Minister, don’t waste money vandalising consumer protection

@David Colquhoun: I have great trouble finding appropriate people to take action about breaches of the Cancer Act (e.g. CANCERactive). However, some individuals within TS are very good and responsive to email.

I certainly agree with that – this really has to be stopped in its tracks before it gains any traction. Thanks Which? for reporting it.

I think we all realise that TS have been seriously underfunded and under-resourced for some time and it looks like these new proposals aren’t exactly going to address that.

In a discussion with my local TS Officer, I was told their priorities were counterfeit goods at the local market and car clocking. These are necessary functions, of course, and these cause monetary detriment to consumers, but there seems to be little impetus to tackle healthcare claims that certainly cause monetary detriment – sometimes into thousands or tens of thousands of pounds – but, more importantly, can cause harm to the person by either giving them dangerous treatments or advice that delays or dissuades consumers from seeking possibly urgently needed medical advice from a properly qualified doctor. These are serious and widespread issues – for example, just have a look at the claims being made in the windows of your local high street herbal shop.

Can you tell us whether there is pressure on TS Officers to meet a target of ‘cost to the consumer’ saved? A monthly target, perhaps? If so, it’s easy to see why there is concentration on (high value) counterfeit goods and clocked cars. What would be required to persuade TS to take health complaints more seriously?

I would like to see money raised from fines ploughed back into funding the operation of Trading Standards. As David has pointed out above, the development of Internet trading has put additional pressure on the service.

If underfunding means that certain problems are prioritised then this encourages the rogues to make their money in other ways.

“…anything that involves a high level of dishonesty or monetary loss to the consumer is a priority.”

But when a big business advertises customers a price and sells at a higher price, the enforcement body/regulator only look at the individual.
They are not recognising that the business concerned has made a handsome extra chunk of money out of all sales of that product.

One example I can quote, might only be a loss for each customer of 88p, but spread across the hundreds of sales the business made whilst advertising a lower price, runs into thousands of pounds.
The complaint is not addressed as only a handful of individual customers reported it.
Unless complaints number in the thousands, the consumer is ignored, the business keeps it’s “compliant” status and the extra thousands of pounds it made while selling at a higher price than advertised..
Not only are they more likely to do it again – no inspections into compliant businesses by regulators and enforcement bodies – no official body is watching out for it.

How many rogue doorstep traders have I, or friends/family experiences of being stung?
Not a one.
How many times have I, or family/friends experienced unenforceable charges, inaccurate bills, misleading prices, etc?
Too many times to keep count, every other week at least.

Both are damaging, with rogue traders, report them to the police, results in arrests and prosecution?
With big business flouting regulation, fine them and give the money to trading standards or other consumer protection bodies.
Free court time set aside for consumer protection would also help, taxpayers already pay for it, pointless paying a regulator/enforcement body for it as well.

The theory giving fines to consumer bodies, that big businesses would get their houses in order and the funding from fines would dry up, I would wager decent money that the opposite would happen.
Drop “advisory” regulation/enforcement altogether, it does not work.
Re instate “enforcement” regulation/enforcement and return to a level playing field for all businesses.

As it stands, regulation is almost non existant, these proposals would take what little powers are being used further from consumer protection, which is what we need to stop “Rip off Britain”

Trading Standards

Thanks for that. I understand about the way loss is quantified – this is important, but I wish we could change the emphasis a bit on to misleading healthcare claims!

Some of the effects on consumers of misleading healthcare claims can be relatively minor: £50 to £100 for a ‘consultation’ and some sugar pills from a homeopath making claims to cure/treat/help/alleviate all sorts of minor medical conditions that they are neither qualified to treat or hold robust evidence that they can be treated with their products.

But it frequently does not stop there: many people are misled into signing up for a ‘package of care’ that can last months, years or a lifetime, costing thousands or tens of thousands of pounds. Then there are those who are claiming to cure/treat/help/alleviate serious medical conditions – that’s where simple monetary detriment becomes something completely different and far more dangerous.

This website is typical of the claims made by homeopaths. Since there is no good evidence that homeopathy has any effect on any medical condition, this is completely misleading and possibly a breach of the CPUTR 2008. (It certainly does not comply with the ASA’s Guidance for Advertisers of Homeopathic Services!)

I really don’t think that such a case should be complex or long winded, but I’d appreciate your views on why you think this would be the case.

Thanks.

Alan

Why spend all resources on the instance of a rogue trader and not spend resources on both issues?
I could ask why you value spending each £1 of funding on an action that will help 3 people, instead of spending that £1 of funding on helping 4000 people?
Which is a more effective use of resources?

How is a supermarket misleading on price, advertising on TV, but their superstore around the corner from me is charging a higher price, not a LOCAL issue?
If they sold 40 of that product at our “local” store via online orders and over the counter, that’s 40 customers misled is it not?

With the old ladies who have been ripped off for £10,000+ why not take details and hand the case to the police to prosecute?
Why does it take up so much of your resources?

I can’t help but be reminded of all those banks that have sold policies to the elderly, misleading them, which could have been stopped early in the process had regulation/enforcement not been “advisory” and those big businesses were subject to unannounced inspections, which they weren’t as they hold a “compliant” status with regulators.

My experience, with not only trading standards, but also the charity commission, ofgem, energy regulator, FOS, FSA, etc, is that a couple of complaints will result in a note going on record for a period of time and no action is taken.
They can’t take action becuase they all operate under the Hampton principles, which must consider the “needs of the business” any proposed action would have.

Look at the which? case with Orange customers being charged higher prices mid contract, no action taken by OFCOM, despite large numbers of complaints (OFCOM wouldn’t even reveal how many they received).
Customers left out of pocket wrongly, mislead at the point of sale, not a one have I spoken with or emailed that was told the price could be increased during the term of their mobile contract.
No action taken has lead to first T-mobile doing something similar and a couple of recent reports via twitter, that now vodafone are starting to do the same.

I support trading standards, I really do, I understand limits of funding and the need to target action, and the pressure coming from policies like those proposed by Norman Lamb, councils, etc, but it has to be said, headline grabbing “results” and “advisory” regulation/enforcement is failing the people of Britain.
In case it hasn’t been noticed, “head office driven” regulation is stinging each and every household in the country, while each household pays out in cuts and higher taxes for previous failings that the powers that be continue to apply to all sectors of business.

The fact that trading standards and other regulators/enforcement bodies are adverse to campaigning or highlighting to the Norman Lambs of this world, that change is needed, instead of just singing along with the latest hymn sheet, to protect their own funding, shows how out of touch they all are.

If you get a moment of free time, log on to twitter and search #ripoffbritain or hash tag and the name of any big business (the energy companies have some very choice posts!) and see the problems that people are facing on a daily basis, you’ll be as shocked as a George Osbourne was at tax avoidance!

Homeopathy is no more effective than a placebo. That is very well established. How much more evidence does Trading Standards need to take action against people who make money out of worthless ‘treatment’? I had respect for Trading Standards but this is disappearing fast.

Trading Standards said:

“With regards to Homeopathy – the website you linked to is claiming that he can ‘help’ or ‘treat’ with certain conditions – not that he can ‘cure’. There is a big difference.”

In terms of the CPUTR, possibly. In terms of misleading the public, I don’t think so. The ASA take a very pragmatic – and in my opinion correct – view that a claim about a condition, whether it says treat/help/alleviate/cure or even ‘we see people with…’ or similar (weasel) words will be understood by the general public that the treatment on offer will have some material effect on the person with that condition. In terms of protecting the public from traders who are making medical claims that they have no robust evidence for, this has to be the sensible approach. It seems reasonable to assume that the reason a trader mentions a medical condition is that he does so with the intention that a consumer will take it to mean that his treatment will beneficially affect that condition. The fact that he doesn’t say ‘cure’ is irrelevant if we are interested in preventing the public from being misled – it is as misleading to say ‘help with’ or ‘treat’ as it is ‘cure’ if he has no evidence for any of these.

That is certainly the problem with the CPUTR (and the identical wording in the Directive). It specifically says cure and it seems that TS are not willing to test that meaning in the courts to see if a broader meaning might be well within the spirit of the Directive and right for the protection of the consumer from unfair commercial practices.

“The reason it would be long winded is because we would have to prove to a criminal standard that what he is saying is not accurate AND would mislead consumers. What would happen is that he would pull out some study or find 200 people that all say Homeopathy did ‘help’ them and then you have some form of very long winded legal battle deciding whether anyone has been misled.”

I’m not sure I agree with you on where the burden of proof lies. Regulation 27 (which amends the Enterprise Act by adding 218A) clearly requires the person making the claim to substantiate that claim – it is not up to TS to prove a claim is not accurate or misleading. Is this the correct interpretation or am I missing something?

However, I cannot see that, say, a homeopathy making a claim to treat a medical condition can be anything other than misleading since there is no good clinical evidence that it can treat any condition.

But of course the above only applies to a consideration under 3.-(4)(d). Even if the restrictive meaning of ‘cure’ is enforced, there are several other routes that could be taken and I have not seen any reasoning why they are not pursued. On particular, Regulation 3.-(3)(a) states:

(3) A commercial practice is unfair if—
(a) it contravenes the requirements of professional diligence; and
(b) it materially distorts or is likely to materially distort the economic behaviour of the average consumer with regard to the product.

It is certainly very easy to construct an argument that says a homeopath should not be claiming to treat, say, allergies because his professional diligence should dictate that he should look at the good evidence for that treatment before making such a claim. Because there is no evidence (and surely we have to accept that an anecdote or poorly-conducted study would not be considered adequate – otherwise there would be absolutely no hurdle to overcome), any such claim can only be considered misleading and therefore distorts the economic behaviour of a cinsumer – ie a consumer pays for the treatment when there is no evidence that it is going to do what is being claimed for it.

Then there is Regulation 3.-(4)(a):

(4) A commercial practice is unfair if—
(a) it is a misleading action under the provisions of regulation 5

It would take too long to go through this in detail, but I’m sure you’ll see what I’m getting at: Regulation 5.-(2)(a) and subsequently (4)(b) (the main characteristics of the product (as defined in paragraph 5);) and on to (5) (b) and (c):

(b) benefits of the product;
(c) risks of the product;

Then there’s the similar Regulation 6. Misleading omissions to which a similar argument can be applied – that, by omitting to state that there is no robust clinical evidence that the treatment can do what is being claimed for it, the consumer is at an unfair advantage.

The above are offences under Regulations 9 and 10 respectively.

I’m sure it’ll be obvious that I am not an expert in these things, but I have not yet heard any cogent reasons why actions could not be taken under these regulations, even if any action under 3.-(4)(d) is shied away from and I’d be interested to hear your views on this – and Which?’s lawyers!

“Don’t forget the point of the court is not to decide whether homeopathy works but whether the consumer has been misled (if prosecuting under CPRs).”

Agreed – and I wouldn’t expect or even want a court to rule on such a scientific matter (something that came out very clearly in the British Chiropractic Association v Dr Simon Singh libel debacle), even though in the case of most alternative therapies there is scientific debate to be had – they just don’t work.

“Any such case would almost be guaranteed to drag on for ages and cost a lot of money – and IMO would require the backing of a national regulator and would be something of a ‘test case’ to send a message.”

I’m not sure what sort of national regulator you’re thinking about, but this certainly needs a test case – there are vast swathes of thoroughly misleading information out there about alternative therapies and the consumers are suffering because they are being prevented from making informed choices.

“If that website breaches the ASA code then I suggest you report it to the ASA. The ASA do not do criminal work and can therefore ban adverts if they do not apply with their code”

I know and I have had a lot of success with complaints to the ASA and we have significantly curbed the claims of many therapists. But much more needs to be done and the ASA, although great at what they do and the way they do it, have limited powers.

I apologise for the length of this, but thanks for your replies so far and I hope you are able to help me understand the CPUTR better!

If the police don’t want to know, then make representations to the powers that be for them to take up more cases?
Do trading standards actions against rogue traders not end up with criminal cases in court?
Do these cases result in fines/custodial sentences for the traders? Or are the ripped off reimbursed with the money they were misled into parting with?

“With respect, a supermarket doing a dodgy advert is a world away from people having their lives ruined by rogue traders”
Only in scale, the principle is the same.
I ask again, spending each £1 of resource on helping 3 people or spending the £1 on helping 4000?
Which is a better use of resources? (Personally, I’d like to see 50p spent on both)
Why is there such a difference between a rogue trader taking thousands from a pensioner and a corporate business taking thousands from a pensioner?

http://www.ft.com/cms/s/0/3dfe4144-1f2d-11e1-ab49-00144feabdc0.html#axzz1rrcUWPE9 – mis selling care bonds record fine – yet HSBC remain “compliant” with regulator the FSA.
If this was my little company, I’d lose my consumer credit license, company closed down, banned from having a company again and be in prison.
Interesting piece is at the bottom, where the DG of Saga said, “One has to wonder how many such scandals have to occur before the regulator acts to prevent them happening in the first place rather than trying to sweep up the after-effects,”

I defy trading standards or any regulator/enforcement body to name a single big/corporate business that has lost it’s “compliant” status in lets say, the last 5 years.

Consumers are being misled, fobbed off, stung, call it what you will, at every level, in every area of their lives.
We are left to defend ourselves on unenforceable charges, admin fees, cancellation fees, card fees, repair fees for company’s own equipment failings (BT phone lines, electricity/gas meters, etc).
We are promised goods and services at prices and quality that simply does not stack up – we live in the world of “up to” and “save” which 99% of the time turns out to be false.
When was the last time the price stated of a flight was the actual amount that was to be paid once booked?
How many people here can calculate their own energy bills?

There are people in the UK who have to decide between heating their home and eating food.
We are facing cut after cut after cut in services, benefits, less retirement, etc, because of “advisory” regulation being applied across the board and failing in a way not witnessed in the UK since the great depression of the 1930s.
We are paying for continued failed regulation, to the tune of 100s of millions every year, through taxation to governments, county and local councils.
Norman Lamb’s proposals will give even more power to the “needs of the business” over the needs of the consumer.

Look around, the damage being done to the people of this country, it is shocking. We are working flat out to stand still. Some are going under.
Hampton principles of “advisory” regulation/enforcement have failed. Of this there can be no doubt.

Trading Standards

Thanks for your reply and correcting me!

“If we want to prosecute we have to prove the person is misleading the consumer ‘beyond all reasonable doubt’.”

From my perspective, it is a fact beyond all reasonable doubt that homeopathy is no better than placebo, therefore any claims about it are, de facto, misleading. There really is no scientific debate about this – it was settled a long time ago.

“Yes you have misunderstood the CPUTR to some extent. The CPUTR amends the Enterprise Act so the power to ask for information is in the Enterprise Act not the CPUTR. The Enterprise Act is different legislation and it has no criminal offences.”

Ah! I think I see. Although the CPUTR amend the Enterprise Act, those sections have no bearing on the CPUTR?

“Something can be misleading but not a breach of the CPUTR. If that is the case then TS can do nothing as we can only enforce the law that is there.”

So, what is the threshold for deciding something that is misleading is potentially also a breach of the regulations?

“I am not saying a prosecution wouldn’t be taken, only that there are other things considered more important and easier to do. I would hazard a guess that the number of people moaning about dodgy secondhand cars beats medical claims by a factor of 50.”

I think this lies at the root of the problem. I certainly do not deny that TS need to deal effectively with complaints against dodgy car dealers, etc, but I cannot see that claims about being able to treat serious medical conditions that are misleading, fraudulent, harmful and sometimes downright dangerous, expensive and wide-spread should not have a high priority as well. I appreciate that TS – like all LA departments – are being squeezed from an already tight budget, but this must be given a higher priority.

“I know a faith healer was prosecuted within the last year and accoridng to Twitter it was covered on TV yesterday.”

If that’s the one I saw, that was for sexual assault and rightly so. However, there are vast numbers of people being misled/conned/scammed by alternative therapists. The particularly serious ones get reported and there is a useful list of some of these from around the world on the What’s the Harm? website. The claims made by some alternative therapists do sometimes lead to death. You may have heard about the tragic case of Penelope Dingle who died after relying on the (misleading) advice of a homeopath, rather than seeking proper medical help for her rectal cancer – treatment that would have given her a good prognosis. The Coroner’s report makes harrowing reading – and damns the homeopath. The homeopath is now being sued by Dingle’s sister.

That was in Australia; it could easily have been the UK. I want to do what I can to prevent such tragedies.

Alan

I don’t think you misunderstood the CPUTR at all. Part 8 of the Enterprise Act provides a civil enforcement mechanism for a wide a range of trading standards laws including the CPUTR. In relation to the CPUTR, if you are using the civil enforcement mechanism, there is a reversed burden of proof for misleading claims (s.218A).

The civil mechanism is appropriate for misleading health claims. Its objective is to get businesses to stop their illegal practices, rather than to punish them.

Misleading health claims fall squarely under the CPUTR. Although the ‘banned’ practice (where you don’t have to apply the transactional decision/average consumer test) does refer to ‘cure’, weaker claims (‘treat’, ‘help’) are within the scope of Regulation 5 on misleading practices. Even in the absence of any claim at all, Regulation 6 (misleading omissions) could bite if the supplier fails to disclose material information (such as ‘this treatment is known to be ineffective’). Anyone who markets an ineffective treatment is probably also breaching Regulation 3 (unfair practice, professional diligence).

Although the average consumer is taken to be reasonably well-informed, observant and circumspect, this doesn’t stop misleading health claims being misleading. Firstly, such claims are often targeted at groups who are more receptive to them (e.g. because of where they are published). Secondly, given widespread uncritical or falsely ‘balanced’ coverage of such issues in a lot of the media, average consumers may well be more receptive to such claims than they ought to be. Thirdly, the EC, in their guidance on how to enforce the Directive, encourages enforcers to apply the average consumer test in the context of the insights of behavioural economics, for example by reference to the cognitive biases which lead people to make economically ‘incorrect’ decisions. The average consumer may be reasonably well-informed, observant and circumspect, but this does not stop their human nature — which is to be irrational, inconsistent and malleable.

Investigations and proceedings under the Enterprise Act need not be long-winded. And if the business fails to provide robust substantiation, their claim is deemed to be misleading.

TSO – I very much appreciate your contribution to this discussion. I found it very informative on the rationale at work in dealing with falsehoods, especially your fourth paragraph.

We certainly saw some misuse of science in the first Conversation on Nutritional Therapists. I am very keen that the Advertising Standards Authority and Trading Standards tackle some of the nonsense that is being inflicted on people.

Sophie – that would not help. The CPUTRs were brought in by the Labour government. My dealings with politicians of all colours over several years fail to differentiate between the parties in terms of their understanding of science and health care. In a wider context, party politics are always dominated by dogma and not by evidence. We just have to keep shouting about evidence louder and louder.

The Act itself isn’t unwieldy although it can seem like that when it gets buried under layers of process. Some cases involve a lot of investigation and evidence-gathering, but it’s much more simple where you just have a blatantly misleading advert and the trader refuses to change it.

The Act has a two-part process. Firstly, consultation. Ring the trader and ask them to stop, follow up with written advice and/or a face-to-face meeting.

Secondly, if this doesn’t work, apply for a Court order. Alternatively accept an undertaking if the trader offers an acceptable one at this stage.

Orders only require the trader to obey the law. You can’t get an order restricting legitimate activity at all. But it might be oppressive to try to get an order if the trader has stopped trading and is unlikely to carry on. Only time and hindsight will tell whether the Court made the right decision in your case.