Secretary of State for Business, Innovation & Skills v PLT Anti-Marketing Ltd

Under Consumer Protection from Unfair Trading Regulations 2008, information that a trader’s service is available free from the very providers with whom it will register the consumer may be material information. The relevant question is whether disclosure is necessary to enable the average consumer to take an informed transactional decision. A supplier need not generally disclose its mark-up or investigate every competing product, but it must disclose that the service for which it charges is available free elsewhere where that fact is central to the service offered. A reasonably well-informed, observant and circumspect consumer may nevertheless be likely to transact differently if the omission occurs during an immediate telephone sale.

The Secretary of State presented a public-interest winding-up petition against PLT Anti-Marketing Ltd and sought the appointment of a provisional liquidator. PLT gave undertakings restricting its trading and requiring disclosure that customers could register themselves with the Telephone Preference Service and Mail Preference Service for free.

PLT later applied to vary those undertakings so that it could trade while disclosing only that it would register customers with the services. The central issue was whether that proposed practice would breach regulation 6 of the Consumer Protection from Unfair Trading Regulations 2008.

1. Procedure. The court treated the variation application as a preliminary issue and determined it finally. Although interim undertakings would ordinarily require a material change of circumstances before being reopened, the compressed circumstances in which they were given, the absence of a cross-undertaking in damages, the parties’ readiness to argue the issue, and the overriding objective justified determination under the court’s case-management powers.
2. Regulation 6. A misleading omission requires a commercial practice which omits or hides material information, or presents it unclearly, and which causes or is likely to cause the average consumer to take a transactional decision otherwise than he would have done.
3. The fact that the service offered by PLT was available free from the Telephone and Mail Preference Services was material information. The court applied the concept of consumer need explained in The Office of Fair Trading v Purely Creative [2011] EWHC 106 (Ch). The information was necessary to enable an informed decision because registration with those services was an important part of the paid service and was available free from the very providers PLT would use.
4. There was no general obligation to disclose a supplier’s mark-up or to investigate the entire market. That did not answer the present case, where PLT’s own business model depended on charging for registration that consumers could obtain free.
5. The omission was likely to affect the average consumer’s transactional decision. The sale occurred by telephone, with the consumer signing up immediately. The court rejected the contention that the average consumer would already know both of the services and know that registration was free.
6. The proposed manner of trading would breach regulation 6. There was therefore no material change justifying review of the undertakings, and the variation application was dismissed.

First-instance decision. The judgment was described as a sequel to an earlier judgment in the same proceedings, [2013] EWHC 3625 (Ch).