Question

The information you convey to customers about the product/ service you offer must be truthful, accurate, current and reliable. Describe (100–120 words) the consequences of failing to do this by commission or omission.

Answer 1

Solution:-

The information we convey to consumers about the product/service we offer must be truthful,accurate, current and reliable. The financial sector is subject to various legislative and regulatory controls. Some of this legislation applies to the promotion, marketing and sale of products/services,whilst other legislation applies to consumer interaction and to the safety and quality of products.

We have both a legal and ethical responsibility to honestly represent the products/services offered.We should know and comply with legal requirements in selling products/services and to be aware that the repercussions of non-compliance will impact on us personally as well as on the organisation for which we work.

Legislation applicable to the promotion and sale of goods include the Uniform Consumer Credit, fair trading, privacy, and the sale of goods legislation, plus many others specific to different types of consumer based activities.

They cover areas such as:

• Safety of goods and services sold
• Promotion and advertising activities
• Weights and measures
• Misrepresentation
• Credit provision – consumer credit
• Charitable funds
• Classification of films and publications etc

Businesses are not allowed to make statements that are incorrect or likely to create a false impression.

This rule applies to their advertising, their product packaging, and any information provided to you by their staff or online shopping services. It also applies to any statements made by businesses in the media or online, such as testimonials on their websites or social media pages.

For example, businesses cannot make false claims about:

• the quality, style, model or history of a product or service
• whether the goods are new
• the sponsorship, performance characteristics, accessories, benefits or use of products and services
• the availability of repair facilities or spare parts
• the need for the goods or services
• any exclusions on the goods and services.

It makes no difference whether the business intended to mislead you or not. If the overall impression left by a business’s advertisement, promotion, quotation, statement or other representation creates a misleading impression in your mind—such as to the price, value or the quality of any goods and services—then the behaviour is likely to breach the law.

There is one exception to this rule. Sometimes businesses may use wildly exaggerated or vague claims about a product or service that no one could possibly treat seriously or find misleading. For example, a restaurant claims they have the ‘best steaks on earth’. These types of claims are known as ‘puffery’ and are not considered misleading.

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