Warning over misleading business names

Your business name is the cornerstone of your brand – ensure it does not mislead

Ensuring your business has the right name is very important. Customers may infer a lot from your business name and first impressions count. It is also vital, especially from a legal perspective, that your business name reflects exactly what your business does. You should avoid misleading or undesirable trading names.

Warning over business names

The Office of Fair Trading (OFT) has warned businesses to avoid using misleading or undesirable business names. The OFT can rule against names that mislead customers about a business’ commercial status. Commercial businesses should avoid using names that imply that:

  • they are a public sector organisation or agency
  • they are a charity
  • they offer free or impartial advice when they charge for advice

The regulator also wants businesses to avoid names that give a misleading or otherwise undesirable indication of:

  • the services provided
  • the cost of products or services
  • the scale of the business, including its geographical scope
  • the relationship of the business to other businesses

Example business names

Examples of businesses names that would be challenged by the OFT are:

  • ‘Cheap Loans for All’ – a name that implies credit is available regardless of the borrower’s financial circumstances
  • ‘No Interest Loans’ or ‘Lowest UK Prices’ – these names would only be acceptable where there is evidence that the name is an accurate description of the services or product on offer
  • ‘Belfast Office of Fair Advice’ – a name should not imply a business has exclusive or officially sanctioned authority to offer their product in a specific locality unless such authority exists and can be demonstrated

Consumers should not be misled

David Fisher, Director of Consumer Credit at the OFT said: ‘Businesses are free to choose trading names as long as they are not misleading or otherwise undesirable. For example, where they do not make clear the nature of a business or where it pretends to be something it is not. The name of a business can be important to consumers when choosing a supplier and they should not be misled in this regard.’

Guidance for businesses

The OFT have published a guide to help businesses choose an appropriate trading name. You can download the misleading or otherwise undesirable names guide from the OFT website (PDF, 246K).

Source: nibusinessinfo.co.uk