Potential new rules that could protect consumers from unfair business practices have been welcomed by the United Kingdom's Retail Motor Industry Federation (RMI).

The European Union (EU) has adopted a proposal for a directive on unfair commercial practices that would clarify consumer rights and make cross-border trade more simple. The directive would protect consumers from misleading and aggressive practices, such as deceptive advertising or illusory offers, whether they buy from a local outlet or via a website based in another member state. The directive could be in force as soon as 2005.

According to RMI chief executive Matthew Carrington, the new rules would bring other retail sectors in line with the retail motor sector.

If the directive comes into force, it could offer consumers the kind of protection on many products that they enjoy already when they deal with a RMI member. For those buying a car, it could give added protection behind the Good Garage Code, which will be operational in 2004," Carrington said.

Another aspect of the directive would make it illegal for a business to claim to be a signatory to a code of conduct when it is not.

Carrington added: 'Not only would this protect consumers, but it would also mean that if a business claimed to belong to the RMI, or the Good Garage Code when in fact it did not, it would be breaking the law."

The directive would also eliminate cross-border trade loopholes that can be abused by so-called 'rogue traders', making it safer for consumers, as well as for business-to business trade.

"It will also allow consumers the kind of cross-border retail opportunities that car buyers have enjoyed for the past decade, as well as allow the retail motor sector to fully explore the opportunities offered by the Block Exemption Regulation, coming into force in October 2003," Carrington said.