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Case Details

Case Details
National ID Civil Court (First Hall), Judgement 85/2015/1
Member State Malta
Common Name L-Ghaqda tal-Konsumaturi et vs GlocalCapital Financial Management Limited (C30053)
Decision type Court decision, first degree
Decision date 14/01/2019
Court Civil Court (First Hall)
Subject
Plaintiff
Defendant
Keywords B2C, misleading actions, misleading omissions, misleading commercial practices, unfair commercial practices

Unfair Commercial Practices Directive, Chapter 2, Section 1, Article 6 Unfair Commercial Practices Directive, Chapter 2, Section 1, Article 7

ECLI:MT:CIVP:2019:114955

Approaching a consumer with a product to invest in, knowing that the consumer does not understand the investment and without explaining the risks attached to investing in such a product, amounts to a misleading action and a misleading omission on the part of the trader. Such behaviour shows that the trader engaged in an unfair commercial practice. Given that a number of consumers were wronged in the same manner by the same trader, the Court allowed the plaintiff in this judgement to bring a collective action on behalf of the consumers.

Relevance: Outlines how certain commercial practices on the part of a trader can be unfair and to the detriment of consumers.

The plaintiff of this judgement brought a collective action against the defendant trader on behalf of several consumers that were asked to invest substantial amounts of money in a bond held by the defendant. None of the consumers approached by the defendant trader understood what they were investing their money in. Furthermore, the defendant trader portrayed the investment as one having a low risk attached to it. This was not the case and, as a result of the trader’s misleading actions and omissions, the consumers lost their money.

What constitutes an unfair commercial practice?

Based on the fact that the consumers did not understand the product they were approached to invest in by the defendant trader, they could not make an informed decision prior to investing in the bond held by the defendant. Their economic behaviour was, therefore, materially distorted by the defendant’s misleading actions and misleading omissions.

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The Court found for the plaintiff and dismissed the defendant’s claims.