Consumers in Chelmsford and throughout the UK need to undertake informed decisions when it comes to making decisions about as to whether to purchase businesses goods and/or services. This is because consumers must account for what is meant by the concept of taking an ‘informed decision’ in the face of any potential undue influence.
The first point that should be made here is that it is not difficult to see the relevance of information to the general notion of undue influence that is to be contemplated. The consumer that is put into the position of having to make a transactional decision has particular concerns or emotions (flowing from misfortunes or other circumstances) or (to take the more traditional UK instances, which may well also be covered) has a relationship of trust either with the trader or with a third party. The fundamental problem here is that these concerns or emotions (or the trust reposed in the trader or a third party) may result in the consumer not reflecting fully on the nature of the decision and the risks associated with it.
In other words, the result may be that the consumer does not make an informed decision.
So, there is no particular controversy about the general idea that undue influence causes an information problem for the consumer. The question, however, is as to what particular model of informed decision making is at work here. The less protective (standardised trader transparency) model is one in which there is always considered to be an informed decision (and, therefore, no undue influence, notwithstanding the exertion of pressure through exploitation of a position of power) as long as the trader makes reasonably transparent the nature of the transactional decision and the risks associated with it.
Of course, presumably even this would need to be a higher level (or at least different type) of transparency than is required of contract terms under the Unfair Terms in Consumer Contracts Regulations; if it is to go any way to recognising the lower than normal level of information processing ability caused by the misfortune or other circumstances that have triggered the particular suspicion of undue influence in the first place. Equally, to the extent what is required is disclosure of particular information as to the nature and risks of the transaction, something more (or different) must be needed than is required under the misleading omission rule discussed above (where, we are only dealing with normal information processing difficulties and not with the special difficulties caused by misfortune or other circumstances having a particular effect on the consumer).
So, even on a model treating trader transparency as a ‘defence’, a very high degree of clarity on all key risks would be the least that would be needed. However, in addition, such a model would surely often need (where the risks were sufficiently substantial) to involve there being a period of time for reflection (possibly extending to a post-decision cancellation period).
Nevertheless, there is also a potentially more protective approach in which, if the risks are sufficiently material in substance, such standardised trader transparency (even when it involves extra time for reflection and the opportunity to cancel) may not be sufficient. The exploitation, through pressure, of the misfortune or other consumer circumstances, may be viewed as having such a significant impact on the consumer that standardised transparency will not be enough to create the conditions for an informed decision. This approach recognises that the general information processing difficulties likely to be faced by consumers when dealing with standardised literature from traders are likely to be exacerbated by the particular misfortune or other circumstances as well as by the pressure from the trader. These difficulties, possibly along with the consumer already being psychologically committed to the decision, may mean that consumers do not fully reflect on the risks even if they are made transparent by the trader and there is time for reflection and a cancellation opportunity.
There is a model that might be regarded as somewhere in the middle. This is one in which, while trader transparency is not necessarily enough, independent advice is always enough to establish the required level of informed consent. Of course, it is hard to see how consumers could be required to take advice where it is impractical, too costly etc. relative to the value of the transaction. In such cases it must surely be that failure to take advice does not prevent there being undue influence. In such cases, then we return, effectively, to the choice between the two approaches above; one in which trader transparency is always enough and another in which such trader transparency is sometimes not enough.
So which is the correct approach?
It is certainly the case that trader transparency as to the nature, risks etc. of the transaction does not prevent there being (what appears to be a type of) undue influence in cases where the trader suggests that his livelihood or job is in jeopardy. Such a practice (being on the Schedule of ‘always unfair’ practices discussed in an earlier blog post) is unfair in itself. Of course, it might be said that this is no guide to the proper approach under the general aggressive practices clause as none of the practices on the Schedule involve the need to establish an impact on informed (or any other type of) decision making. Yet, presumably the presence of a practice on the Schedule provides at least some indication that such a practice is thought almost always to be likely to influence consumers; and that this influence will be so strong that countervailing factors-such as trader transparency-will not overcome it. This being the case, if the effect of concerns over the trader’s livelihood is regarded as having such a powerful effect on informed decision making that trader transparency cannot overcome it then it is had to see how at least some other types of concerns or emotions (especially those more related to the consumer or his family) cannot be viewed as having a similar effect when the general aggressive practices clause is applied.
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