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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
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!

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.

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.

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.

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].

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.

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.