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Archived Consumer Issues

Last archive 2 January 2005

New guidelines for the credit industry
New 'Injunctions' Directive
New proposals for a full pint of beer
New Consumer Support Networks launched
New rights for home shopping consumers
New rules to control car prices come into force
Law Society rapped by Office of Fair Trading
New Control of Misleading Advertisements Regs
New Competition Act in force
New Price Marking Order 1999 in force.
New consultation on Injunctions Directive
New Financial Services Ombudsman
Contract awarded for international price survey
Proposed Comparative Advertisements Regs
Under age sales survey shock!
Mortgage Brokers survey shock!
New Unfair Terms in Consumer Contracts Regulations
New Consumer Affairs White Paper
Counterfeiting update
End to unwanted junk faxes?
EC Consumer Complaint Form
Utility regulation review
UK car prices too high
RRPs outlawed
Shoppers getting bad deal says OFT
Premium phone line scam
Top Ten Tips for Christmas
National Consumer Week 1998
New rules for electricity sales
Product fakers are not Robin Hood!
Consumer Protection 'A matter of luck'
Unsafe products slip through the net
Babywalker safety
New EC Price Indications Directive
New Consumer Credit proposals
Enforcement of the Unfair Contract Terms Regulations
Non-Status lending - OFT Guidelines
Putting Consumers in the Driving Seat
Survey of UK Consumer Concerns
Fair air fare??
Laser pointers
New Firework Safety Regulations
End in sight for Junk Mail??..New EC Directive
Mock auctions
EU Consumer Guarantee Directive
Minded to Notices to end?
Soft Drinks in the Spotlight
Cashback purchases
Champagne Charlies!!
Fake Vodka!!!
Got a complaint?
Anyone for a beer?
OFT used car report
Top 10 Christmas cons
Comparative advertising
Fireworks banned
European grant 'cowboys'
Unfair Consumer Contract rules
Credit cards...joint liability
Extended warranties
Pyramid selling


New guidelines for the credit industry

New guidance on standards of behaviour expected of consumer credit licence holders was issued last month by the Office of Fair Trading.

The guidelines make clear what sort of behaviour is likely to lead to action being taken to refuse or remove a licence. They outline the type of conduct which is not consistent with fitness to hold a licence. For example: dishonesty, discrimination, the use of oppressive sales techniques and unreasonably failing to offer redress to consumers.

John Vickers, Director General of Fair Trading, said:
'Ensuring that credit providers are fit to hold their licences is vital for borrowers and a key part of the OFT's work. These guidelines are not designed to be a comprehensive checklist but make clear what we regard as acceptable and unacceptable conduct.
They will assist honest businesses as well as borrowers and will also ensure that speedier action can be taken against behaviour which clearly falls below the standard required.'

Under Section 25(2)(d) of the Consumer Credit Act 1974 the Director General can, when determining whether or not a licensee is fit to hold a licence to carry on the business of providing consumer credit, consider evidence of the licensee engaging in business practices appearing to him to be deceitful or oppressive or otherwise unfair or improper (whether unlawful or not).

Once a licensee has its credit licence revoked it is not able to offer credit facilities. Consumer credit agreements already made are not affected.
The OFT plans to add to these general guidelines later this year with specific guidance for business sectors that attract high levels of complaint, such as debt collection, credit broking, used cars and home improvements.

A copy of the guidance can be downloaded from, hard copy is available from the OFT's Consumer Credit Licensing Bureau on 020 7211 8626.

For more information see:

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New 'Injunctions' Directive

New regulations are expected soon, to give new powers to trading standards officers to implement the European Directive 98/27/EC on Injunctions for the protection of consumers’ interests, known as the ‘Injunction Directive’.

The Regulations will enable trading standards authorities, the Director General of Fair Trading (DGFT) and certain other bodies to apply to the court for ‘Stop Now Orders’ to stop traders from infringing or threatening to infringe specified legislation, where those infringements or threatened infringements would harm the collective interests of consumers. Courts will also be given the power to order traders to publish corrective statements, to minimise the harm caused to consumers, by past infringements they may have committed.
These new enforcement mechanisms, will work alongside existing sanctions such as criminal prosecutions where these are already provided for in legislation.

The regulations are expected to apply to UK legislation, which implements EC directives on:

  1. misleading advertising
  2. contracts negotiated away from business premises ("doorstep selling")
  3. consumer credit
  4. TV broadcasting activities
  5. package travel, package holidays and package tours
  6. advertising of medicinal products for human use
  7. unfair terms in consumer contracts
  8. timeshare
  9. distance contracts ("distance selling")
  10. sale of consumer goods and associated guarantees
  11. certain legal aspects of information society services.
The Director General of Fair Trading will have lead responsibility for all eleven directives areas and will have to put in place coordination arrangements with other enforcement bodies. Trading standards authorities in Great Britain and the Department of Enterprise, Trade and Finance in Northern Ireland would be empowered to apply for ‘Stop Now Orders’ in all the directive areas except TV broadcasting and sponsorship, and medicines advertising.
Private consumer bodies will be named to act in specific areas and will need to demonstrate that they would take an independent and impartial approach to the use of their powers and act with complete integrity in the interests of consumers.

The Injunctions Directive also establishes reciprocal arrangements within the EU. This should enable enforcement bodies to tackle traders based in one Member State who harm the collective interests of consumers in another State.
Recognised UK enforcement bodies will be able to apply to the courts of other Member States for orders to stop infringements which originate there but which harm UK consumers.
Applications for ‘Stop Now Orders’ will be brought in either the High Court or a county court (the Court of Session or Sheriff Court in Scotland). Failure to comply with a ‘Stop Now’ order would be treated as contempt of court punishable by fines or even imprisonment.

These powers will provide trading standards authorities with an additional tool, to stop rogue traders in their tracks, especially where existing criminal sanctions might be unwieldy or difficult to enforce. They are however a change of focus, away from criminal law enforcement to civil law injunctive powers.
It remains to be seen whether the perceived benefits arise in a local government climate of reduced resources and where there is currently little experience in using civil powers. For the good of consumers it is certainly hoped so!

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New proposals for a full pint of beer

For a number years the law has been uncertain about how much liquid a consumer is entitled to receive when he orders a pint of draught beer or cider. In the White Paper "Modern Markets: Confident Consumers", the Government gave a commitment to clarify the law in order to strengthen consumer protection against short measure.

The Department of Trade and Industry's consultation paper "Fair Measure" on modernising the regulation of goods sold by quantity (July 1999) invited views on whether the pint should be defined as 100% liquid or as not less than 95% liquid. In the light of responses to the public consultation, the Department proposes to make three changes to the legislation:

  1. the measures in which draught beer and cider are required to be sold (one third of a pint, one half of a pint, or multiples of one half of a pint) would be defined as liquid, which would include liquid in the head of froth but not gas in the head;
  2. licensees would be obliged to serve 100% liquid on average, with no deficiency exceeding 5%;
  3. brim measure glasses could be used if they can contain the full liquid measure of the beer or cider being served (including liquid in any head); if not, either lined measure glasses or metered dispensers would have to be used.
The changes would be introduced by secondary legislation under the Weights and Measures Act 1985 and would come into force two years after the legislation is made. Over this period, lined measure glasses, where needed, could be phased in to replace brim measure glasses lost by breakage and disappearance, without unnecessary costs to licensees or their customers, and bar staff could be trained to serve full liquid measures.

The current regulations on beer measures date from the Weights and Measures Act 1963 and are set out in Article 2 of the Weights and Measures (Intoxicating Liquor) Order 1988 (SI 1988/2039), which is made under Section 22 of the Weights and Measures Act 1985.
Retail sales of draught beer and cider may be sold only in quantities of one third of a pint, one half of a pint or multiples of one half of a pint. When selling for consumption on the premises, licensees must use a capacity measure of the quantity in question (either a brim measure glass or a lined measure glass) or a metered dispenser.
The Capacity Serving Measures (Intoxicating Liquor) Regulations 1988 (SI 1988/120) require capacity measures to be tested and stamped for accuracy. Metered dispensers must be stamped for accuracy in accordance with the Measuring Equipment (Intoxicating Liquor) Regulations 1983 (SI 1983/1656).

The 1963 Act was silent as to whether gas in the head of froth is part of the measure, and subsequent case law failed to remedy this uncertainty. Some of the cases merely concluded that what constitutes a pint of beer depends on the particular facts of each case, bearing in mind local expectations and the type of beer. This has not removed the uncertainty as to whether gas forms part of the measure; and, if so, how much gas is permitted to form part of the measure before it becomes excessive and unreasonable.

Hopefully any new regulations will end this uncertaintly, but questions of quality and presentation must not give rise to conflict with the separate questions of quantity and measurement

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New Consumer Support Networks launched

Dr Kim Howells, Minister for Consumers, launched a programme in October to help people get good quality advice on consumer problems.

The proposed Networks will link up local authority and other advice services, such as Trading Standards and Citizen Advice Bureaux, to help them work better together to meet the consumer advice needs of the whole community.
The main aim of the initiative is to improve the advice available to consumers by getting best value from existing resources. However opportunities will exist for local networks to apply for funding support for good projects agreed as part of a Network Development Plan.

Launching the initiative Dr Howells said:
"Well informed and confident consumers help make markets work better to give people a fair deal. I am determined that we should help provide people with the information and advice they need so that they can be confident and more demanding in tackling consumer problems they face.
At the moment access to good quality consumer advice varies enormously across the country. In some areas a consumer may receive considerable help and advice. Elsewhere someone with an identical problem may get little help.
The Consumer Support Network initiative will address this. When people need help with a consumer problem - whether this be simple information or advice, mediation or even support in the courts - they will be able to approach any agency within a Network to access the support they need."

Sheila McKechnie of the Consumers Association also welcomed the new initiative:
"Too often people's problems have remained unsolved because of barriers to access and lack of information. Hopefully, the CSN will address this and will provide an easily accessible joined up advice network, giving consumers high quality, meaningful advice and information."

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New rights for home shopping consumers

Consumers who purchase goods and services by phone, mail order, fax or via the internet will soon be able to do so with greater confidence thanks to new Regulations which come into force on 31 October 2000.
Introducing The Consumer Protection (Distance Selling) Regulations 2000, Helen Liddell said:
"These Regulations are good news for consumers buying goods and services from home. Millions of us now buy from catalogues and over the phone, and with the popularity of buying products on the internet increasing daily, it is important that all consumers are protected and made aware of their rights. The Distance Selling Regulations provide statutory backing for the good business practices which many companies already observe and will help to ensure that this best practice is followed by all.

These regulations help by giving consumers:

  • The right to receive clear information about the goods or services before deciding to purchase;
  • Confirmation of this information in writing or in another appropriate durable medium, eg fax or e-mail;
  • A cooling off period of seven working days in which the consumer can withdraw from the contract; (some exceptions)
  • Unless agreed otherwise with the supplier, the right to receive goods or services within 30 days.
There will be a two-month transitional period to enable businesses to take on board the requirements of the Regulations and the DTI have published a set of faqs at

In terms of the regulations, a distance contract is one where the consumer and supplier do not have face to face contact up to and including the moment when the contract is concluded. The Directive covers the sale of goods or services concluded via e-commerce as well as other means of distance selling including mail order and telephone sales, and fax.
The Directive requires that the consumer be given information in writing or another "durable medium that is available and accessible to him". It is not specific about the means that could be used because of the constant development of means of communication.
Consumers have an unconditional right to withdraw from the contract within 7 working days and have their money refunded. Where suppliers fail to provide the necessary information in writing or in other durable form or to meet the performance requirement the cancellation period is extended by up to 3 months. If the contract is not performed within 30 days, then unless the parties have agreed to a longer period, the consumer is entitled to his money back, unless substitute goods or services are supplied and he accepts them.

These Regulations do not specifically implement Article 10 of the Directive, which relates to Unsolicited Commercial Communications from business to consumers by phone, fax, mail or e-mail. In the case of phone and fax implementation has already been made by means of the Telecommunications (Data Protection and Privacy) Regulations 1999. For mail and e-mail the DTI considers that the self-regulatory schemes that are currently in place provide the necessary protection.

There are a number of schemes which allow consumers to register their wish not to receive unsolicited marketing material or telephone calls:

  • Unwanted Telephone Sales Calls - Telephone Preference Service 0845 070 0707, 5th Floor, Haymarket House, 1 Oxendon Street, London SW1Y 4EE.
  • Unsolicited Marketing Faxes - Under Government legislation introduced on 1 May 1999 it is unlawful to send an unsolicited fax to an individual which includes consumers, sole traders and except in Scotland partnerships without their prior consent. For further information see:
  • Addressed Direct Marketing Mail - Mailing Preference Service, Freepost 22, London W1E 7EZ.
  • Unaddressed Unsolicited Marketing Mail - The Direct Marketing Association (DMA) has a scheme for consumers who do not wish to receive unaddressed marketing mail - Door to Door Council Manager, DMA, Freepost 22, London W1E 7EZ. To stop unaddressed leaflets delivered by the Royal Mail, consumers should write to Royal Mail Door-to Door Service, Freepost, Beaumont House, Oxford OX4 5BR.
  • Unsolicited Marketing E Mails - If you wish to register not to receive Unsolicited Commercial E-mails (UCE), the EMPS (E-mail Preference Scheme) is operated by the DMA in the United States. Please note that the database is held in the US, and your personal data is not, therefore, covered by UK Data Protection legislation. For further details see

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    New rules to control car prices come into force

    New Government measures to bring down car prices took effect on the 1st September 2000 as the first X-registration cars left the forecourts. The Supply of New Cars Order, introduced to bring about greater competition in the supply and sale of new cars, was announced by Secretary of State for Trade and Industry, following a Competition Commission investigation, which concluded that prices paid by private buyers for new cars in the UK are on average 10 per cent too high.

    The central measure in the Order requires suppliers to offer dealers who buy cars outright similar volume discounts to those offered to fleet buyers. Suppliers must make their first offer of volume related discounts to dealers before 30 November.
    The Order also:

    • stops suppliers from discriminating in respect of discounts when supplying cars to a contract hire company according to whether the end-user is a private or fleet buyer;
    • stops suppliers from discriminating against or refusing to supply dealers because of the dealer's advertised resale prices;
    • stops suppliers from agreeing to pay bonuses or give preferences to dealers on the grounds of the number of cars pre-registered by the dealer;
    • requires suppliers to publish information about the number of cars they have pre-registered; and
    • ensures that sales of cars obtained from authorised dealers in other EU Member States count towards dealers' annual sales targets, performance against which can affect whether a dealer keeps it's franchise.

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    Law Society rapped by Office of Fair Trading

    Concerns about the Law Society’s failure to deal effectively with mounting complaints against solicitors nearly lost them their Group Consumer Credit Licence last month (June 2000).
    John Bridgeman, Director General of Fair Trading, has renewed the group credit licence of the Law Society of England and Wales for only one year, subject to quarterly reviews. Group licences are normally issued for five years. In giving such a limited extension to the Law Society Mr Bridgeman made clear that the Society needed to deal with the level of consumer complaints much more effectively and quickly.

    Mr Bridgeman said: ‘I gave very serious thought to removing from the Law Society its group credit licence. The volume of complaints against solicitors and the continuing failure of the Law Society to take effective action to improve matters substantially causes me great concern. It serves to undermine public confidence in the profession.
    ‘Most importantly, the Law Society should seek to change its members’ attitude to complaints and recognise that effective complaint handling at an early stage is the best way of ensuring they have satisfied customers.
    ‘Some progress has been made over the last year but only in respect of the complaints backlog being dealt with by the Office for the Supervision of Solicitors. This is not sufficient to remove my underlying worry that insufficient importance is given to consumer care. ‘However if the Society’s self regulatory regime can be made to work, it will offer consumers a level of protection that would be extremely difficult to match through any other system. I am giving the Law Society a final warning and a final chance to put their house in order. I will renew the licence for a further year, but during that year my Office will conduct quarterly reviews of progress.
    ‘If substantial and quantifiable progress is not made action to revoke the group licence will be taken. The Law Society should not mistake the fact that this is very much a last chance and that I will expect evidence of real movement by the time of the first review of the licence in early November.’

    If the group licence is not renewed it would mean that solicitors who hold a practising certificate which is in force - would have to apply for individual standard licences under the Consumer Credit Act 1974, if they wished to engage in activities regulated by the Consumer Credit Act 1974.

    For full details see the Office of Fair Trading site.

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    New Control of Misleading Advertisements Regs

    These Regulations, which came into force on 23 April, implement Council Directive No. 97/55/EC which amends Directive 84/450/EEC concerning misleading advertising so as to include comparative advertising. These Regulations amend the Control of Misleading Advertisements Regulations 1988 (S.I. 1988/915) by adding provisions dealing with "comparative advertisements" to the regime governing "misleading advertisements".
    A "comparative advertisement" is defined as being an advertisement which either implicitly or explicitly identifies a competitor or goods or services offered by a competitor (regulation 3(4)). A comparative advertisement is permitted only when certain conditions are met.
    1. it is not misleading;
    2. it compares goods or services meeting the same needs or intended for the same purpose;
    3. it objectively compares one or more material, relevant, verifiable and representative features of those goods and services, which may include price;
    4. it does not create confusion in the market place between the advertiser and a competitor or between the advertiser's trade marks, trade names, other distinguishing marks, goods or services and those of a competitor;
    5. it does not discredit or denigrate the trade marks, trade names, other distinguishing marks, goods, services, activities, or circumstances of a competitor;
    6. for products with designation of origin, it relates in each case to products with the same designation;
    7. it does not take unfair advantage of the reputation of a trade mark, trade name or other distinguishing marks of a competitor or of the designation of origin of competing products;
    8. it does not present goods or services as imitations or replicas of goods or services bearing a protected trade mark or trade name.
    A good example of comparative advertising is in the current widespread practice of supermarkets displaying a 'basket', or 'trolley' of goods with a considerable saving identified if you buy them in their store!!
    The provisions of the principal Regulations, which require the Director General of Fair Trading to consider complaints (other than frivolous or vexatious ones) about misleading advertisements are extended to apply to complaints concerning comparative advertisements. Similarly the provisions empowering the Director to bring proceedings for an injunction to prevent the publication or continued publication of an advertisement is extended in relation to a comparative advertisement which he considers is not permitted under Regulation 4A.

    In all a very valuable piece of legislation, which not only protects consumers from misleading advertisements, but competitor businesses as well. The full text of the amendment regulations can be seen on the HMSO site.

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    New Competition Act in force

    This Act, which came into force on 1st March 2000 introduces new competition rules which prohibit agreements, business practices and conduct that damage competition in the UK.
    The new rules are designed to ensure that UK businesses remain competitive. Complying with them will help to ensure that business is as competitive as it can be - good for businesses and good for consumers.

    The Act has implications for businesses of all types and sizes - even sole traders. There is limited immunity from financial penalties for ‘small agreements’ and ‘conduct of minor significance’, but this does not extend to agreements to fix prices, nor cover the other consequences of infringement, such as agreements being made void and the possibility of being sued for damages. Moreover, the Director General has the power to withdraw the immunity in certain circumstances.
    It is recognised, however, that the way in which small businesses choose to ensure compliance may reflect their size. In other words, smaller undertakings will not be expected to implement a formal compliance programme, but they will need to ensure that their employees are aware of and kept up to date with the possibility of anti-competitive practices and their consequences if they are to demonstrate that they have taken adequate steps to achieve compliance.

    The Act prohibits agreements and practices that prevent, restrict or distort competition - or are intended to do so. These can be formal agreements or informal, written or not. In general terms, the Competition Act 1998 outlaws any agreements, business practices and conduct which have a damaging effect on competition in the United Kingdom.
    More specifically, the Act prohibits:

    • those agreements between undertakings, decisions by associations of undertakings (such as trade associations), and concerted practices which prevent, restrict or distort competition, or are intended to do so, and which may affect trade within the United Kingdom (known as the Chapter I prohibition) - this prohibition applies to both informal and formal arrangements (that is, agreements, decisions, or practices), whether or not they are set out in writing and
    • the abuse by one or more undertakings of a dominant position in a market which may affect trade within the United Kingdom (the Chapter II prohibition).
    Under the Act, the UK regulatory authorities have powers to investigate undertakings believed to be involved in anti-competitive activities and to impose financial penalties where appropriate. Third parties may be able to claim for damages in the courts.

    Although many different types of agreement are caught by the prohibition, the Act lists specific examples to which the prohibition is particularly applicable. These include:

    • agreeing to fix purchase or selling prices or other trading conditions;
    • agreeing to limit or control production, markets, technical development or investment;
    • agreeing to share markets or supply sources;
    • agreeing to make contracts subject to unrelated conditions;
    • agreeing to apply different trading conditions to equivalent transactions, thereby placing some parties at a competitive disadvantage.
    The Act is enforced by the Director General of Fair Tradings, and he has wide-ranging powers to investigate suspected breaches. Officials can enter premises and demand relevant documents, and may even get a warrant to make a search. Offending agreements or conduct can be ordered to be terminated.
    If there are reasonable grounds for suspecting that an undertaking is infringing either prohibition, he - or authorised officials acting on his behalf - can enter premises and require the production of documents he considers relevant to the investigation.
    Further, if he obtains a warrant from the High Court or the Court of Session, he - or his authorised officials - can enter the premises, using reasonable force where necessary, and search for documents. Normally, only copies of any relevant documents will be taken away but, in limited circumstances, originals may be seized.

    Where an undertaking is found to have breached either prohibition, the Director General may order the business to terminate or amend the offending agreement or cease the offending conduct.
    Further, the Director General has the power to order interim measures which require an undertaking to refrain from engaging in suspected illegal activity while he investigates the matter. But he will exercise this power only when he considers it necessary to take urgent action to protect third parties from suffering serious, irreparable damage, or to protect the wider public interest.
    Undertakings found to have infringed either prohibition may be liable to a financial penalty of up to 10% of their turnover in the United Kingdom. The turnover of an undertaking for the purposes of this maximum cap on penalties is defined in the Competition Act (Determination of Turnover for Penalties) Order 2000
    In addition those parts of any agreement which are found to infringe the Chapter I prohibition are null and void and therefore cannot be enforced. Third parties who consider they have been harmed as a result of any unlawful agreement, practice, or conduct may have a claim for damages in the courts.

    Full information can be obtained from the Office of Fair Trading site

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    New Price Marking Order in force

    Made on 10th November 1999 under section 4 of the Prices Act 1974, this Order implements Directive 98/6/EC of the European Parliament and of the Council (OJ No. L180, 18.3.98 p. 27), on consumer protection in the indication of the prices of products offered to consumers.

    The Order completely revokes the Price Marking Order 1991 from 18th March 2000 and applies to all products offered by traders to consumers other than those supplied in the course of the provision of a service, those sold by auction or works of art or antiques. With specified exceptions, the Order requires that the selling price is given where a product is offered by a trader to a consumer.

    The Order also requires, subject to specified exceptions, that the unit price must be indicated for all products sold from bulk or for pre-packaged products which are required by or under Parts IV or V of the Weights and Measures Act 1985 to be marked with quantity or to be made up in a prescribed quantity.

    The Order requires the display of prices in sterling but permits additional indications of price in a foreign currency subject to specified conditions. All price and other indications required under the Order are subject to requirements on visibility. Prices are required to be inclusive of VAT and all other taxes and provision is made in respect of price indications following a change in the rate of VAT. Provision is also made in respect of the manner in which the unit price shall be expressed with regard to decimal places and roundings of figures.

    You can see the full text of the Order on the HMSO website

    In more detail, the Order requires the display of:

    1. The selling price;
    2. The unit price for goods sold;
      • Loose from bulk (for example, fruit and vegetables)
      • Pre-packaged - goods which are required by Weights and Measures legislation to be marked with quantity or to be made up in a prescribed quantity.
    Where goods are made up by quantity the standard units of quantity are:
    1. Kilogram
    2. Litre
    3. Metre
    4. Square metre
    5. Cubic metre
    Although, for a range of goods, both foods and non-foods, alternate units must be used, e.g. bread must be unit priced per 100g. The legislation includes the full list of alternate units and where they must be used. Where goods are sold by number then the price per single item must be shown.

    As always, price marking must be unambiguous, easily identifiable and clearly legible. The order does not give hard and fast rules as to how this is to be attained, it does however require that consumers should not have to ask assistance in order to see prices.
    In addition prices can be shown in a number of ways, provided they meet the above requirements. For example

    • On the goods themselves
    • On a ticket or notice near to them
    • Grouped together with other prices on a list or catalogue(s) in close proximity to them.
    Note that goods kept out of sight of the consumer are exempt from price marking until they are put up for sale. All prices must be inclusive of VAT. Other charges may be shown separately but they must be easy to identify, easy to read and must not confuse the consumer.

    For more detailed advice for retailers please visit our TS Help section or go directly to the Price Marking advice page.

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New consultation on Injunctions Directive

The European Directive on injunctions for the protection of consumers' interests (Directive 98/27/EC), known as the "Injunctions Directive", was adopted on 19 May 1998. It has to be implemented in all Member States by 1 January 2001.

The purpose of the Directive is to permit consumer protection bodies to apply to the courts or competent administrative authorities both in their own and in other Member States for orders to stop traders infringing the legislation implementing nine specific consumer protection directives where these infringements harm the collective interests of consumers. It is not however intended as a means of seeking redress for individual consumers.

The nine directives are:

  1. misleading advertising (84/450/EEC as amended by 97/55/EC);
  2. contracts negotiated away from business premises ("doorstep selling") (85/577/EEC);
  3. consumer credit (87/102/EEC as last amended by 98/7/EC);
  4. TV broadcasting activities (89/552/EEC (Articles 10 to 21) as amended by 97/36/EC);
  5. package travel, package holidays and package tours (90/314/EEC);
  6. advertising of medicinal products for human use (92/28/EEC);
  7. unfair terms in consumer contracts (93/13/EEC);
  8. timeshare (94/47/EC); and
  9. distance contracts ("distance selling") (97/7/EC).
A tenth, the recently adopted directive on the sale of consumer goods and associated guarantees (99/44/EC) is also covered but is not required to be implemented until 1 January 2002. The results of this consultation will be built into the implementation plans for that directive, on which there will be separate consultation.

The UK Government's proposed approach and options for implementing the Directive is planned in such as way as:

  • not to undermine existing regulatory and self-regulatory procedures;
  • not to place undue burdens on business;
  • to enable private consumer bodies, which meet strict criteria, to take action;
  • to ensure there is co-ordination between UK consumer bodies to prevent multiple challenges to businesses;
  • consumer bodies, including those from other Member States, must consult both the trader and a nominated public body before they can take court action.
The Directive supports the aim of improving the enforcement of EU consumer protection legislation. It provides novel opportunities for consumer protection authorities and bodies to take action against infringements which originate in one Member State but have their harmful effects on consumers in another.

The ability for consumer protection bodies to apply for injunctions (interdicts in Scotland) to stop infringements of the listed directives is intended as an additional enforcement mechanism which will run alongside, rather than replace, existing procedures such as criminal proceedings where these are already provided for in legislation.

The DTI is anxious to receive views from a wide range of interests, and more details of the Directive and the consultation process can be found on their website at:

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New Financial Services Ombudsman

New arrangements for resolving consumers' financial complaints will come into force later this year when a new Financial Services Ombudsman service is launched.
This service will bring together eight different complaint handling and ombudsman schemes which currently operate in the financial sector - for example the Banking Ombudsman, the Building Societies Ombudsman, the Insurance Ombudsman, the PIA Ombudsman etc. It is hoped that this 'one-stop shop' approach will provide a better service to consumers with better accessibility, and certainly co-ordination of complaints against rogue businesses should be much better than it has been to date.

The Financial Services Authority are keen to generate as much comment and debate about how this service should be set up and operated. Please visit their website and send in your comments, especially if you have had any bad experiences in this sector.....hey! - who hasn't ;)

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Contract awarded for international price survey

The contract for the international price survey of consumer goods, promised in the recent Department of Trade and Industry White Paper on Consumer Affairs, has been awarded to leading marketing research company AC Nielsen.

This will be an annual study to investigate price differentials using a 'shopping basket' of 100 items between the UK and the US, France and Germany. The DTI will take action if any discrepancies are found to be caused by anti-competitive behaviour.

The outcome of the study will be followed with some interest as many commentators have remarked on the noticeable price differences between the UK, and especially the USA, which cannot be explained away by things like sales taxes, exchange rates, and overheads.

Some of the price differences highlighted in a recent Which report included Levi jeans which were 45ukp in London but 32.50ukp in New York, a Ralph Lauren shirt which was 70ukp in London and 33ukp in NYC, and an Olympus camera which was 150ukp in London and only 99ukp in New York.

As we are currently seeing with the motor car industry, the more pressure which can be put on manufacturers to reduce prices the better. And the more flexible and confident that consumers are to purchase goods in other countries, or through the internet, the more that prices will have to fall in the UK, for UK manufacturers and retailers to retain their current levels of business.
It's simple supply and demand.... hopefully!

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New proposed Comparative Advertisements Regs

The Government is currently consulting on the proposed Control of Misleading Advertisements (Comparative Advertisements) (Amendment) Regulations 2000 which are intended to implement the requirements of Directive 97/55/EC concerning misleading comparative advertising ("the Directive").
The UK is obliged to implement any necessary changes in law by 23 April 2000.

Comparative advertising is defined in the Directive as being any advertisement which explicitly or by implication identifies a competitor or goods or services offered by a competitor. Generally such advertising is already permitted in the UK, subject to both voluntary and legal controls . The voluntary controls include specific rules relating to comparative advertising, which are similar to the conditions in the Directive, contained in the advertising industry’s British Codes of Advertising and Sales Promotion. The broadcasting regulatory bodies’ respective codes on advertising also contain very similar provisions. The regulatory bodies have statutory powers to direct licence holders to ensure that the provisions of these codes are complied with. Fundamentally, therefore, for practical purposes, it is the DTI's view that advertising practice in the UK is unlikely to be affected to any great extent by these changes in the law.

The Directive is primarily a consumer protection measure having among its objectives the promotion of the single European market. It is intended to harmonise laws on comparative advertising in Member States by amending the Misleading Advertising Directive (84/450/EEC) so as to permit comparative advertisements providing the following conditions are met:

  1. they are not misleading;
  2. they compare goods or services meeting the same needs or intended for the same purpose;
  3. they objectively compare one or more material, relevant, verifiable and representative features, which may include price;
  4. they do not create confusion in the market place between the advertiser and the competitor or between the advertiser’s trade marks, trade names, other distinguishing marks, or his goods and services, and those of a competitor;
  5. they do not discredit or denigrate the trade marks, trade names, other distinguishing marks, or the goods, services, activities or circumstances of a competitor;
  6. if the comparison relates to a product with a designation of origin under Council Regulation (EEC) No. 2081/92 of 14 July 1984 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs, the comparison is only permitted if it compares the product with another product with the same designation of origin;
  7. they do not take unfair advantage of the reputation of a trade mark, trade name other distinguishing mark of a competitor or of the designation of origin of competing products;
  8. they do not present goods or services as imitations or replicas of goods or services bearing a protected trade mark or trade name;
  9. where a comparison relates to a special offer it must indicate clearly the date on which the offer closes, or, if appropriate, that the offer is subject to availability. If the offer has not yet begun it must also indicate the commencement date of the period during which the offer is valid.
To facilitate the extended scope of the Misleading Advertising Directive, the Directive also extends the enforcement Articles of Directive 84/450/EEC so that they apply to the control of comparative advertisements as well. This includes the requirement that advertisers must be able to substantiate their claims and that Member States must have in place sufficient enforcement provisions to enable the purpose of the Directive to be met.
The main means by which the Government will implement these requirements is by amending the Control of Misleading Advertisements Regulations 1988 (SI 1988/915) to include the conditions for comparative advertising mentioned above. The amendment will also extend the enforcement responsibilities of the Director General of Fair Trading (DGFT) and the responsibilities of the Independent Television Commission, the Welsh television authority, and the Radio Authority in respect of comparative advertisements.

Financial Services
Investment advertisements, advertisements in respect of investment business, and other advertisements which are covered by the separate regime under the Financial Services Act 1986 and which are currently excluded from the coverage of the 1988 Regulations will continue to be excluded. Assurances have been given by the FSA that the current financial services regime is capable of adequately implementing the Directive in respect of those advertisements which feature comparisons.
It is proposed that the new financial services regime being formulated under the Financial Services and Markets Bill will extend to deposit and general insurance advertisements as well. When the new regime comes into force, it is therefore envisaged that the Control of Misleading Advertisements Regulations will be further amended to exclude advertisements for deposit and general insurance services.

For more details on these proposals, search the Department of Trade and Industry site at

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Under age sales survey shock!

Trading Standards Officers call for introduction of a Proof Of Age Scheme after a national survey by Trading Standards Officers found more than one in six shops in England and Wales flouted the law by selling restricted goods to children. In some areas the figure was even higher - 75 per cent of traders selling to under-age children in the Isle of Wight, 66.7 per cent in the London Borough of Bromley and 60 per cent in Wolverhampton.
Young volunteers, aged between 10 and 14, were sold items such as cigarettes, adult videos, solvents, National Lottery tickets and knives - in many cases with no questions asked.

The area with the highest percentage of sales of age-restricted goods was the Isle of Wight, where a 13-year-old girl managed to buy cigarettes at 21 out of 28 premises visited.
Kevin Law, Isle of Wight Area Trading Standards Officer, said: 'We were very surprised by the results because we believed the shopkeepers in the area were very responsible. 'Most of them do more than is required in the way of displaying notices and prompts on tills for staff to ask the age of young people. 'The traders themselves have been shaken by this survey because, despite their precautions, staff obviously still sold to a 13-year-old girl. We have given them oral and written warnings - our advice is even if someone looks 16 or 17 ask them to prove they are.'
Wolverhampton Trading Standards, in the West Midlands, used two 13-year-old boys in their survey and found retailers sold to them in six out of 10 cases - the highest for any borough outside London. Peter Calvert, Divisional Manager for Wolverhampton Trading Standards, said: 'We were quite surprised by the level of sales as it runs against the trend in other surveys we have carried out in the last two years.'
A total of 59 Trading Standards authorities in England and Wales took part in the survey, visiting 2,388 premises. The young volunteers were able to buy age-restricted goods in 412 premises. They were asked for their age in 725 outlets and for further proof of age in 402 cases.

See the ITSA site at for more details and the full press release.


				Visits 	Purchase Made
English Counties 		1000 		181
English Districts 		867 		137
London Boroughs 		261 		44
All English 		2128 		362
Wales 			260 		50
All English and Welsh 	2388 		412

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Mortgage Brokers survey shock!

LACOTS, the Local Authorities Co-ordinating Body on Food and Trading Standards have recently collaborated with trading standards authorities across the UK in a survey examining broker compliance with the requirements of the Mortgage Code. This survey involved nineteen local authorities from around the country undertaking mystery shopper visits to 160 brokers. These visits took place during the latter half of July and August, and coincide with a Government review of the regulation of mortgages.

The survey findings will make for disturbing reading for consumers. The considerable efforts that have gone into developing the Code and promoting compliance are not being reflected out on the high street. In far too many cases, the survey found little or no information about mortgage products and the services offered by brokers, giving the public bad advice and putting their finances at risk.
The Mortgage Code defines a number of minimum requirements for mortgage lenders and brokers. These are intended to ensure that consumers receive adequate and appropriate information. In practice, however, the experience of local authority ‘mystery shoppers’ is that brokers are either unfamiliar with the Code requirements or unconcerned with meeting them. For example the survey found that:

  • 29% of brokers did not even tell consumers about the Mortgage Code;
  • 33% of brokers gave no description of the service they provide;
  • 35% of brokers did not say on whose behalf they were acting;
  • 40% of brokers were considered to have offered inadequate advice or information;
  • 70% of brokers did not tell consumers of their data access rights;
  • 28% of brokers did not give any written information about their service; and
  • 67% of brokers failed to display an Mortgage Code Arbitration Scheme notice.
The inescapable conclusion is that the present arrangements are proving insufficient to ensure an adequate standard of consumer protection and confidence. Whilst self-regulation undoubtedly has a part to play, some legislative enhancement is necessary to deliver the desired minimum standards.
In conjunction with the Local Government Association and ITSA a press release has been issued drawing attention to the key findings. Copies of both this and the full report are available to download from

Concern about the mortgage sales process, particularly the scope for mis-selling, is at an all time high. The factors fuelling this disquiet are many, but include:

  • the creation of a new control framework for the financial survey industry;
  • widely reported evidence of mis-selling across a range of investment products;
  • the resurgence in the housing market; and
  • evidence of actual or perceived consumer detriment in relation to mortgage sales.
Mortgages are complicated products - and are becoming ever more complex. As well as the loan itself, consumers have to take a view on a number of related considerations, including investments, insurance, fees and potential charges. A mortgage broker can therefore play a key role in helping consumers understand and decide upon the appropriate product(s). Even the best-informed consumer would benefit from informed and impartial advice, for those less able it is vital that the quality of service from mortgage brokers is at least adequate. The simple truth is that the current self-regulatory system does not ensure this.

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New Unfair Terms in Consumer Contracts Regulations

Coming into force on 1 October 1999, the new Unfair Terms in Consumer Contracts Regulations 1999, (SI 1999/2083) revoke and replace the existing Unfair Terms in Consumer Contracts Regulations 1994 (S.I. 1994/3159) and should provide much greater protection for consumers as was promised in the recent White Paper on Consumer Affairs (see next story)

The regulations re-enact most of the 1994 Regulations with modifications to reflect more closely the wording of the EC Directive 93/13/EEC on unfair terms in consumer contracts (O.J. No. L95, 21.4.93, p. 29). One of the most significant extensions is the ability of bodies other than the Office of Fair Trading to seek injunctions (in Scotland interdict) to prevent the continued use of potentially unfair contract terms in consumer contracts.
One of the great problems of the original regulations was that the resources of the OFT were so stretched in this area that no traders were ever taken to court, and some were not pursued, even if they failed to change their terms - or ignored the Office completely!
Devolving powers to local authority trading standards services will have a greater impact as action can be taken locally and much more swiftly.

The Regulations apply, with certain exceptions, to unfair terms in contracts concluded between a consumer and a seller or supplier (regulation 4). They provide that an unfair term is one which has not been individually negotiated and which, contrary to the requirement of good faith, causes a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer. Schedule 2 contains an indicative list of terms which may be regarded as unfair.
Importantly unfair contract terms are not binding on the consumer (regulation 8).

The Regulations do maintain the obligation on the Director General of Fair Trading to consider any complaint made to him about the fairness of any contract term drawn up for general use, but the other qualifying bodies named in Schedule 1 (statutory regulators, trading standards departments and Consumers' Association) may also apply for an injunction to prevent the continued use of an unfair contract term provided it has notified the Director General of its intention at least 14 days before the application is made.

The Regulations also provide a new power for the Director General and the public qualifying bodies to require traders to produce copies of their standard contracts, and give information about their use, in order to facilitate investigation of complaints and ensure compliance with undertakings or court orders.

If you have any doubts about any terms in contracts you have for goods or services, give your local trading standards service a call!

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Consumer Affairs White paper

In its new White Paper, modern markets: confident consumers, released by the DTI on 23 July, the Government has set a new consumer agenda:
  1. to promote open and competitive markets
  2. to provide people with the skills, knowledge and information they need to become demanding consumers
  3. to encourage responsible businesses to follow good practice
  4. to avoid burdening those businesses with unnecessary regulation
  5. to protect the public from serious trading malpractice and unsafe products.
The Paper states that open and competitive markets are the best guarantee of a good deal for consumers and proposes a framework that fosters free and fair competition, but is tough on those who seek to damage the competitive process.

The Government is also launching an annual study to investigate price differentials between the UK and the US, France and Germany. That is a proposed 'shopping basket' of 100 items. Competition authorities will then take action if any discrepancies are caused by anti-competitive behaviour.
To make informed choices, consumers need reliable information on price, quality and the safety of products.

    To that end steps will be taken to ensure:
  • better information on prices
  • truthful advertising and claims
  • the provision timely information
  • the building of knowledge and skills
  • customer service is promoted
  • effective codes of practice
  • good practice
  • more help ia available for business
Many of these things will be achieved by changes in the law to give trading standards officers access to tougher controls on pricing, fair trading, and misdescriptions of services. And to ensure that small businesses as well as consumers are protected.
Consumer education is also made a top priority. The Government is proposing to work with a wide range of groups including local authority trading standards services who have already developed a wide range of training packages for adults and schoolchildren.
The Office of Fair Trading is to have an enhanced role in the approval and publicising of codes of practice for various trades. There are already a vast number of codes, but all are self regulated, and in many cases this has not worked to the consumers advantage. New codes are more likely to be standards based.

The Government has recognised what TSOs have known for decades - existing law fails to deter the small number of rogue traders who continually disregard legislation aimed at protecting consumers. The Government now wants a much clearer targeting of the dishonest.

    It plans:
  • a power for the courts to grant injunctions against specific practices carried out by specified traders
  • a power for the courts to ban from trading for a period of time those traders with a history of disregarding their legal obligations
  • a power for the Secretary of State for Trade and Industry to make orders by secondary legislation specifying that certain practices which have been shown to be harmful should be made illegal.
  • that the power to seek injunctions and banning orders will be made available to local authorities as well as the OFT.
  • a modern trading standards service in local government, strengthened to meet the expectations of consumers and business, including money for more and better training to provide more officers to enforce consumer protection law and ensure a high quality service across the country
  • to widening the enforcement base by giving more bodies the right to take action against unfair contract terms and to seek injunctions against traders who breach the law in nine key areas.
The whole White Paper is available in .pdf format from the new DTI site

At last the document we have been waiting for to provide the protection consumers need, and plug the gaps and loop holes of existing regulation....or is it?

It remains to be seem if all the threads of the proposals will be implemented or if it is well intentioned waffle, but there are a lot of good proposals which will be universally welcomed:

  • extension of Fair Trading controls to trading standards from the OFT. The OFT has long had extensive powers in these areas, but its remoteness and resource difficulties has meant frustration for consumers and TSOs when action has not been as swift as it could have been. These powers should really bite on cowboy traders.
  • review of Trade Descriptions legislation to cover services to the same extent as goods. A long standing anomaly!
  • extension of controls over homeworking schemes and trading schemes legislation.
  • improved focus on counterfeit goods and car clocking enforcement.
  • new proposals on the froth on beer question which has been around for ever! - it remains to be seen what can be done about this and in fact this is a small item which has already been jumped on by news reporters in an unhelpful way.
  • emphasis on consumer advice, however it does appear that trading standards authorities are sidelined somewhat with more emphasis on advice provision by CABx and other 'advice networks'. This does not recognise the good work that many authorities do in this area and many were hoping that consumer advice would be made a statutory requirement for authorities.
  • additional funding for TSO training is welcome as the service is around 500 officers short across the country, but many services are woefully underfunded at the local level and there needs to be more recognition of this.
  • recognition of consumer difficulties in many different areas, such as electronic commerce, financial services etc.
  • setting up of a new consumer gateway internet site. To be honest this should have been set up years ago, and on first sight appears not to be an amalgam of different agencies as is the excellent US consumer gateway but simply a site containing much of the pre-existing DTI information. We will have to wait and see what happens here. If it gets really good it might even take the place of Trading Standards Net *g*
  • a widening of the 'enforcement base' - it is not completely clear what this will involve, but if for instance, locally unaccountable, organisations such as the Consumers Association are given powers then there may be some confusion in the minds of consumers and businesses as to who the enforcement authorities really are. Enforcement should be retained by a strengthened, locally accountable trading standards service which serves the needs of its local citizens and business.
  • it is also not clear how devolution of Scotland and Wales will affect some of the proposals - the scots legal system for example differs greatly from the english one and proposals on injunctions for example may have to be further discussed north of the border.

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Counterfeiting update

A Devon soft drinks manufacturer has been sent to prison in connection with 'passing off' his products as Coca-Cola and Schweppes soft drinks.
The allegation was that he had refilled empty Coca-Cola and Schweppes boxes with his own 'post mix syrup' - a product which is made up by adding carbonated water in pubs and clubs.

A joint operation between St Helens Trading Standards and HM Customs closed down a clothing scam in the North East recently - a large consignment of fake clothing imported from Portugal raised the suspicions of Customs Officers.

Two midlands traders have been jailed for selling fake goods - one for nine months on eight offences under the Trade Marks Act for selling fake Calvin Klein, Ralph Lauren and Armani clothing - and the other for one month after Trading Standards Officers seized over 500 items of fake clothing from a market in Warwickshire.

A joint operation between Police and Trading Standards Officers in Swindon led to a counterfeit clothes seller being jailed for nine months after a raid on his house netted nearly 100 fake items.

It is estimated that Formula One stars like Damon Hill and Michael Schumacher have lost up to 100 million pounds in a swindle involving poor quality fake sports wear and F1 memorabilia. A team of private detectives are on the case!

For more information on anti counterfeiting work try the Anti-Counterfeiting Group website.

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End to unwanted junk faxes?

UK consumers and businesses have greater protection against receiving unwanted "junk" faxes and phone calls, thanks to The Telecommunications (Data Protection and Privacy) (Direct Marketing) Regulations 1998 which came into force at the beginning of May 1999.

The Regulations give effect to the direct marketing provisions of the Telecoms Data Protection Directive (97/66/EC) which requires EC Member States to put in place a scheme to ensure that individuals who do not wish to receive unsolicited direct marketing calls do not continue to receive such calls. The Regulations also make provision for protection against unsolicited direct marketing by fax. In the case of individual subscribers, unsolicited direct marketing faxes are not permitted unless the recipient has expressly consented. Corporate subscribers may choose to opt-out of receiving such faxes with the scheme (as may individuals if they want the additional safeguard).
"Individual" for the purpose of these Regulations refers to private individuals and sole traders throughout the UK, and partnerships in England, Wales and Northern Ireland.

The regulations:

  • provide a ban on sending unwanted "junk" faxes to individuals;
  • enable people to opt-out of receiving unwanted direct marketing phone-calls by registering, free of charge, their name with a centralised list;
  • enable companies to sign up to a similar scheme to avoid receiving "junk" faxes;
  • require marketers to offer a contact address or freephone number so that people can contact them to ask to be removed from their databases.
It is now an offence to send unsolicited direct marketing faxes to an individual. In addition, companies who do not wish to receive unsolicited direct marketing faxes, and individuals who do not wish to receive unsolicited direct marketing phone calls, will be able to register with opt-out schemes, run by the Direct Marketing Association appointed by OFTEL.

Welcoming the regulations, a Department of Trade and Industry spokesman said:

"Being disturbed at home by an unwanted phone call from someone trying to sell you a product you don’t want is for many an irritating invasion of privacy.
"Its even more frustrating for people who have a fax at home who receive unwanted junk faxes that not only use up their fax paper, but can also disturb them at night.
"Small companies in particular, are frustrated by this. Having their fax machines clogged by unwanted advertising and "joke" faxes not only costs money, but important business correspondence can be delayed as a result.
"Thankfully, most businesses are committed to responsible direct marketing practices; these Regulations will ensure greater protection for individuals and businesses against those few unscrupulous operators who do sadly exist".

People wishing to register with the opt-out schemes from 4 May should call:
0845 070 0707 for telephone preference registration; and
0845 070 0702 for fax preference registration
Direct marketing businesses should call 01932 414161 for an information pack.
The Regulations will be enforced by the Data Protection Registrar.

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EC Consumer Complaint Form

A new European consumer complaint form has been drawn up by the services of the European Commission, as part of an ongoing initiative looking at ways to help in consumer redress and access to justice.

The form is designed to improve communication between consumers and businesses, with a view to helping them reach amicable solutions to problems which they may encounter in their various transactions.

It can be used for disputes within national frontiers or those extending to the rest of the European Union. The form has been designed to "guide" and orient consumers in formulating their claims and contains multiple-choice lists of responses to help consumers indicate their problems and their claims, together with sufficient space for users to give additional details or describe particular circumstances not covered by the multiple-choice lists.
The multiple-choice design, and the fact that the form is available in all 11 languages of the European Union, should facilitate the problem of translation in cases of cross-border disputes where the parties speak different languages.

At the moment this is the start of a pilot project, supported in the UK by the DTI in order to assess the form’s relevance and effectiveness. Depending on the results, the Commission will then make any changes deemed necessary.
The European complaint form is in no way designed to replace the first stage of dialogue between consumer and trader. It should be used only if this initial contact fails to produce a satisfactory result, and can then take the place of the letter of complaint that consumers would normally have drafted.

The EC consumer complaint form could be a useful tool, helping to resolve consumer disputes, and if widely adopted making it much easier for consumers to act for themselves. However at the moment there are many barriers to its success, most importantly traders will be unaware of it and most small traders may be unwilling to accept it. If it is so easy to use consumers may abuse the process, using the form to make frivolous complaints and bringing the whole idea into disrepute. Crossborder complaints, although few, will also be a problem - although the form is available in many languages someone will still have to translate the actual complaint into another language which could prove difficult. But lets see what happens...many local authorities and consumer agencies across the EU will undoubtably support the use of the form in the trial period.

For more details on this project see the EC site at:

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Utility regulation review

The Government has published a document proposing changes to the way in which the gas, electricity, water and telecommunications utilities are regulated.
The intention is to introduce legislation to set a framework which will ensure lower prices and higher quality services for consumers.

Key proposals include:

  • the regulatory framework should be able to address structural changes in the utility markets, for instance multi-utilities
  • Offer and Ofgas should merge
  • consumer protection should be the regulators primary duty
  • independent consumer councils should promote the consumer interest
  • the formula RPI-X (retail price index minus X) should be retained as the fundamental system of price regulation
  • regulators should however consider appropriate cases where it might be appropriate to refine this formula to reflect the Green Paper principles on price regulation
  • a clearer link should be made between the prices utilities can charge and the customer service standards they achieve
  • full information should be available on company performance on customer service standards and on the links between this performance and the pay of directors
  • ministers should issue statutory guidance on social and environmental objectives
  • the energy and telecommunications regulators should be replaced by executive boards
More details on this matter can be obtained from the DTI web site

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UK car prices too high

A regular survey by the European Commission has confirmed again that prices in the UK are the highest for new motor vehicles in the European Union.
The survey shows that some cars are also 40 percent dearer than in Ireland, which is also a right hand drive country.

The biggest discrepancies were found in the case of the Ford Mondeo which is cheapest in Spain and is a staggering 58.5 percent dearer in the UK.
Ironically the whole Rover range is most expensive in the UK!

However some manufacturers have reduced their UK prices, for example the Peugeot 106 by 7 percent and the Renault Megane by 16 percent.
There was much less price divergence between other European countries, for example between France and Spain the differences averaged less than 10 percent.

Further information on the European Commission survey and other related matters can be found on the EU website.

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RRPs outlawed

A new Order, laid before Parliament on the 20th May, is set to abolish the use of suppliers Recommended Retail Prices (RRPs) by retailers for certain domestic electrical goods.
It follows a Monopolies and Mergers Commission inquiry into the market in certain electrical goods which uncovered some potentially anti-competitive supplier practices.
The Restriction on Agreements and Conduct (Specified Domestic Electrical Goods) Order 1998 comes into force on 1st September 1998 and prohibits suppliers from recommending or notifying a price at which 'specified goods' should be resold.

These goods are:

  • camcorders
  • cold food storage equipment
  • dishwashers
  • hifi systems
  • televisions
  • tumble driers
  • video cassette recorders
  • washing machines
It will be unlawful for a supplier (a person carrying on a business of selling specified goods other than a business in which such goods are sold only by retail)
  1. To notify to dealers prices recommended or suggested as appropriate to be charged by those dealers
  2. To make an agreement to restrict a dealers determination of the prices at which he advertises or sells specified goods
  3. Except where allowed, to withold supplies of any specified goods from any dealer
  4. To discriminate between one dealer and another in the prices he charges them on the grounds that the dealer is likely to advertise or sell goods cheaper than the other
  5. To give any preference to any dealer on the ground of the prices at which the dealer has advertised or sold any specified goods
  6. Tp procure a supplier to contravene the provisions described in 1 to 5 above
This Order is made under the Fair Trading Act 1973 and the full text can be viewed on the HMSO site.

Although the Order does not directly refer to the use of rrps by retailers, they should disappear as the only person legally able to make a recommended price is the supplier.
Although currently untested, it is likely that the existing provisions of section 20 of the Consumer Protection Act 1987, combined with the DTI code of Practice on Price Indications, will make the use of rrps (for specified goods) illegal.

The provisions of The Control of Misleading Advertisments Regulations 1988 could also be used, however these are enforced by the Director General of Fair Trading rather than Trading Standards Officers, and may prove less effective.

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Shoppers getting bad deal says OFT

Consumers are getting an increasingly raw deal according to the Office of Fair Trading in their recently published 1997 annual report.

Complaints about goods and services have risen by a quarter over the past five years.
Last year Trading Standards officers, who compile the majority of the figures, received 851,456 complaints, 25,000 more than in the preceding 12 months.
Unsurprisingly secondhand cars topped the list with more than 90,000 complaints with defective electrical goods coming a close second. The newly deregulated gas industry is the fastest growing problem area with complaints up a third on last year.

John Bridgeman, Director General of Fair Trading said that voluntary codes of practice had failed to stem the tide of complaints.

To find out more about the OFT visit their website at

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Premium phone line scam

Consumers should watch out for a new high priced premium rate telephone call scam which is currently doing the rounds:-
Thousands of letters have been sent out all over the country with an attractive picture of a Mercedes E230 under the words 'CONGRATULATIONS' and your name - hoping to fool people into thinking they may actually have won this car!!!

In fact anyone wishing to check on their prize must call a premium rate number costing £1 per minute with the call lasting for 9 minutes...thats £9 a call!!!
What you are most likely to have 'won' is a cheap wristwatch, or a mobile phone - for which you must take out an airtime contract costing over £200

Although the flyers appear to be perfectly legal consumers are advised to chuck them in the bin and buy nine lottery tickets've probably got a better chance of getting something!!!

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Top 10 Christmas Tips

Forget the goodwill!...For rogue traders Christmas is a golden opportunity to fleece the public, says Trading Standards Net.

To help shoppers avoid the nasties we have compiled a list of our Top Ten Christmas Tips, it's pretty similar to last year - but the points are still worth making.
If you are ripped off over the festive period, or have any other consumer related complaint please contact your local authority Trading Standards Department.

  1. Counterfeits:
    Big stores are sold out of the latest toy or computer game - so how lucky that you can pick one up in the local Christmas market or boot sale!... Chances are though that it is a shoddily made or even dangerous fake....don't disappoint your kids, buy the real thing.
  2. Keep your receipt
    You might like that pair of 70s style flares, but the recipient of the present might not!!...having a receipt will make it much easier to take the gift back after Christmas - faulty or not!
  3. Pirated software
    Counterfeiters find it easy to make a killing at Christmas selling pirated software, or videos, or dodgy computers done up and sold as new....if it works at all you are lucky, if not it will wreck your machine! Buy the proper licensed software - you will at least get some support from the company if you can't figger out how to make it work!
  4. Keep you head at the party
    Make sure you count your change when the party's in full swing after the office night out....thankfully enough people do check to bring a procession of dishonest publicans to book for shortchanging customers when they are a little 'under the weather'. Check your change before it's too late!!
  5. Toys
    Be very careful that the toys you buy your child are safe...heads that come off revealing sharp spikes, lead based paint, small parts a toddler can swallow, bikes that break at the welds...can all cause Xmas danger as well as disappointment. Also be prepared - check that they work before you wrap them up, and make sure you have the correct batteries!!
    Also always check for the CE mark and any warnings on the packaging as to suitability etc.
  6. Buying on the Net
    By all means scan the Internet for bargains, but make sure the vendor is bona fide, always use a secure service for passing credit card details, and allow plenty of time for out especially if you are buying in an internet auction situation.
    Buying on the Web should be as easy as on the phone, but it will be more difficult if things go wrong - especially if the seller is in Australia!!
    Also don't forget that you may be liable to pay VAT and duty when importing goods from abroad - this can add around 25% to the cost.
  7. Homeworking Scams
    A favourite scam to rip off the unsuspecting parent trying to make a few extra bucks over Christmas is the Homeworking scheme- often addressing envelopes, making mobile phone covers or the like. More often then not they turn out to be some simple pyramid scam which sees your money disappear into someone elses pocket - always take advice from your local Trading Standards before paying any money into these schemes, they are regulated.
  8. Loan sharks
    Hard up parents, desperate to give their kids a Christmas to remember are al fair game for these bullies..interest rates of a thousand percent are not uncommon...given the evidence Trading Standards Officers can put these people where belong over Christmas....behind bars
  9. Never never shopping
    For people with limited means, the idea of paying for things by instalments seems a good idea, and worth the slight premium price.
    But make sure you can afford to repay the debts or a happy Christmas could become a miserable New Year.
  10. Electric Shockers
    Electrically unsafe Xmas tree lights can give a nasty shock or set fire to your home, tree ornaments may break and harm a child, or be swallowed or contain toxic careful when decorating this Christmas - make sure lights are double insulated - if in doubt get a new set - they'll cost less than a redecoration job!
These warnings may seem extreme in some cases but experience shows that hundreds of people will be ripped off, or injured by poor quality gifts over the festive careful what you buy this Christmas.

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National Consumer Week 1998

November 2nd sees the start of National Consumer Week 1998, organised by ITSA the Institute of Trading Standards Administration - Trading Standards Officers' professional body.
Right across the UK individual authorities are organising events in connection with this years theme of 'Safety'.
For a listing of this years events in your area see the ITSA press release on Consumer Week.
Many of the projects centre around the problem areas of sale of fireworks to under 18s, incorrect storage of fireworks, testing of electric blankets, and even testing of cars on forecourts for safety by Dundee Trading Standards.

On the theme of firework safety - Consumer Affairs Minister Dr Kim Howells last week launched the final phase of the DTIs year's firework safety campaign.

Sparklers - which burn at up to 2,000 C and caused more injuries than any other firework last year - have been targeted in the Department of Trade and Industry (DTI) campaign which is being supported by Trading Standards Officers across the UK.

Dr Kim Howells said:
'No responsible parent would let a young child near a hot chip-pan, a lit barbecue or a boiling kettle - yet thousands give their children sparklers to use unsupervised.
With millions of children enjoying half-term this week, and with the knowledge that 75 per cent of all firework injuries happen on 5 November and the two surrounding weekends, I am appealing to parents to play their part and help keep all our children safe this Bonfire Night.'

While firework injuries overall have dropped in recent years, injuries from sparklers have been on the increase. Last year sparklers caused nearly a quarter of all firework injuries, accounting for 200 casualties - about 25 per cent being children aged five or under.

In addition, local council trading standards officers will also be helping to enforce firework regulations which, for the first time this year, include a total ban on the sale of all bangers, mini-rockets and aerial shells to the general public. The minimum age of sale of fireworks, including sparklers, is now 18 and retailers are no longer able to split retail packs of fireworks.


The results of a nationwide survey into the storage and sale of fireworks backs the Institute of Trading Standards Administration's demand to hit rogue traders through a formal licensing system.

In the past fortnight, Trading Standards departments across the UK have swooped on retailers selling fireworks and what they found "shocked and appalled seasoned professionals", said ITSA Chairman Eric Robinson.

Amongst the horror stories, he listed fireworks piled in cardboard boxes around a shop and stored with matches and lighter fuel; displays of bangers and mini-rockets that are banned by law, illegally imported fireworks that are positively lethal - and routine sales to children, without any attempt to find out whether they are under age.

"In one case a retailer was happy to sell an 'air-bomb' to a twelve year old who in no way could be taken for 18 - which is the legal minimum age for purchase"

For more on this ITSA press story - see TS Central the site maintained by the Institute of Trading Standards Administration

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New rules for electricity sales

Professor Stephen Littlechild, Director General of Electricity Supply has announced a new licence condition which should help protect electricity consumers from misleading or unacceptanle sales and marketing practices by suppliers or agents.
The main points of the condition are:
  1. suppliers must set up appropriate procedures for selecting and training their own and agents' sales staff
  2. suppliers cannot link up with agents who request payment in advance from customers for arranging a supply of electricity
  3. suppliers must pay compensation to customers who are the victims of marketing malpractice
  4. where a contract has been entered into on the doorstep or over the telephone, suppliers must check within 14 days that the customer is satisfied, or the contract can be cancelled
  5. where a sale takes place two months or more before a customer is due to change supplier, the company must keep the customer informed or progress
  6. suppliers must keep a record of marketing complaints and submit it to OFFER quarterly.
OFFER Press notices can be accessed via the internet at

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Consumer Protection 'A matter of luck'

'Consumer protection has been reduced to a matter of chance; a matter of luck which is largely dependant on where you live. And 90 million causes for complaint are costing UK consumers a cool œ2.5 billion a year'

Paul Galland, current Chairman of the Institute of Trading Standards Administration (ITSA), was reporting on the 'scaling down' of his service that has taken place due to lack of investment in consumer protection and a badly managed local government re-organisation. A shake-up that increased the number of councils and fragmented still further the limited funds and the trained people who are trying to enforce a growing body of legislation, designed to protect the health and the pocket of the public.

Opening the Institute's annual conference in London, Galland called upon central and local government to find new ways of working to stem the tide of consumer complaints currently rising by around 7.5 % a year, and restore the balance in a market place where consumers feel less protected than they used to and find it hard to get access to satisfaction in law.

Whilst praising the Government for being ready to listen and for introducing new measures to tackle long standing problems, he urged Ministers to shake off the attitude that had become second nature in Whitehall in the past; a system where consumer protection laws were introduced with little investment or obvious desire to make them work.

Looking forward to a new era for consumer affairs, he urged central government to provide the resources to match the job. He also said local government should stop treating consumer affairs as a 'Cinderella function'. Out of every pound spent by local government, on average less than a third of a penny goes to fund its Trading Standards responsibilities (1).

'Local government could dramatically increase the amount it puts into the Trading Standards Service by as much as 25% right now - without having any noticeable impact on other responsibilities. An increase that would transform consumer protection and fair trading.'

He told local councils they were risking the loss of yet another of their responsibilities by failing to invest in the service. In a recent poll of Trading Standards Departments, nearly two-thirds reported that their 1998/99 budgets had been cut in real terms, by an average of 5%.

At the same time, three in four local authorities admit they can't meet their target for risk-based inspections. The Audit Commission reports that the average inspection rate of high and medium-risk businesses is 31% against an expected level of 59% and falling (2).

Galland stressed the urgency of Government producing the Strategy for Consumer Affairs that has been talked about for the past year. He hoped the Strategy would co-ordinate the activities of all seven Government Departments that have a hand in consumer affairs and would set out clear priorities and expectations.

The Strategy should give Trading Standards the power to stamp out, once and for all, the persistent rogue traders, cowboy builders, car clockers, home working fraudsters , illegal doorstep salesmen and phoenix companies who continually re-invent themselves to rip off customers.

He also called for better and cheaper access to justice on consumer complaints; a more effective mechanism for dealing with traders who are confused rather than criminals but face the same legal system as hardened crooks; and controls on distance selling scams, including the Internet (3).

Urging local authorities to work together and not try to 'go it alone' he ended by echoing Consumer Minister Nigel Griffiths' words to last year's ITSA Conference:

'No one should be in doubt about the importance of Trading Standards as a strategic service'.

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Product fakers are not Robin Hood!

'Don't believe that by fighting the counterfeiter we are just doing battle on behalf of big companies who can 'well afford it' '.

Introducing a debate at the Institute of Trading Standards Administration 1998 conference on the œ760 million racket in fakes, Ed Chicken (ITSA Lead Officer on counterfeiting) detailed the cost to smaller businesses and the communities they serve.

Every fake bought is money from the pocket of a local trader. He slammed the 'robin hood' idea that counterfeiters provide brand satisfaction at a fraction of the cost - confirmed by a MORI poll that revealed 40% of the public would knowingly buy a fake.

He suspected the figure would drop considerably if the fakes were pharmaceuticals or aircraft parts - but bitter experience shows that even the professionals can be unaware that they are using fake medical equipment!

"Product counterfeiting should be on the political agenda alongside pension mis-selling, cowboy builders, package holiday problems or car clocking - but it is not and the subject does not even feature in the annual returns from the Office of Fair Trading."

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Unsafe products slip through the net

When a company discovers it has supplied dangerous goods, a crisis can rapidly develop. Consumers are at risk and the clock is ticking. Responsible companies will want to let their customers know, protect their reputation and avoid the threat of litigation.

But not all.

Research commissioned by Trading Standards professionals reveals that many unsafe goods are NOT recalled and that some firms struggle to operate safety recalls effectively - simply through lack of guidance.

There are also concerns that global trading is not being matched by global standards of quality, safety and enforcement; with goods deemed unsafe in one country being exported to another market with a more relaxed attitude to safety.

The number of product safety recalls in the UK is increasing every year. Yet there is a lack of consistency on what is being recalled and why. Internationally, there is no single body responsible for monitoring what is happening and communication between regulators is poor. For example, it is easier to find out about recalls in America and Australia than within our European trading partners.

The report offers practical help for companies to prepare an efficient product recall plan.
It calls on the Government to require companies to report unsafe goods - as is the law in the States and Australia and to require companies to recall unsafe goods - as in the case in Sweden, Germany and Finland. It also asks the EC to ban the export of such goods, to develop an international strategy for product safety and to establish an accessible database linked to a fast and efficient 'alarm system' between Member States.

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Babywalker safety

On 24 April 1998, Liverpool Trading Standards released details of ten models of babywalker which failed the British Standard 4648:1989 after tests at accredited test houses. The testing indicated significant safety dangers to babies using these products, although producers have strenuously denied safety problems with their products.

problems are confined to ten models:

  1. Bee Bop Albion with Activity Tray
  2. ABC Design Activity Walker No 997064
  3. Chicco Item No 63098
  4. Brevi Speedy 'Art 554'
  5. Silver Cross Safari
  6. Baby Club New baby Walking Trainer Model T-1074
  7. Mio Bambino/Mio Bambino Marnello
  8. Scallywags
  9. Mamas and Papas Walk'n'Play / Mio Bambino Walk'n'Play
  10. Petite Star Gym Bar or Toy Bar (177 244.97) (Exclusive to Index)
Failures related to labelling and structural failures and the following companies can be contacted direct:
  • Petite Star Products 01923 663344, Replacement labels available from Index
  • Chicco UK 01623 750870
  • Mamas and Papas/Mio Bambino 01484 438292
  • Kooltrade 0161 834 3436, purchasers of Scallywag brans babywalkers can get upgrade components free of charge
Official government statistics estimate that almost 23000 infants were injured and taken to hospital between 1992 and 1996 following accidents involving babywalkers.
17500 involved infants under one year old, although it is not possible to say how many of these were the result of problems such as those identified in the recent testing.

In a press release, Nigel Griffiths, Minister for Consumer Affairs, urged companies supplying babywalkers to ensure they comply fully with UK product safety regulations.
Mr Griffiths said: "Immediate action by manufacturers and retailers is required to restore public confidence in these products.
It is vital that baby walker manufacturers take immediate action to ensure that babies are safe. Liverpool and Caerphilly trading standards departments have raised serious concerns about the safety of a number of babywalkers. I share these concerns. Children who use babywalkers are at a particularly vulnerable age and need to be protected from any risk of injury from them.
All suppliers of babywalkers affected must co-operate fully with the trading standards departments involved in these investigations to ensure that all measures necessary to protect children are taken without delay.
Parents who have bought the models identified in the investigations carried out by trading standards officers must follow the advice provided by the importers and suppliers of those products.
The action which Liverpool and Caerphilly are taking relates to the safety requirements set out in the British Standard for babywalkers. I believe we can further strengthen the safety design requirements for babywalkers.
In the meantime work is underway on a European standard for these products and key DTI safety experts are working to ensure that the resulting standard will result in the highest possible levels of safety."
Neither Liverpool or Caerphilly are calling for a ban on these products.
Mr Griffiths added: "Very many parents find babywalkers useful and I have not received evidence to justify an outright ban on these products."

The safety of babywalkers is controlled by the General Product Safety Regulations 1994 in conjunction with BS 4648:1989.

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New EC Price Indications Directive

This Directive, in the Official Journal of 18 March 1998, concerns the way that price indications are to be given to consumers.
The principle of providing price information to consumers is nothing new and was established in the Community by Directive 79/581/EEC, and implemented in the UK by, amongst other legislation, the Price Marking Order 1991.
However price marking has become complex and this new Directive proposes a simplified mechanism, especially with the imminent introduction of the euro.
The Directive stipulates that there must be an indication of the selling price, and a unit price to consumers, in order to improve consumer information and help the ability of shoppers to make price comparisons. Many UK businesses already make such unit price information available to consumers, ie lager at 23p per 100ml

General Principles
The selling price and unit price shall be indicated for all products offered to consumers, except where the unit price is identical to the selling price.
Member States have some authority to waive the unit price requirements in certain circumstances, or where it would be likely to cause confusion.
Member States may also decide not to apply the requirements where:

  • goods are supplied in the course of a service
  • goods are supplied by auction
For products sold by bulk only the unit price need be indicated.

Display requirements
As is the current UK situation, prices must be unambiguous, easily identifiable and clearly legible. The maximum number of prices to be displayed may be limited in legislation, similar to the current requirements of the Food and Drink on Premises Order

Transitional arrangements
Although arrangements should be in place by 18 March 2000, Member States may allow a transitional period (probably three years) to allow small businesses etc catch up on the requirements of the Directive.
The Directive itself will of course have to be implemented by UK legislation.

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New Consumer Credit proposals

The DTI (Department of Trade and Industry) has just issued a new consultation document entitled 'Clarification and Simplification of United Kingdom Consumer Credit Law'.
The UK already has very strict regulation of Consumer Credit practices but there have been several areas in need of review for some time.

Consultations are taking place on the following main areas:

Advertising of Low Start Mortgages
Mortgage advertising has changed dramatically since the introduction of the Act, and even since the introduction of the Regulations which are proposed to be changed, the Consumer Credit (Advertisements) Regulations 1989 and the Consumer Credit (Total Charge for Credit) Regulations 1980.
The changes would require that for a low start mortgage the APR (annual percentage rate) would have to take account of the likely rate after the low start period had finished.
This may appear common sense but there have been many cases of lenders advertising a ridiculous low start rate, for example 1 percent when they know full well that it is almost impossible for the variable rate to come down to that by the end of the low start period, when the borrower may have to pay around 8 percent. The situation has been further confused as all lenders do not follow the same method.
It is likely that the new proposals will only apply to credit agreements relating to house purchases or improvements as the EU Directive on Consumer Credit stipulates that for the calculation of the APR it must be assumed that interest and other charges remain fixed until the end of the period. The Directive does not apply to house purchase or improvement agreements.

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'Wealth' warnings on advertising
Under the Consumer Credit (Advertisements) Regulations 1989 advertisements must convey a 'fair and reasonably comprehensive indication of the nature of the credit or hire facilities offered by the advertiser and of their true cost to persons using them'.
The 'wealth' warning which must appear on adverts in the intermediate and full categories 'Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it' has been argued to be a disincentive to advertising, and unnecessary as self regulation is enough to ensure consumer protection. For example by advertisements being subject to the Code of Advertising Practice.
The DTI believe that a distinction should be made between transient and non-transient advertising. Radio TV and cinema being transient while advertising in a magazine or newspaper is non-transient and warning notices should remain in the latter.
It is estimated that there is a current annual loss of income from radio advertising of £13M due to the current warning requirements.

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Warnings on equity release schemes
Equity release schemes are designed for people who have significant equity in their homes and wish to release some as cash. Often these will be elderly people who take out a fixed interest mortgage using the proceeds to buy an annuity providing a guarenteed level of income for life.
Some lenders have argued that the statutory warning about 'your home being at risk if payments are not kept up...' is not needed as the home cannot be repossessed under most of these schemes.
The DTI has proposed that a new warning be included for regular income based schemes, for example: 'Will this plan meet your needs if you do not go on living in your home'.
Views are sought by the DTI on this proposal.

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Exemption of short term hire agreements
Consumer hire agreements which are capable of lasting for more than three months are presently regulated by the Act.
Companies hiring tools for a few days have argued that the rules should not apply to them as the hirer usually pays for the number of days used and there is no penalty for early or late return.
Other examples include:

  • Hire of gas cylinders
  • Car rental
  • Dress hire
The DTI proposes to exclude short term hire in which the cost is set on the basis of a flat fee for periods of up to a week with no penalty for early or late return.

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Enforcement of unsigned mail order agreements
Typically these sorts of agreement are where consumers buy goods from catalogues or home shopping schemes which offer deferred payment schemes.
Although it might seem unlikely, many of these arrangements will probably be regulated consumer credit agreements under the Consumer Credit Act 1974, and as such are only enforceable if they are signed by both parties and contain all relevant terms.
There are obvious problems here as many sales are made by agents over the telephone, and many are to friends or neighbours so it is difficult to always ensure agreements are properly executed. Mail order companies are therefore seeking an exemption from the regulations in that agreements can be enforced without having to be signed by the borrower.
The DTI has no strong view on this matter and is seeking opinion.

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Exemption of low cost agreements
Article 4 of the Consumer Credit (Exempt Agreements) Order 1989 exempts loans from the requirements of the Act where the rate of interest does not exceed the higher of:
The highest of the major UK bank base rates plus 1 percent
or 13 percent

The criteria against which loans are exempted has not altered, however reductions in the prevailing interest rate so that bank rates are now down to under 8 percent, has enabled some commercial lenders to use the 13 percent figure to deprive consumers of the protection of the Act.

The proposal is to delete the reference to 13 percent and leave the ceiling as the highest of the UK bank base rates plus 1 percent, and that the loans are not generally available to the public.

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Copies of the consultation document can be obtained from:
Keith Evans
Consumer Affairs and Competition Policy Directorate 2d
DTI 4N16
1 Victoria Street
London SW1H 0ET
Tel ++44 171 215 0354

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Enforcement of the Unfair Contract Terms Regulations

The DTI (Department of Trade and Industry) has recently issued a consultation paper about future enforcement of the Unfair Terms in Consumer Contracts Regulations 1994, which at the moment can only be enforced by the Director General of Fair Trading.
The Regulations have come in for some criticism over the past few years because of the difficulty of localised enforcement, and the burden of work placed on the OFT.

The DTI proposes that organisations should be allowed to act under the Regulations if they meet any of the following criteria:

  1. Any body or office holder with a statutory duty to protect or act in the interests of consumers either in general terms or in relation to a specific sector of industry, for example the Director General of Telecommunications oftel.
  2. Any body with a statutory duty to enforce consumer protection legislation, for example local authority trading standards departments.
  3. Any non-governmental public executive body with a purpose of function of representing the interests of consumers either in general terms or in relation to a specific sector of industry, for example utilities' consumer councils.
  4. Any charity, corporate or private body which can show:
    • a legal personality
    • a constitution to act in the interests of consumers
    • evidence of acting in the interests of consumers
    • it is non party political
    • that if it has a trading arm the profits are used primarily to fund its work of acting in the interests of consumers
    • that where it is involved in a particular sector, any action will be directed in that sector
The DTI also feels that courts will have a major role to play in deciding on the legitimacy of any organisation which might wish to bring an action under the regulations.

Responses to the consultation paper should be received by 28 March 1998, contact Peter Deft at the DTI.

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Non-Status lending - OFT Guidelines

Although mortgage lending is not subject to regulation under the Financial Services Act 1986, a licence is required under the Consumer Credit Act 1974, to engage in a credit or ancillary credit business.
The majority of lenders involved in secured lending to non-status borrowers are licensed under the Consumer Credit Act to enable them to also enter into regulated agreements (less than £15,000 at present).
Their fitness to hold a licence may therefore be brought into question by evidence of unfair trading practices, even where these arise in the non-status market.

The Office of Fair Trading has a duty under the Consumer Credit Act 1974 to satisfy itself that applicants are fit to hold a licence, and have issued guidance on the sort of business practice that should be avoided if their fitness was not to be brought into question.

There are a number of general principles underlying the guidelines, for example:

  • Transparency in all dealings with potential and actual borrowers
  • No high pressure selling, and adequate time for the borrower to consider the terms and conditions of the contract
  • No misleading advertising, nor cold calling or canvassing without the borrowers consent
  • Full disclosure of the brokers status to the borrower along with fees payable
  • Lenders should take all reasonable steps to check on their brokers conduct
  • Contract terms and conditions should be fair and in plain English
  • There should be responsible lending, taking into account the borrowers ability to pay
  • Ancillary charges should be brought to the attention of the borower before the contract is entered into

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Putting Consumers in the Driving Seat

More consumers complain about bad experiences buying second hand cars than any other goods or services. An OFT report has concluded that the answer does not lie in self- regulation, and calls for changes to current consumer protection legislation. But buyers still need to be wary, and the OFT is leading a new campaign to help them make sound buying decisions.

While not all used-car dealers model their business practices on Arthur Daley's, the £34 billion-a-year sector provides more than its fair share of complaints notified to the OFT.
The tale of one unsuspecting Berkshire man, who paid £2,600 for a car worth only £25 as scrap, shows how easy it is for consumers to be duped. The car, a Metro, was advertised as 'in good condition' by a private seller. By the time the customer got it home, the engine was leaking oil. Berkshire trading standards officers, who took up his complaint, discovered it had been in a smash and was unroadworthy. They also found that the previous owner was in fact a trader posing as a private seller.
The need to stop such tricks of the trade provided the impetus for an OFT investigation of the sector and a subsequent report, Selling Second-hand Cars, recommends a range of new measures to clean up the used-car market.

The investigation team carried out a consultation exercise between December 1996 aned March 1997. The OFT distributed over 600 copies of the consulation document and received 62 responses. Respondents included local authority trading standards departments, the AA, RAC, trade associations and consumer organisations. The OFT also commissioned a survey of consumers to assess the problems and the information needed when buying a used car.
Key findings include:

  • three in five adults have bought a used car at least once.
  • people are most likely to worry about hidden mechanical faults. Only one in 20 was aware of the risk of an outstanding HP loan on the car.
  • almost half of those buying from a dealer could not say if it belonged to a trade association.
  • only one in four buyers had the car independently inspected; only one in five sought an independent check on the car's history or the seller.
  • six out of seven had no guidance on buying a car before their purchase: there was a strong demand for such information, particularly among women and young children.
The OFT has identified four main problems encountered on the garage forecourt:
  • Clocking Every 1,000 miles on the clock is £30 in the seller's pocket. It is estimated that dealers cheat buyers out of £100 million a year in this way.
  • Problems with ownership Over a third of the 500,000 cars stolen in 1996 were not recovered: some will end up on the second-hand market. If the car is stolen, the police can return it to its original owner. And if a car is subject to an HP agreement that has not been paid off, then the seller probably has no right to sell it - though if it is bought in good faith, then the consumer will normally be able to keep it.
  • Safety Cars involved in accidents may be inadequately repaired and returned to the road. Sometimes two damaged cars are welded together to create a new one, known as a 'cut and shut'. In fact, up to 28,000 unsafe cars are put back on sale every year. These have already been condemned as unroadworthy and buyers are risking not just their own lives, but those of their families and other road users.
  • Mechanical condition Over half the complaints about second-hand cars relate to hidden mechanical faults, even though the law states that cars bought from dealers must be of satisfactory quality.
For a copy of the OFT's report Selling Second-hand Cars call 0870 6060 321, for more details visit the Office of Fair Trading website at

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Survey of UK Consumer Concerns

As part of National Consumer Week in November ITSA, the professional Institute of Trading Standards officers nationwide, invited people to tell their local officers about the consumer issues which really concerned them. The Institute promised to bring the concerns to the attention of Nigel Griffiths, the Consumer Affairs Minister.

Of the 9,528 letters and calls which were received during the week, well over a quarter were about major household appliances, and 8 out of 10 of these concerned non-delivery or non-completion of services.
A long way back in second place (8.8 percent) were general complaints about selling techniques, misleading claims and other unfair trading practices. People complained about the selling of financial services, the ease with which it is possible to incur debt, and the intrusive growth of telephone selling and junk mail.
In third place was secondhand cars, the old favourite, with 7.4 percent, the majority of problems involving defective vehicles or sub-standard servicing.

An immediate action plan has been presented to the Minister to address these consumer concerns, involving:

  • Amending section 14 of the Trade Descriptions Act 1968 to force traders to keep their promises on services as well as goods, by making offences of strict liability
  • Amending Part III of the Fair Trading Act 1973 to prevent rogue traders from continuing to con the public while hiding behind long drawn out appeals procedures.
  • Reaching an accord with EU neighbours to control internet trading and distance selling from countries outside UK law
  • Backing consumer education throughout life - starting in schools
  • Making the provision of consumer advice by local authorities a statutory obligation rather than a voluntary activity
  • Government creating a new vision on consumer affairs - one which will make a real impact on the 90 million causes for complaint in the UK every year
Nigel Griffiths has responded by praising Trading Standards Officers as the 'front line' in the battle to obtain satisfaction for the individual and the honest trader. He has promised to report in person and in detail on the action he proposes to take, to ITSA members during their annual conference on 23-25 June this year at London's QEII Centre.

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Fair air fare???

The ASA (Advertising Standards Authority) has announced a change in the way air fares should be advertised from the new year.
At present flights are advertised ex-tax and a substantial amount has to be added to reflect airport departure tax, especially for US destinations. A family of four could pay up to 170ukp for flights to Florida.

This brings flight prices into line with most other goods and services, with the price advertised being the actual price that must be paid. LACOTS and Trading Standards Officers have long been in favour of such a move although any truly misleading pricing could always have been caught by the Consumer Protection Act 1987.

LACOTS have been heavily involved in discussions with the travel industry and regulators regarding the exclusion of non-optional charges from airfare pricing. LACOTS view is that to avoid any possible misleading price indication an all inclusive price should be given.

Recent monitoring of advertisements (11/1/98) indicate that most if not all advertisers are complying with these new requirements.

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Laser pointers

Both ITSA (Institute of Trading Standards Administration)
and Consumer Affairs Minister Nigel Griffiths, have called for a ban on the sale of laser pointers to the general public, following several well publicised incidents when people were injured by the lasers being shone at their eyes.
The devices are available quite cheaply, especially in some foreign holiday resorts and are popular with children, causing in some cases problems for teachers in schools.

The products generally resemble pens or bullets and often come with a keychain. They may also come with several lenses enabling the user to project different messages or shapes instead of a simple dot.

There are five main classes of laser:

  1. Class 1 lasers are inherently safe and can be found on CD players and the like. They can be worked with for many hours without injury
  2. Class 2 lasers are relatively safe but still pose some risk of retinal damage if pointed directly at the eye. You should be protected by normal eye blinking. As an indication of strength however a 1mW class 2 laser is about 100 times more powerful than viewing the sun directly!
  3. Class 3a lasers are more powerful and brighter than class 2
  4. Class 3b lasers are dangerous. Although not powerful to burn the skin, direct viewing will cause damage to the eye.
  5. Class 4 lasers are very dangerous and are powerful enough to burn the skin
The supply of lasers to consumers is controlled by the General Product Safety Regulations 1994, using BS EN 60825-1 1994 as the standard covering classification and labelling.
GPSR requires that consumer products are safe and must carry adequate safety information and warnings
Where laser pointers are found on sale to consumers and they are either wrongly labelled, are of a class not suitable for the general public to use (Class 3a 3b 4), or otherwise do not comply with the standard, then Trading Standards Officers have the power to seize the goods or suspend sales.

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New Firework Safety Regulations

Consumer Affairs Minister Nigel Griffiths announced new regulations which were made last week as part of the governments strengthening of consumer protection law.
The changes to current legislation are to be introduced in two stages, with some provisions coming into force on 15 October and others coming into force on 31 December.

15 October 1997:

  • a ban on the supply to the general public of powerful fireworks and a requirement that all fireworks intended for public use comply with BS 7114
  • a permanent prohibition on the supply of aerial shells, aerial maroons, shells-in-mortar and maroons-in-mortar
  • a ban on the supply to the public of category 3 bangers including flash bangers, Chinese crackers and fireworks with erratic flight
  • the minimum age of persons who can be sold fireworks will be increased to 18
  • a ban on the splitting of retail boxes
31 December 1997
  • a ban on the supply to the public of category 2 bangers
  • a ban on mini rockets
  • a limit on the size of certain fireworks such as Roman candles
  • packets of sparklers will have to carry an additional warning 'not to be given to children under 5 years of age'
  • a requirement that all fireworks not suitable for use by the general public bear a warning to that effect
For more details contact your local authority trading standards department or the DTI on ++171 215 5000

You can check out the new Firework Safety Regulations 1997 at HMSO

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Distance selling Directive

The Distance Selling Directive (Directive 97/7 on the protection of consumers in respect of distance contracts - OJ 1997 L144/19) was adopted by the European Commission on 20 May 1997.

The Directive, which has been talked about since 1990, sets out general principles which have to be adapted to different products or services. It is up to national governments to implement the Directive by national legislation.

Distance contracts are defined as any contract concerning goods or services concluded between a supplier and a consumer under an organised distance sales or service provision, run by the supplier, who for the purpose of the contract makes exclusive use of one or more means of distance communication
Some examples of distance communication might be:

  • Addressed or unaddressed printed matter
  • Press advertising with an order form
  • Catalogue
  • email
  • Radio
  • Fax
  • Telephone
  • Television
For anyone who has been plagued by junk mail or unsolicited telephone calls or faxes trying to sell you double glazing, or similar products, the Directive should be cause for celebration.
Although member states have 3 years in which to introduce national legislation (ie until 4 June 2000) the benefits could be felt sooner by consumers.

The Directive specifies ten pieces of information which the consumer must be told before the conclusion of the contract:

  1. The identity of the supplier, and if payment is required in advance, his address
  2. The main characteristics of the goods or service
  3. The price of the goods or service including all taxes
  4. Delivery costs where appropriate
  5. Arrangements for payment, delivery, or performance
  6. The existence of the right of withdrawal (exceptions)
  7. the cost of using the means of distance communications where it is calculated at other than the usual rate
  8. the period for which the offer price remains valid
  9. Where appropriate the minimum duration of the contract
The Directive does not cover financial services, and there are partial exclusions for various things, for example contracts for the supply of foodstuffs intended for everyday consumption, supplied to the home or workplace of the consumer.

You can view the full text of the Directive at the European Commission Web Site in 8 different languages!!!

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Mock auctions

A widespread consumer con, seen throughout the UK involves one day sales and mock auctions, often run by people who know enough about the law to keep within it, and use consumers' natural desire for a bargain to relieve them of their cash.

To illustrate here is a good example of what can happen, related in a complaint received from a consumer via TSnet.

'I am a Singaporean student studying in the University of Southampton. I wrote this letter to complain about a cheating incident that I met in London.
On 18 Apr 97, my friends and I were walking along Oxford Street towards Tottenham Court Road. We received a pamphlet from a man standing outside The Body Shop at about 1530 hrs. The pamphlet contained discounted prices for electronics goods. An example is a Sony discman, after discount, costing only £10.
Attracted by the cheap offer, we went to the address stated in the pamphlet at 100 Dean Street. We went into the shop and there was a man standing on a platform talking through a microphone. The setting of the shop looks like an auction. This man was promoting the goods display on the "auction table" in front of him. He then went on to tell the prices of the different goods they had. But nobody got to buy the goods yet. Tempted by the discount, many people stayed on to listen to the sales promotion.
Another man then took over. He started giving away free stuff like earphones and cassette tapes. He then continue by saying that we are able to buy a total of 6-7 items for less than £20. He sold some of the items to someone in the audience listening to the sales, who I now think is one of their men. He started to ask the audience to put up their hands if they wanted to buy all the items at the cheap price. He added that if we have £5 pounds, we can buy whatever that he will be offering to us. Believing what the man said, most of the audience paid £5 and got in return a camera that looks cheap in value. Some of the audience left the shop and were scolded by the salesman for leaving the shop for a gay pub.
This man then proceeds to induce confidence in the audience by asking them to wave their cameras on their hand if they wants to buy the items. He said that only those with the camera will get the priviledge to buy the discounted items. He challenged the audience that whoever puts his hand up and offer £50, he will get what is on the salesman's mind. That man got a number of items that cost about £500 in the other shops. I thought that this is one of their trick again.
Everybody started to believe that the man is able to offer the impossible. He gave a lady a free Handycam on top of the stereo which she paid £70 for. Still not knowing the scheme the man is up to, many people paid £70 pounds and hope that they can get a great bargain.
Then this man starts to keep all the items on the auction table and display a stereo hifi, a camera and a pair of watches. He then said that we are able to buy these items with free gifts if we have the camera. He guaranteed to give free gifts if we can pay £70. The price of the goods might cost more than £2000 in other shops. He seems very intimidating. Some people were prevented to leave the shop.
The audience started to pay £70 and hoped that they will get the items they want. Instead, some got the cheap hifi-stereo and other got the cheap camera. The saleman then said that if we can pay £150 for some other items, nobody put up their hands. He then ended the sales.
My friends paid £70 for the hifi-stereo which may cost only £15 in actual case. Many of the audience were tourists. Most of them like us were intimidated by the salesman. Although we were blinded by our greediness, I would not want others to fall into the trap. I hope that you can sent some plain-clothes officers to the shop and listen to their salesmanship.
I cannot believe that this kind of thing can happen in the high street of London.'

Unfortunately these things do happen, not only in London but right across the country. In many cases the con artists will go on a 'tour' of small towns, setting up in hotels or pubs for the day, hoping to rip off as many people as possible before moving on.
In most cases Trading Standards Officers can do nothing about the sales, either because the sellers are staying just within the law, or because officers do not find out about the sales until it is too late.

The best advice is be very wary when buying from someone who is not a permanent trader, if you have a problem with what you have bought it may be very difficult to get any redress later. Always pay by credit card if possible and check prices available for the same goods in local shops, you might find that they are available cheaper!!

Make sure you know exactly what you are buying, and whether there is any warranty if things don't work. Get the name and address of the sellers. Be careful if there is any sort of 'auction' situation, especially where someone seems to get an impossible deal like a video camera for £20, more often than not the buyer will be one of the con men. Don't be afraid just to walk out, and contact your local police or Trading Standards Service if you feel you have been cheated.

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EU Consumer Guarantee Directive

The DTI are currently consulting on a proposed European Commission Directive on the Sale of Consumer Goods and Associated Guarantees. The Directive was first mooted in a EU Green paper of November 1993.
Some of the main issues contained in the draft Directives are:
  • A one year right to reject faulty goods or have them replaced (must be exercised within one month of the defect being detected).
  • A right to a free repair or compensation for defects appearing within two years after delivery.
  • A presumption that defects appearing within six months of purchase were present at the time of delivery.
  • A requirement that information about commercial guarantees should be available before purchase.
If implemented the Directive would affect all manufacturers, importers, wholesalers, retailers of durable and semi-durable products sold to consumers. The DTI estimates a likely compliance cost of £775m per annum.

The EU Council has recently (May 98) adopted a common position on this Directive, providing:

  • specific rights to repair or replacement for up to two years on new goods and one year on secondhand
  • faults occurring in the first six months will be assumed to have been present at purchase
  • manufacturers guarantees will be legally enforceable
  • consumers will have at least two months to complain when a fault appears
  • the consumer will have rights of repair or replacement, or if not practical a pricce reduction or a refund
The Directive now goes to the Parliament for a second reading, and if agreed could be formally adopted in about a years time. Back to the top

Soft drink under the spotlight

Consumer Champion Nigel Griffiths put profit hungry landlords under the spotlight over the New Year for charging more per ml for soft drinks than for beers or cider.
The Minister for Consumer Affairs also said that this practice might deter drivers from buying soft drinks in preference to alcoholic ones. In any event with no duty payable on soft drinks consumers would expect them to be cheaper than beer, especially as customers will often get half a glass of ice instead of liquid!

In a survey done by Dundee Trading Standards Officers, prices for soft drinks were found to be around 75p to 95p for a half pint (including ice) of draft but only 55p to 75p for a can of soft drink in the same premises.
Clearly consumers should ask for a can wherever possible, for quality as well as financial reasons.

Technically publicans can charge any price they like for soft drinks, however that price should be clearly displayed for intending purchasers. Consumers who feel prices are too high should of course object by using their well as their mouths!!

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Minded to Notices to end?

The Health and Safety Executive has confirmed its intention to scrap the universally unpopular 'Minded to Notice' which had to be served by Inspectors before most Health and Safety enforcement action could be taken. The Notice was a central plank in the previous governments business-friendly enforcement drive and more details can be found further down this page within the section on Deregulation.

A survey of Chief Officer opinion on the notice earlier this year revealed that only 10 percent supported it and only 1 percent felt it contributed to health and safety!!

The Health and Safety Commission has confirmed that from 1 April 'Minded to Notices' are no longer to be used.
Instead new good enforcement practice procedures have been issued jointly by the Cabinet Office.

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Cashback purchases

'Buy a colour television and get all your money back in five years'. This is the promise made by companies who operate a scheme called cashback. But it seems too good to be true, after all who can make a profit out of selling goods and then returning the money to the consumer, even though money returned in five years will only be worth a fraction of its present value.

The Office of Fair Trading says: 'No-one can say for certain whether or not the money will be refunded. There is no evidence that the schemes are not genuine, but consumers should ask themselves and retailers some hard questions before making a decision to buy based on such an offer.'
'Generally the schemes are confusing and can involve four separate businesses. The shop offering the deal normally has a contract with a promoter. This promoter offers a cashback scheme operated by a third party. As part of the contract the shop agrees to pay a percentage of the total cost to the scheme operator. The consumer is given a cheque to cash with the operator, often within a 30 day period, in five years time. A fourth company is often referred to as providing further guarantee of payment.'
'We believe that the companies are relying for their profits on many consumers not redeeming their cheques and on a higher price being paid for the initial purchase.'

The OFT also offers some general advice if you are contemplating buying with one of these schemes:

  • Shop around to see if you can get the goods cheaper in another shop, there may be a hidden cost which is being passed on to the buyer
  • Do you actually want the item of are you buying because of the special deal?
  • Read the terms of the contract very carefully.. ask to see a sample cheque
  • How long do you get to make a claim...will you remember in five years time?..... are the company a well known name?
  • Will you still feel you've got good value from the purchase if you don't get your money back?
  • What redress will be open to you if you don't get your money back
If you have a problem with a cashback scheme the OFT would like to know, contact them at:
Room 208
The Office of Fair Trading
Field House
Breams Buildings
London EC4A 1PR

Or check out the OFTs excellent website

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The Cabinet Office's Deregulation Unit has recently consulted interested parties on the proposed Deregulation (Improvement of Enforcement Procedures) Order 1997, which would be made under the provisions of Section 5 of the Deregulation and Contracting Out Act 1994.
The stated aim is to ensure a more business friendly enforcement regime, following on from the 'minded to' procedures which already apply to some environmental issues, Food Safety and Health and Safety enforcement. The provisions would apply almost across the board in regard to trading standards work, including Weights and Measures, Trade Descriptions, Consumer Safety, Consumer Protection and Prices.
This latest proposal will provide procedures to enable business to know what they are being asked to do in relation to enforcement activity, why they are being asked to do it, and when it has to be completed. The requirements would not of course restrict the enforcement officer's ability to act should there be an immediate danger.

An enforcement officer would need to provide any person against whom enforcement action was considered:

  1. on request, a written statement setting out the legal requirement to take any suggested action and explaining exactly what action must be taken, and why, and by when
  2. a written explanation following immediate enforcement action
  3. a written notice informing that person that he may make representations prior to enforcement action being taken which must be considered by the officer
  4. a written notice regarding any right to appeal
The officer also has a duty to identify any third parties and provide those persons with information also.


In general Trading Standards Officers throughout the country operate business friendly procedures already, and usually only take enforcement action where it is in the interests of the consumer, public safety, or the honest trader. These proposed procedures will do little to change that approach but will add a massive layer of bureaucracy and cost to the enforcement authorities at a time when resources are at an all time low, and legislative duties at a high. In addition traders will be faced with a dilemma over what action if any to take when they receive their share of the added paperwork, and many will take no action what so ever, as has been borne out by experience with the current 'minded to' procedures.
Many trade associations are also sceptical of the proposals and LACOTS recently reported that businessmen prefer to be dealt with by good practice rather than have to complain to Chief Officers.

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Got a complaint?

Speaking at the Institute of Trading Standards Administration's annual conference in Antwerp on 26 June, The Director General of Fair Trading, John Bridgeman, argued that consumers are not currently given enough information to know where best to complain.
The draft Redress Directory, produced by Mintel, is a first step towards producing a comprehensive redress map which will point consumers in dispute to the best places to get their problems resolved.

Mr Bridgeman said:
"Unless consumers know whom they can approach for redress they may be deprived of protection from unfair practices and below standard goods and services. And there will be no incentive for traders to improve their procedures.
By producing a redress map, I aim to help consumers and their advisers to find the most appropriate route to complain. It will also enable me to assess how widely used and independent some of the routes are. Ultimately it will show where improvements are needed and where new methods of redress could be encouraged."

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Anyone for a beer?

The new Minister of Consumer Affairs has announced his full support for MP Dennis Turner's Private Members Bill which will mean that beer and cider drinkers will get a full liquid measure, even for beers that are customarily served with a significant "head" comprising a mixture of gas and liquid.

Section 19 of the Weights and Measures Act 1979 (subsequently consolidated as section 43 of the Weights and Measures Act 1985) provided that the gas contained in the froth should always be disregarded for determining whether the purported quantity had been supplied. No date was ever fixed for section 43 to come into effect, and in fact the last government steadfastly refused to implement the section.
Court decisions subsequently found that, depending on local preferences and the type of beer sold, the foam on top of the liquid in a glass of beer is to be included in the amount purported to be supplied, causing in the main increased profits for breweries and publicans, up to ten percent in many cases.

Mr Griffiths said:
"I have been calling for a change in the law for a very long time and am delighted to give my full support to the Bill."
"Down the years I have received many complaints from consumers and Trading Standards Officers who have frequently reported short measures, in contravention even of the industry's own Guidance Notes."
"When the consumer asks for a pint and is charged for a pint, that is the quantity that he should be served."

For the full text of the DTI press release see here

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OFT used car report

New laws were called for by Office of Fair Trading Director John Bridgeman to clean up the used car sector, which tops the consumer complaints league:
  • 8 million cars are sold each year and one in six buyers has a problem
  • Consumers are cheated out of an estimated 100m pounds per year by odometer 'clockers'
  • About 28,000 unsafe cars go back on the road after accident damage
  • Many of the 500,000 stolen cars are bought by unsuspecting consumers
Most of the 84,000 people who complain about second hand cars to trading standards or consumer advice centres each year are concerned about poor redress for hidden mechanical faults even though the law states that any cars from traders must be of satisfactory quality.

Loopholes in the current law make it difficult to stop secondhand car dealers who cheat rather than trade fairly.

The OFT has released a new consumer advice leaflet and checklist which reminds consumers of the main points to look for when buying a secondhand car, and their rights.
The booklet is available from the OFT, or from any local authority Trading Standards Service.

The reports main recommendations are:

  1. Reform of current legislation, most notably the Fair Trading Act Part III
  2. Mileage adjustment services and disclaimers, should be banned
  3. Forecourt inspections, by Trading Standards Officers should be stepped up
  4. Mileage notification, to DVLA should be mandatory
  5. MOT computerisation, information should be available
  6. Motor database information, should be made available
  7. Database check certifications should be used more often by traders
  8. Consumer education, should be improved.

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Top 10 Christmas cons

Forget the goodwill!...For rogue traders Christmas is a golden opportunity to fleece the public, warns Paul Galland, Chairman of the Institute of Trading Standards Administration, the professional association of the UKs Trading Standards Officers.

To help shoppers avoid the villains ITSA has compiled a list of its top 10 Christmas cons. If you are ripped off over the festive period, or have any other consumer related complaint please contact your local authority Trading Standards Department.

  1. Counterfeit Toys:
    You aren't going to queue overnight at a big store to buy a 'Teletubbie' or 'Spice Girl' doll, so how lucky that you can pick one up in your local market! Chances are though that it is a shoddily made or even dangerous fake....don't disappoint you kids, buy the real thing.
  2. Under age sales
    It's party time, and there are unscrupulous traders who are willing to sell alcohol and cigarettes to youngsters, if you find any traders involved in this illegal practice please contact your local Trading Standards Officers.
  3. Big gift - Major disappointment
    The high tech counterfeiter finds it easy to make a killing at Christmas selling pirated software, videos, dodgy computers done up and sold as new....if it works at all you are lucky. Trading Standards Officers know of at least one victim who bought a beautifully packaged TV...with nothing inside the cabinet!!
  4. Eat Drink and be far from Merry
    Who's going to count their change when the party's in full swing....who's going to notice that the second or third vodka didn't have the same kick?...well enough people notice to bring a procession of dishonest publican to book for watering down spirits or shortchanging customers. Check your change before it's too late!!
  5. Dangerous toys
    Be very careful that the toys you buy your child are safe...heads that come off revealing sharp spikes, lead based paint, small parts a toddler can swallow, bikes that break at the welds...can all cause Xmas danger as well as disappointment.
  6. Private seller...(or dodgy trader?)
    By all means scan the classifieds for bargains, but make sure the vendor really is a private often traders pretend to be private sellers, because that way you won't enjoy the same rights as a purchaser....and the car he's selling 'on behalf of his mother' could be clocked or accident damaged.
  7. Suitcase boutiques
    Street bargain, bar room flogger or boot sale: they're all happy hunting ground for the bloke who wants to do you a favour....Rolex at 20 quid?..Chanel at a fiver? good to be true? bet it is!
  8. Loan sharks
    Hard up parents, desperate to give their kids a Christmas to remember are all fair game for these bullies..interest rates of a thousand percent are not uncommon...given the evidence Trading Standards Officers can put these people where belong over Christmas....behind bars
  9. Arm-length shopping
    For people with limited means, the idea of paying for things by instalments seems a good idea, and worth the slight premium price. Except that come January Trading Standards Officers are faced with people whose hamper or Christmas gift turned up too late...or not at all. Watch out especially if buying over the internet this Christmas
  10. All that glitters should not be sold
    electrically unsafe Xmas tree lights can give a nasty shock or set fire to your home, tree ornaments may break and harm a child, or be swallowed or contain toxic careful when decorating this Christmas
These warnings may seem extreme in some cases but experience shows that hundreds of people will be ripped off, or injured by poor quality gifts over the festive careful what you buy this Christmas.

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Comparative advertising

The Misleading Advertising Directive 84/450/EEC has been amended by Directive 97/55/EC to include comparative advertising, defined as 'any advertising which explicitly or by implication identifies a competitor or goods or services offered by a competitor'.

There are several general rules which must be obeyed before comparative advertising will be allowed:

  • it is not misleading
  • it compares goods or services meeting the same needs or intended for the same purpose
  • it objectively compares one or more material, relevant, verifiable and representative features of those goods and services, which may include price
  • it does not create confusion in the market place between the advertiser and a competitor or between the advertiser's trade marks, trade names, other distinguishing marks, goods or services and those of a competitor
  • it does not discredit or denigrate the trade marks, trade names, other distinguishing marks, goods, services or circumstances of a competitor
  • for products with designation of origin it relates in each case to products with the same designation
  • it does not take unfair advantage of the reputation of a trade mark, trade name or other distinguishing marks of a competitor or of the designation of origin of competing products
  • it does not present goods or services as imitations or replicas of goods or services bearing a protected trade mark or trade name
The Directive will need to be implemented in the UK by changes to the Control of Misleading Advertisements Regulations 1988, and should take effect before April 2000. It is likely that Trading Standards Officers will have the enforcement role.
Recent cases have involved the Dyson vacuum company being sued in Belgium, and in the UK cases have involved the Orange network, and Barclaycard vs Atlanta.

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One of the topics we most often give advice on is Pyramid selling, otherwise known as Multi-Level Marketing or MLM, Network Marketing, and in some instances Homeworking.

What generally happens is that you will be asked to part with a sum of money, in return for which you will receive a book which will tell you how to make a fortune. In actual fact the only person to make a fortune is the person selling the books! Another variation is that all you receive is instructions to try and do the same thing to as many other people as you can, by placing adverts in shop windows and the like, and so the pyramid grows adding profit to the originator. Normally if the chain of selling continues for any length of time there will not be enough people on the planet to support it! You may also see such schemes as addressing envelopes or making lampshades, or computer or mobile phone covers, or car immobilisers...

Have a look at a spammy page I prepared earlier!

The advice is DON'T BOTHER..... you will most likely only waste your time and money.

There are genuine homeworking schemes available but be very careful that you have the skills necessary to carry out the tasks required. Usually you will only receive refunds if you have not used what has been sent to you, and you will only be paid if what you produce is exactly to the specification required.

Is Pyramid selling illegal?

No, but any regulated scheme must comply with part XI of the Fair Trading Act 1973, Pyramid Selling Regulations 1989 (amended 1990), the Trading Schemes Act 1996, and the Trading Schemes Regulations 1997.

Can I make money by recruiting new people?

The people who get in at the start might, but later entrants will find there are too many sellers in the same area. The number of people willing to buy goods does not increase as the number of sellers increases.

Beware of any scheme which:

Asks for money for goods or services before you have signed a contract (this is illegal)
Requires a large investment at the start (£75 is the maximum you should be asked to pay)
Uses promises of rich rewards..especially for recruiting others
Does not show a statutory warning:
  1. Make sure that you understand what is being offered to you.
  2. Do not be misled by claims that high earnings are easily achieved.
  3. It is advisable to take independent legal advice before signing a contract.


Promoters of Pyramid selling schemes must have a written contract with every participant.
If you withdraw within 14 days of joining you are entitled to a full refund of all monies paid

Illegal payments

  1. Payment made in the absence of a written contract
  2. Payment which you are persuaded to make because you are told that you stand to gain from recruiting other people into the scheme
  3. Payment of more than £75 for goods sold to you unless you have been in the scheme for more than 7 days
  4. Payment as security for goods unless the payment is fully refundable when you return the goods in an undamaged condition
  5. Payment for compulsory training schemes or services supplied to you.

There are also proposals to extend these controls to apply to all money circulation schemes. It is likely that local authorities will have enforcement responsibilities. See the Trading Schemes Act 1996 for more details.

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The Consumers Association has attacked many extended warranties on electrical goods as 'overpriced, oversold, and overrated'.
Retailers have until May to sign up to a new code of practice, and if they don't they may be FORCED to display prices. John Bridgeman the new Director General of Fair Trading said that too many customers are still not able to get the price information they need to shop around, and competition in extended warranties is still very low.

A survey carried out by the OFT shows that:

  • Only one third of retail outlets display the price of extended warranties
  • Only 40% have leaflets with price information for customers
  • Most warranties are two, three, or even four times the estimated average repair cost of the equipment over the warranty period

The following improvements are recommended:

  1. More stores should display price information
  2. Take-away leaflets should be available from all outlets
  3. Price information should be included in all leaflets
  4. Sales staff should be trained to be more familiar with the details and prices of manufacturers own extended warranties

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Consumer Credit change to S75

Consumers who buy on credit will continue to be protected by connected lender liability provisions under Section 75 of the Consumer Credit Act 1974.
Section 75 of the Consumer Credit Act 1974 contains the provisions which give the protection of connected lender liability. This occurs when providers of credit and suppliers of goods and services have made arrangements allowing consumers to buy on credit. The creditor may be equally liable with the supplier if there is a breach of contract or misrepresentation by the supplier, in effect providing the consumer with additional rights of redress.

The decision was reached by Consumer Affairs Minister John Taylor following consultation on recommendations for changes to consumer credit law in relation to the provisions on connected lender liability.

For the full DTI press release seehere

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New Contract Terms benefit Consumer

Consumers should be on the look out for 'catch all' terms in contracts which are really designed to protect traders rather than the public according to the Office of Fair Trading.

New Regulations about contracts came into force last year which state that a consumer is not bound by a standard term in a contract with a seller or supplier if that term is unfair.

For the full text of the Office of Fair Trading press release see here.

To get more information and a FAQ list on Consumer Rights in the UK see here.


OFT press release regarding Unfair Contract Terms

The Office of Fair Trading has received 817 complaints since the regs came into force on 1 July 1995. Action was appropriate in two-thirds of these cases.
Widespread and continuing use of unfair contract terms in consumer contracts is a serious problem in the UK. The use of such terms by the double glazing and window-replacement industry is causing particular concern.
John Bridgeman the Director General of Fair Trading said that this industry seemed particularly prone to using contract clauses which sought to reduce the rights and scope for redress of customers. More than 40 double glazing firms are expected to be asked to change or remove unfair terms such as:
Clauses excluding liability for death or personal injury caused by the negligence of the supplier
Clauses that enable a company to evade responsibility for statements and promises by salespeople
Clauses which state that the consumer must comply with technicalities in the small print to have any right to make any claim for compensation for defective goods or workmanship - and act within 7 days of installation
Unequal cancellation rights allowing the supplier to keep deposits
Very wide rights to change what is supplied and to increase prices
A clause letting the company take as long as it likes to supply the product

The OFT is also very disturbed that unfair terms often conflict with the requirements of long standing consumer protection legislation, for example the Unfair Contract Terms Act 1977 and the Consumer Transactions (Restrictions on Statements) Order 1976. Problems often arise when businesses use terms originally designed for inter-company agreements in consumer deals.
Some other recent examples:
In Leeds County Court the Regulations have relieved consumers from the liability to pay an excessive cancellation fee to an estate agency.
In Plymouth County Court an ambiguous contract term as to compensation for late return of a wedding dress was construed in the consumers favour.

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Fireworks banned

As Consumer Affairs Minister Nigel Griffith's first major proposal of the new Labour Government, he has made a welcome move to ban bangers and other dangerous fireworks in a bid to cut down on the rising number of injuries at Bonfire Night celebrations.
In a move which has been predicted by many Trading Standards professionals and indeed on this site, sales of fireworks will also be illegal to persons under 18 years of age, and emergency regulations brought in last December (Fireworks (Safety) Regulations 1996) will be made permanent.

The two-phase crackdown means that some fireworks will be banned before this years celebrations, aerial shells and maroons will still be available to professional firework display organisers while large bangers and erratic fireworks will be outlawed. The increased age restriction will come into effect immediately, and will be enforced by Trading Standards officers.
The second wave of regulations, aimed at banning smaller bangers and mini-rockets will come into effect later on this year.

Although two people died last year through fireworks, the overall firework injury trend for the four week period, October to November, was downward. Below is a summary of injury statistics, compiled by the Consumer Safety Unit of the DTI:

Private party 428 515
Semi-public Display 100 107
Large Public Display 223 207
Street incident 379 534
Indoors 23 30
Other 80 137

Banger 273 316
Rocket 222 212
Air Bomb 82 107
Roman Candle etc 79 86
Sparkler 196 163
Mortar (Chinese) 15 0
Other firework 124 132
Home-made or powder 16 20
Unknown 226 494

No further treatment 373 488
Referred to GP 141 177
Referred to out-patients 463 565
Detained in hospital 58 57
Transferred as in-patient 38 46
Died 2 0
Not known 158 197

AGE GROUP 1996 1995
Over 20 years 438 487
16-20 174 173
13-15 218 292
Under 13 387 533
Not known 16 45
For further details contact:
Christine Hennessy
Consumer Safety Unit
Telephone ++44 171 215 0360

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European grant funding

Ever wondered how you can get access to European money for your small business? Well we would advise you to think twice before signing up with any company or 'grant consultant' who offers to help you gain Euro money for a fee. We have had many enquiries about these companies from local businesses, usually you will have to pay them even though they cannot help you, and the tactics they use to gain business often involve extravagant and worthless claims and promises. It is far better to approach local business support agencies such as Tayside BIAS (Business Information and Advisory Service) who will provide advice free of charge. Alternatively Business Links are a single point of access for all business information and advice, they can advise on a company's eligibility for grant support or point them in the right direction. To find the local Business Link call 0345 567765 at local rates. Ask consultants if they adhere to a code of practice or belong to a trade association before signing up. And try to get proof.

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Champagne Charlies!!!

Punters who had been duping into investing in 'fine' champagnes and whiskies in the hope of fizzy profits had a nasty shock earlier this year when Berkeley Champagne, Tiller Road, London was wound up.
Creditors are estimated to have received only 15 to 20 pence in the pound minus the cost of the liquidation, back on their investment. Stocks of wine held in France by the company appeared not to be specifically identified as belonging to specified persons.

Around 30 companies offering such 'investment' schemes have been under scrutiny by the Serious Fraud Office since February.
The SFO fear that up to 10,000 investors could be facing losses topping 60 million.

The Department of Trade and Industry has also recently closed down several whisky investment schemes, for example a petition was raised in the High Court to wind up in the public interest The Napier Spirit Company Limited following investigations under Section 447 of the Companies Act 1985 (as amended).
The Napier Spirit Company Limited sold newly distilled and semi-mature whisky in casks to the public as an investment opportunity.
Representations made by the Company as to the potential return on, and the marketability of, such investments were untrue.

The moral is clearly, if you enjoy a dram....just drink it!!!!

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Dangerous fake vodka and whisky

Counterfeit scotch whisky and dodgy vodka, both contaminated with industrial alcohol could cause blindness.
The drinks first found in spring 1996 by trading standards officers in West Yorkshire and Edinburgh contain up to 1.4% methyl alcohol; as little as 10ml of methyl alcohol can cause blindness.

Some products found already are a counterfeit version of Royal Game Finest Blended Scotch Whisky, and a vodka called Sojuzplodoimport, Moscow.
The vodka comes in 70cl glass bottles with gold colour screw tops, and a blue and white label.
The spirits are though to sell for £6-£8 a bottle and may be offered in car boot sales and markets as part of 'beer runs' from the continent.

Consumers should be wary of any cheap alcohol they are offered at boot sales or other events, even if the seller says it is genuine. If you come across such alcohol let your local Trading Standards office know.

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