a commercial practice that he is bound by the code.

In accordance with article 2 of the Law. 103(I)/2007, a code of conduct means “an agreement or set of rules not imposed by law, regulation or administrative provision of a Member State which defines the behaviour of traders who undertake to be bound by the code in relation to one or more particular commercial practices or business sectors”

Furthermore, a commercial practice is considered as misleading in case where, taking into account features and circumstances and the limitations of the communication medium, a trader hides or provides in an unclear, unintelligible, ambiguous or untimely manner such material information that the average consumer needs, according to the context, to take an informed transactional decision, or fails to identify the commercial intent of the commercial practice if not already apparent from the context, and where, in either case, this causes or is likely to cause the average consumer to take a transactional decision that he would not have taken otherwise.

Where a trader conceals material information or provides the information in a vague, incomprehensible, ambiguous or in an untimely manner, taking into account the matters mentioned in article 6(1) of Law 103(I)/2007, or when it does not specify the purpose of the commercial practice, if this is not already apparent from the context, then it is presumed that there is a misleading omission, meaning of course that the omission has or may result in the average consumer making a transactional decision which he would not have otherwise taken. Material information are the information requirements imposed by various legislations, some of which are mentioned indicatively in Annex II of Law 103(I)/2007.

Law 103(Ι)/2007 contains a specific provision which mentions the information which may be regarded as material in cases there is an invitation to purchase. Under article 2 of the Law:

“invitation to purchase” means a commercial communication which indicates characteristics of the product and the price in a way appropriate to the means of the commercial communication used and thereby enables the consumer to make a purchase

Under article 6(4) of the Law, in the case of an invitation to purchase, the following information shall be regarded as material:

a) the main characteristics of the product, to an extent appropriate to the medium and the product;

b) the geographical address and the identity of the trader, such as his trading name and, where applicable, the geographical address and the identity of the trader on whose behalf he is acting;

c) the price inclusive of taxes, or where the nature of the product means that the price cannot reasonably be calculated in advance, the manner in which the price is calculated, as well as, where appropriate, all additional freight, delivery or postal charges or, where these charges cannot reasonably be calculated in advance, the fact that such additional charges may be payable;

d) the arrangements for payment, delivery, performance and the complaint handling policy, if they depart from the requirements of professional diligence;

e) for products and transactions involving a right of withdrawal or cancellation, the existence of such a right.

Product features can be described in either words or images, even if the same words or images are used to describe a product that is available in many forms. In such a case, the obligation to indicate the characteristics of the product is fulfilled if the words or images enable the consumer to make a transactional decision.

Furthermore, in case where the commercial communication contains a starting price, i.e. the lowest possible purchase price of the product, the condition for stating the price of the product may be fulfilled in case the product exists in another form or with other content at non-listed prices. In such a case, the obligation to indicate the price is met if the indicated starting price allows the consumer to make a transactional decision. 


Under article 7 of Law. 103/2017, a commercial practice is aggressive if, in its factual context, taking account of all its features and circumstances, by harassment, coercion, including the use of physical force, or undue influence, it significantly impairs or is likely to significantly impair the average consumer’s freedom of choice or conduct with regard to the product and thereby causes him or is likely to cause him to take a transactional decision that he would not have taken otherwise.

Undue influence means exploiting a position of power in relation to the consumer so as to apply pressure, even without using or threatening to use physical force, in a way which significantly limits the consumer’s ability to make an informed decision.

In determining whether a commercial practice uses harassment, coercion, including the use of physical force, or undue influence, account is taken of its timing, location, nature or persistence, the use of threatening or abusive language or behaviour, the exploitation by the trader of any specific misfortune or circumstance of such gravity as to impair the consumer’s judgement, of which the trader is aware, to influence the consumer’s decision with regard to the product, any onerous or disproportionate non-contractual barriers imposed by the trader where a consumer wishes to exercise rights under the contract, including rights to terminate a contract or to switch to another product or another trader as well as any threat to take any action that cannot legally be taken.


The Consumer Protection Service, is the competent authority for enforcing the law. In case a Trader fails to abide to an order issued by the Consumer Protection Service then that Trader is liable to criminal sanctions as well as an administrative fine.

Furthermore, persons with a legal interest (i.e. consumers) may report to the Consumer Protection Service, a commercial practice which they believe has violated the law and/or submit an application to the Court for the issuance of a decree in case the provisions of the Law are violated.

The above information does not constitute legal advice.

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