A guide to Non-Fungible Tokens (NFTs), 2023 - Flipbook - Page 31
Unfair commercial practices
Traders are constrained by laws which require them to deal fairly
with consumers during the whole lifetime of a consumer to trader
transaction: advertising, marketing, entry into the contract,
performance and enforcement.
Certain practices are always unfair and prohibited, such as falsely stating that a
product will be available for a very limited time in order to obtain an immediate
decision. Other practices, such as providing false or misleading information,
omitting material information, acting without due diligence or aggressively, are
unfair if they cause the average consumer to take a transactional decision that
they would not otherwise have made. Most unfair commercial practices are
criminal offences. A consumer who can prove that a misleading or aggressive
practice led them to enter into a contract or make a payment has the right to
have the transaction unwound and to claim damages. As with the right to cancel
mentioned above, blockchain technology’s nature as a fixed record presents
somewhat of an obstacle to the unwinding of transactions.
Advertising
The Advertising Standards Agency (ASA) has issued guidance and an
enforcement notice in relation to cryptoasset advertising, stating that
it is treating this as a red alert priority issue.
Key takeaways for those advertising cryptoassets, such as NFTs, include the
need to flag clearly that that cryptocurrencies are unregulated in the UK, that
profits may be subject to capital gains tax and that the value of investments can
go up and down. In addition, advertisers must not state or imply that investment
decisions are trivial, simple, easy or suitable for everyone, or otherwise imply a
sense of urgency to buy or create a fear of missing out, or that investments are
“low risk”.
30
