The Consumer Protection Act 1987 makes it a criminal offence to give a misleading price indication about the price of goods or services. It applies however you give the price indication.

There are many different ways in which a misleading price indication can be given. The government has produced a ‘Code of Practice for Traders on Price Indications' which gives practical advice. There is no legal requirement to comply with this code but the Act provides for a defence of due diligence, eg that you have taken all reasonable steps to avoid committing the offence of giving a misleading price indication. Failure to follow the code of practice may make it difficult to show this.

The most common misleading price indication is quoting one price yet a different one is charged. Sometimes misleading price indications are caused by human error other times by computer or electronic error. In some cases, traders deliberately overcharge customers in an attempt to make more money. No matter what the reason the misleading price indication has occurred, it is still an offence.

Therefore, great emphasis should be placed on staff training and pricing policies. It is strongly recommended that price checks are made on a regular basis and recorded. Being able to show that price checks are carried out may help a trader establish the due diligence defence.

During a visit, a trading standards officer may scan a number of items through the till whilst it is on training mode.

It is recognised that traders want to promote their goods and services in a way that will increase sales. A common practice is to show a reduction compared with a previous price, since consumers think they are getting good value for money.

• the Code of Practice recommends that for goods and services other than food and drink, the previous price should be the last price at which the goods or services were available to consumers in the previous 6 months
• the goods or services have been available to consumers at that price for at least 28 consecutive days in the previous 6 months
• the previous price should have applied (as above) for that period at the same establishment where the reduced price is now being offered.  

For food and drink, you need not give an explanation if the previous price in a comparison has not applied for 28 consecutive days. This is provided that it was the last price the goods were on sale in the last 6 months and in the same establishment where the reduced price is being offered.

It is strongly recommended that you read the Code of Practice carefully.

What is the penalty for non-compliance?

The penalty, if found guilty of non-compliance, is a fine of up to £5 000 for summary conviction and an unlimited fine for conviction on indictment.