Heating and insulation green claims under CMA review

The question

What is the Competition and Markets Authority's (CMA) new guidance on the marketing of heating and insulation products and how does this fit into the wider consumer protection picture?

The key takeaway

Following a review that found evidence of potentially misleading business practices, the CMA has published new guidance on the advertising and marketing of heating and insulation products and services. The guidance aims to bolster and protect consumer laws by assisting businesses in avoiding making misleading green claims to consumers. One of the UK's leading boiler brands, Worcester Bosch, has subsequently committed to changing its marketing strategy to ensure that consumers are able to make informed purchasing decisions. 

The background

In September 2022, the CMA began a two-year project in which it sought to investigate consumer protection in the UK's green heating and insulation sector, that ultimately led to the regulator launching an investigation into Worcester Bosh's compliance in October 2023. The CMA simultaneously wrote to 12 other businesses to advise that they may also be in breach of consumer protection law.

The development

Fast-forward a year, and the CMA has since published compliance advice (in July 2024) to assist businesses in adhering to their obligations under consumer protection law when marketing green heating and insulation products for home use. Products in this category include heat pumps, biomass boilers, solar thermal panels, and home insulation products. The scope of the advice also extends to related services such as the marketing, selling, design, installation, servicing, and maintenance of these products. 

The new advice focuses on the upfront marketing and advertising of in-scope products by encouraging any claims, information and quotes presented by businesses to be truthful, accurate, and complete, in order to allow consumers to make informed choices before purchasing. The guidance emphasises that depicting false or deceptive information concerning a product or service is likely to constitute a misleading action under the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) if it results or is likely to result in a consumer making a purchasing decision they would not have made otherwise. Some of the main principles of the guidance include:

• presenting headline price information accurately, comprehensively, honestly and clearly when referring to government funding access and special deals on product bundles;
• product claims must be well-explained, realistic, unexaggerated and supported by evidence.

The CMA began investigating well-known boiler brand, Worcester Bosch, in October 2023 following concerns that the company was misleading consumers into believing that buying a Worcester Bosch boiler, as opposed to another brand's, would "future-proof" their heating system and reduce their carbon footprint. The outcome of the CMA's investigation into the brand was for Worcester Bosch to give undertakings to the CMA that it will change its marketing strategy, to allow consumers to make informed purchasing decisions. The nature of the undertakings (made voluntarily in August 2024) means that the company has not admitted to any wrongdoing or liability. Further to revising its marketing material, the company has also committed to contacting its network of accredited installers and third-party retailers to also update any non-compliant marketing material. The implementation of Worcester Bosch's commitments will be monitored by the CMA to ensure compliance.

Why is this important?

The CMA is all over green clams and the investigation into Worcester Bosch highlights just how actively it will pursue misleading green claims, in particular when the activity reflects wider industry concerns. Another helpful example is the CMA's recent investigation into misleading green claims in the fashion industry (the impact of which remains ongoing).  Vigilance around compliance with consumer protection laws remains a high business priority, particularly in light of the impending implementation of the Digital Markets, Competition, and Consumers Act 2024 (DMCCA). The DMCCA establishes new consumer protection laws and provides the CMA with the power to directly enforce breaches with fines of up to 10% of the offending party's global turnover. 

Any practical tips?

All businesses, not just those providing heating and insultation products, are advised to review carefully any current or planned marketing campaigns around sustainability and green claims. Helping the marketing team understand the full implications of pushing green credentials too far is an important step in the wider compliance journey, including avoiding (potentially hefty) CMA fines next year.

Autumn 2024