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Minister, don’t waste money vandalising consumer protection

The consumer minister, Norman Lamb, has proposed a chaotic reorganisation of the ‘consumer landscape’. This will waste money and could leave consumers vulnerable to rip-offs and scams.

We’re living in pretty tough times, and anyone who regularly struggles to pay for bills and essentials will understand how important it is that we’re all protected from the dodgy deals and misleading sales tactics that can hit our wallets pretty hard.

That’s why I want to highlight the proposed changes to the consumer landscape – a shockingly ill-conceived plan that could end up vandalising a system of consumer protection that is admired worldwide at a time when people need it most.

What does the reorganisation involve?

Well, this chaotic and costly reorganisation will see the Office of Fair Trading (OFT), which recently had success taking on the budget airlines over ‘rip-off’ card surcharges, downgraded and merged with the Competition Commission.

The government claims that the new quango, the National Trading Standards Board, is to receive ’increased funding of £10.5m’ for its work. However, this money is simply redirected current OFT enforcement money. The National Audit Office report found that enforcement spending is set to fall from the current £247m, to around £140m by 2014.

We shouldn’t burden trading standards officers

The suggestions put forward by the consumer minister mean that local trading standards officers, more used to tackling street markets and rogue plumbers, will be required to do the majority of consumer law enforcement work.

This puts considerable extra strain on local authority Trading Standards services at a time when councils are slashing their budgets and trading standards officers are being made redundant across the country.

Not only that, but it expects far too much of the officers themselves – they will be expected to take on powerful national and international companies. But this is nonsense – giving OFT responsibilities to local Trading Standards officers and the Citizens Advice is like asking GPs to carry out heart surgery.

Consumer Focus on the scrapheap

On top of plans to pass on the OFT’s responsibilities to Trading Standards, the minister also recommends getting rid of the government funded watchdog, Consumer Focus.

Consumer Focus challenges businesses, the government and regulators like Ofgem on key consumer issues. However, Norman Lamb would like to hand its responsibilities over to Citizens Advice – which is already struggling to cope with the growing numbers of people seeking help on welfare benefits, housing and immigration problems.

So what can we do about this? I want the minister to understand that UK consumers deserve better than this. Failing to enforce consumer law already costs the British public over £6bn a year – rather than focusing on costly reorganisations, we want to see real action to show the minister is taking his new role of protecting the nation’s consumers seriously.

Comments
Profile photo of frugal ways
Member

“a shockingly ill-conceived plan that could end up vandalising a system of consumer protection that is admired worldwide at a time when people most need protection most.”

admired worldwide?
try telling that to the FSA and their complete failure to regulate RBS which led to a £45 Billion taxpayer bailout, which is a factor in the current round of cuts all people are facing.

I agree though, this “plan” is not cost effective, will destroy what little regulation/enforcement we have left and everybody will suffer.

Regulation changed from “enforcement” to “advisory” after the Hampton report in 2005 (the same Mr Hampton who is now in charge of RBS – bonus anyone?) – which consulted “stakeholders” – which were big business, trade bodies, etc.
It was adopted in full and extended across all areas.
Focusing on rogue traders while making it almost impossible for big business to be punished for anything, in effect “head office regulation/enforcement” has failed completely.
The save money argument doesn’t stack up, as the costs of the banking fiasco are hitting us all hard in the pocket.
Save a few million per year with these changes or recognise that the Hamton principles of regulation failed completely in the banking sector and are the major cause of “rip off Britain” we see today.

Don’t take my word for it, look at the office of national statistics figures for energy prices – plodding along within mid range/manageable figures for years, until early 2005 when the hampton report came out and was announced it was being adopted across the board.
Energy prices have shot up ever since. Of course market prices have also played a part, but failing regulation putting “the needs of the business” first has led to deliberately unclear bills, doorstep mis-selling, and an energy industry dominated by the big 6, with little or no inspection.
Despite all of this, all the big 6 have kept their “compliant” status with regulator OFGEM and continue to win government contracts (don’t you EDF!)

I am the first to criticise trading standards, but they have to be given a chance. They cannot be expected to protect us and do their jobs with one hand tied behind their back. Give them decent funding instead of “saving money” all the time and let them have real powers back.

The needs of the business shouldn’t come before the needs of customers as it does now.

If the Hampton principles of “advisory” regulation failed in the biggest sector – banking – why do successive governments continue to think it will work across every other sector?
I welcome Which? stand on this and hope that others will join in and see it for what it is, regulation designed by business for the benefit of business!

Norman Lamb take note – stop pandering to businesses and start doing your job, protecting customers!

Profile photo of Guy Chapman
Member

So the Government wants to shunt the responsibility onto locally devolved officials, slash funding, and then presumably blame the local officials for the inevitable failure of the service. I’ll hazard a guess that the solution to this problem will be private sector involvement. Not that I’m basing this on the identical bait-and-switch approach embodied in the NHS bill, of course….

Member
Les Rose says:
11 April 2012

Admired worldwide? Largely ineffective when it comes to health scams:

http://mlj.rsmjournals.com/content/80/1/13.abstract

A failure to implement Directive 2005/29/EC, placing the UK government in breach of EU law.

Profile photo of david colquhoun
Member

Something certainly needs to be done about Trading Standards. The present local system is entirely inappropriate for the present day, when a large proportion of business is done on the web. Furthermore, communication with the person who is dealing with your complaint is well nigh impossible.

A recent paper showed that TS are failing totally in their statutory duty to enforce the Consumer Protection Regulations (2008) ( http://www.dcscience.net/Rose-medico-legal-2012.pdf ). Many offences under these regulations involve false health claims. The present local organisation means that individual offices rarely have the expertise to evaluate this sort of claim (unlike the ASA which does it rather well, but has no power to prosecute).

I’m not sure exactly what’s being proposed, but something certainly needs to be done.

Profile photo of Guy Chapman
Member

@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.

Profile photo of John Ward
Member

I have a lot of respect for the trading standards services across the country – they have always served me well when I have raised a concern with them. I think they are without fail diligent, conscientious and impartial. However, it worries me that the government even think that trading standards services could take on a significant part of the role of the OFT – not because I think they are not competent to do it but because it would lead them to taking their eye off the ball over the relatively lesser problems that give so much concern to many people and where their resources are already stretched to breaking point – like rogue traders, cold-calling, sale of fireworks, sales to juveniles, local fair trading, market and car boot sale supervision, weights & measures, licensing, pricing in licensed premises [they’ve virtually abdicated from this already], and day-to-day consumer protection generally. The major attribute of the trading standards services is that generally they are not susceptible to political influence in terms of who they take on – they tend to have a planned programme of inspections and enforcement plus a number of perpetual responsibilities varying in demand that they manage fairly well. The casework taken on by the OFT, and presumably due to be devolved to TS services, tends to be more controversial, sometimes has a political sub-text, and involves lengthy and resource-intensive investigation across wide geographical areas. It will be interesting to know what the Competition Commission is going to take on from the OFT’s present terms of reference [and whether we shall live long enough to see a result].

Profile photo of wavechange
Member

I regard consumer protection as one of the key areas where Which? should be active. Peter’s introduction to this topic is pretty damning of the proposed changes, so what we need to know is what action Which? intends to take and what we can do to help.

Profile photo of John Ward
Member

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

Member
Trading Standards says:
11 April 2012

I work in Trading Standards.

I think it is a bit disparaging to say we cannot handle the job. We regularly prosecute complex fraud cases. But I take your point, that the mentaltiy of a TS dept is different from that of a national regulator like the OFT. It remains to be seen how these new changes will be implemented, it may well be that new departments are created that only deal with national problems but are extensions of existing TS departments.

With regards to the health claims issue, I can almost gurantee that if I looked at the complaints data health claim complaints would be bottom of the pile. We deal with issues that are causing the most complaints, financial loss or health risk. My guess is that it would be very hard to justify a criminal prosecution on the health claim issue when you have far worse examples of consumer detriment to go on.

The bottom line is we need more skilled resources – sadly they are currently being cut.

There is nothing you can do to stop these changes as the Govt has made up its mind.

Member
Alan Henness says:
12 April 2012

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?

Profile photo of wavechange
Member

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.

Member
Trading Standards says:
12 April 2012

We do not have ‘targets’ as such and in my department one of our main priorities is doorstep crime. Think rogue traders who turn up and charge extortionate amounts. But anything that involves a high level of dishonesty or monetary loss to the consumer is a priority.

Monetary detriment is a lot easier to quatify than the issue of health claims. When someone complains about a health claim they just say its misleading but its difficult to quanitfy a loss. Whereas if someone says they have been conned out £10,000by a rogue trader or has bought a clocked car for £8000 its easier to quantify a loss.

Don’t get me wrong – it is frustrating that we cannot tackle a range of problems including health claims but there you go. It also goes without syaing that a health claim case could be extremley complex and long winded.

We work on a complaint led basis – so to get health claims taken more seriously you would need more complaints about said issue.That does not mean a single serious complaint would not lead to action though.

Wavechange – the problem with your suggestion is that we would be accused of prosecuting people just to get big fines. We are already accused of that in relation to Proceed of Crime Act.

Profile photo of frugal ways
Member

“…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”

Member
Alan Henness says:
12 April 2012

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

Profile photo of wavechange
Member

Wavechange – the problem with your suggestion is that we would be accused of prosecuting people just to get big fines. We are already accused of that in relation to Proceed of Crime Act.

If that’s the case you need more government funding and the fines go into government funds, if that helps. We need more action to deal with rogues and it concerns me that you currently do not have the resources to deal with some problems.

Member
Trading Standards says:
12 April 2012

Yes but if you have 10 old biddies that have all been done for £10,000+ are you going to help them or spend all your resources chasing companies for things that probably won’t result in much of a penalty?

Our Council has many priorities and we have to work to them – one of them is making life better for and protecting LOCAL residents.

The vast majority of TS ‘results’ come from things other than prosecutions.

Also you don’t need thousands of complaints for action – we often take prosecutions on a couple of compalints dependent on their nature.

Profile photo of frugal ways
Member

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!

Member
Trading Standards says:
12 April 2012

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.

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.

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). The CPRs are there to protect the well informed, observant and circumspect and not the ignorant, the careless or the over-hasty consumer. You could argue a well informed consumer should do their own independent research before committing to a treatment that is questionable.

I am not saying it can’t be done but I am saying not many departments will have the appetite to take on such cases when you take into account all the other work they have on.

I know you think such a case would be ‘open and shut’ but I have been involved in many cases which should have been ‘open and shut’ such as car clocking and counterfeiting and some of them have taken 2 years to resolve. I could easily see a case like this dragging on for 2 years plus with significant costs.

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.

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 – so it is much easier to deal with health claim issues that way as the burden of proof on the ASA is far less than TS.

Profile photo of wavechange
Member

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.

Member
Alan Henness says:
12 April 2012

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!

Member
Trading Standards says:
12 April 2012

Dealing with rogue traders is often complex as they are smart and often move around different counties. The Police often don’t want to know and TS are the ones that have expertise in this area.

With respect, a supermarket doing a dodgy advert is a world away from people having their lives ruined by rogue traders.

Anyway its not like we don’t do anything about big coporations – but because corporations are always moving so fast and so busy it is difficult to keep on top of them and new problems are always emerging.

It is misguided to think that just because a company is not being prosecuted that it is not subject to a regulators eye. The vast majority of work a regualtor does will be behind the scenes and not public – certainly in TS cases anyway.

Its also a pipe dream to think that we would ever have enough resources to have total compliance. You would need 10x as many regulatory staff as you have now.

We don’t prosecute on every breach – that is not just a Hampton thing but a resource thing.

The Justice system doesnt really help, any court action is slow and takes up resources.

Profile photo of frugal ways
Member

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.

Member
Trading Standards says:
13 April 2012

Alan

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

We don’t have the power under criminal law to make them say or do anything – it is up to us to prove everything we say – don’t forget everyone has the right not to answer questions.

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.

As with regards to a national regulator – someone like the OFT who has a big budget and a lot of lawyers.I would imagine any case taken against a Homepath would involve their professional association and very quickly turn into a big legal battle – so there is a risk there for a local authority to become involved in an expensive legal battle. Bear in mind local authorities are currently facing cuts.

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.

Obviously I only speak from my own experience. There may well be all sorts of stuff going on out there in other depts that I am not privvy to.

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

Member
Alan Henness says:
13 April 2012

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.

Member
TSO says:
23 April 2012

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.

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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.

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Thank you for your patience with us, Trading Standards.

It’s disappointing to learn that dodgy cars are considered more important than false medical claims. Those who are in a poor state of health or are vulnerable are not really important, after all. 🙂

Perhaps the only hope for us is better education and awareness of rogues that are effectively condoned, either through lack of resources or possibly failure to recognise the need to deal with the problem.

At least we can rely on Which? to help raise awareness of consumer protection issues and our rights, even if it can be very difficult and time consuming to take action against rogues.

Member
Les Rose says:
13 April 2012

Trading Standards – I have 2 simple points to make.

1. You worry too much about the burden of proof regarding health claims. Firstly, you think you have to prove a negative, which is ludicrous from a scientific standpoint. Alan has made it crystal clear that false claims to improve health are extraordinary claims. They are not like clocking cars or watering beer, they are very clearly false claims and science has shown that beyond reasonable doubt. You thus have the opportunity to reverse the burden of proof, by asking the trader for evidence.

2. Trading Standards, as the appointed enforcement agency for the CPUTRs, has the statutory obligation to provide enforcement. The EU Directive from which the CPUTRs are derived does not provide for selective enforcement. I suggest you point this out to your most senior people.

For heaven’s sake, is it not possible for Trading Standards to phone a trader and say “Look, your claim is illegal so please stop making it now”? Do you really want us to deluge you with 1000s of complaints, to force you to change your priorities?

Member
Les Rose says:
13 April 2012

Another thought. TS says that everyone has the right not to answer questions. I do not think this gives them the right to make a false claim and then refuse to back it up. The intention of the EU Directive is clear, to prevent traders from misleading consumers. That intention will trump any member state transposition that appears to be vague. If a trader refuses to answer a question about evidence, that automatically places them in breach of the various CPUTR clauses that Alan has itemised. In other words, they have the right not to answer, but they do not have the right to mislead.

It really is utterly ridiculous to have a new piece of legislation that requires this amount of discussion about what it really means. Why on earth can’t it be clear? The intention is obvious to anyone with half a brain, it’s to stop consumers being misled into wrong decisions. There should be no need for this terror of testing what it means in the courts. It’s obvious to me that the word `cure’ was chosen for simplicity, and would be readily translated into the many languages in the EU. The fact is that even licensed prescription medicines never claim to `cure’ anything, because there are no certainties in medicine. The wording on their labels is determined by what was discovered in clinical trials. Traders who have not done the trials, or have no other evidence, should not be allowed to make similar claims to those made for licensed medicines.

Yes this is very very important. The ironic tragedy of alternative medicine is that many of its users would quite literally rather die than complain that it didn’t work. A lot of them do die. So you will get virtually no complaints from actual users (and certainly not when they are dead). It is left to those of us who care about truth in the health field to stand up for real science.

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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.

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@ Trading Standards

It is good of you to take part in this discussion.

I wonder whether you have read the legal opinion that was posted on my blog in 2009, at http://www.dcscience.net/?p=790

It is very far from clear that, under the 2008 regulations that the onus is on TS to “prove” that the claims are false. To demand that would be absurd from a scientific point of view.

Neither is it the case that the word “cure” has to appear in the claims for them to be illegal. Para 5.2(a) says ” or if it or its overall presentation in any way deceives or is likely to deceive the average consumer in relation to any of the matters in that paragraph, even if the information is factually correct”.

The excuse that you take action only if there is a substantial number of complaints looks a but thin in the light of the study by Rose et al., referred to above, In that study, 12 complaints were lodged against each of three cases of very obviously false medical claims. next to nothing happened, and one TS officer explicitly declined to apply the CPUTRs, despite it being their statutory duty to do so.

It seems to me to be the case that the huge health fraud industry cannot be stemmed by the local office arrangement. A large proportion of the fraud takes place on the internet. Clearly TS needs to grasp this, as the ASA has done. Some sort of central unit is needed, with staff who are qualified to assess claims. It seems clear that the TS is stuck in a pre-internet age and that needs to change.

Successful prosecutions have taken place in Australia and new Zealand. Why not here?

Member
Sophie Gilbert says:
13 April 2012

Maybe none of us should vote this government in again next time?

Member
Les Rose says:
13 April 2012

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.

Member
Trading Standards says:
13 April 2012

Hmm, I will try to address all the points made today.

The CPUTR were effectively brought in by the EU. So the UK Government had no control over it. The UK law pretty much says what the EU law says.

Any criminal prosecution means the prosecution have to prove their case and prove it beyond all reasonable doubt. What needs to be proved depends on each situation. We have no power under criminal law to ‘reverse the burden of proof’ so I don’t know where you are getting this from. We can ask questions and they can refuse to co-operate – normally though we will only take a case on when we already have the information we need (for example, someone clocked a car). We wouldn’t start an investigation on the basis that it would proceed solely on the basis that someone cannot answer some questions – that would probably be illegal.

The CPUTR amends the EA. Those amendments only have relevance to the EA, not the CPUTR. So to clarify, under criminal law we cannot ask someone to verify something and if they fail to do so they are in the wrong. It is up to us to show that they are wrong. They can make misleading claims all day long – it is up to us to show they are misleading AND breaching the law.

There are a number of ‘thresholds’ within the CPUTR. There is the notion of an average consumer, who is reasonably well informed, reasonably observant and circumspect. Any misleading action must have an effect on the transactional decision – which in itself is a huge subject. So unless something affects the average consumer’s transactional decision it is not an offence. That is slightly different fro something misleading automatically being in breach of the law.

TS have a ‘duty’ to enforce the CPUTR but that does not in any way mean we HAVE to enforce every breach. There are probably hundreds of thousands of offences committed every year under the CPUTR so that would be nonsense as we would need thousands more staff. It is up to each TS to decide how it will allocate its resources and what kinds of prosecutions they will pursue – that will depend on a huge range of factors that I cannot go into on here.

You won’t get very far complaining to the EU or the Government that we are not enforcing the CPUTR. The Government are quite clear that they are not bothered – otherwise they wouldn’t be cutting our numbers and reducing our powers!

Les I think you are being somewhat optimistic if you think someone like a homeopath would stop their entire business on our say so, or even a business to stop selling a single product line. I argue the toss with businesses all day long that refuse to co-operate with the law.

I would agree with the article linked to that this kind of stuff should be regulated by a medical regulator, not a general enforcer like TS. The subject matter in health claims is often complex and I have enough complex subjects to deal with without having to become an expert on each type of alternative medicine.

On the subject of the study, I spoke to a colleague who specialises in food law. I believe the products in said study were all foods (whether they were advertised as such or not – the definition of food says if it goes in via your mouth to be ingested, its food, subject to some exceptions, like medicine). Food law has its own very complex rules around health claims which I will not claim to understand. EVENTUALLY the protections around food will be much stronger for misleading health claims than they are for general products.

All I would say is come and work in my department – we enforce probably over 100 pieces of law, all of them important to someone or another. We have all sorts of constraints on what we can and cannot do, financially, politically and legally.

Member
Trading Standards says:
13 April 2012

Just to add – food is subject to both food law and the CPUTR. In theory a prosecution could be taken under either sets of laws if food was sold in a misleading way.

BUT

Food law is very very strong in comparison to many other sectors. Cases have in the past been thrown out when the wrong legislation is used. That is, a general law (liek the CPUTR) was used when specific legislation for a product (like food) already exists.

So if existing food law has something to say on health claims which may allow a claim then you won’t get very far with a CPUTR prosecution – under certain circumstances.

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Trading Standards like most departments have too little numbers of staff to enforce, seems to be just paper exercise, we have these so called departments but no teeth like FSA etc.

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Getting back for a moment to the subject of this topic, I think we have seen plenty of evidence from professionals from local authority trading standards/consumer protection services [Trading Standards” and “TSO” are identified as such and there might be others] to realise that the government’s idea of throwing even more burdensome regulatory responsibilities onto them is a shocking proposition that would just be a licence for rogue trading, mountebanking, sharp practice of every kind, and dodgy dealing in everything from quasi/quack medical treatments to over-pricing by retailers. I strongly support Which?’s campaign and endorse wavechange’s call for more info on what action Which? imntends to take and what we can do to help [see 11/04/12].

Member
Trading Standards says:
26 April 2012

My experience of the Enterprise Act is that its unwieldy and a Court is VERY unlikely to authorise a court order to prevent a practice unless you have tons of evidences and can show serious wrongdoing.

I know of a case where a court refused to provide an order just because someone had claimed they had gone out of business and wouldn’t do it again. This was someone we could show had breached the CPUTR multiple times. The Court said that it would have been oppressive as the person had stopped trading.

Of course, there is now nothing to stop them starting up again and the farce continuing.

Member
TSO says:
2 May 2012

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.