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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
Deregulation
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 www.oft.gov.uk, hard copy is available from the OFT's Consumer Credit Licensing Bureau on 020 7211 8626.

For more information see:
http://www.oft.gov.uk/html/rsearch/press-no/pn06-01.htm

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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.

Conclusion
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 http://www.dti.gov.uk/CACP/ca/dsdbulletin.htm.

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. http://www.tpsonline.org.uk
  • 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: http://www.tpsonline.org.uk/html/reg_welcome.htm
  • Addressed Direct Marketing Mail - Mailing Preference Service, Freepost 22, London W1E 7EZ. http://www.dma.org.uk
  • 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 http://www.e-mps.org/en/

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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:http://www.dti.gov.uk/CACP/ca/injdir.htm

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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 www.dti.gov.uk.

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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 tradingstandards.gov.uk for more details and the full press release.

AGE-RESTRICTED GOODS SURVEY ENGLAND & WALES SUMMARY

				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 http://www.lacots.org.uk/mortgageregulation/brokers.htm.

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 http://www.consumer.gov.uk

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 www.consumer.gov 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: http://europa.eu.int

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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 www.oft.gov.uk

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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 instead....you'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 delivery....watch 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 chemicals....be 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 period......be 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.

Update

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 http://www.coi.gov.uk/coi/depts/GER/GER.html

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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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