Appendix A Letter from the Committee Specialist
to the Department of Trade and Industry
Proposal for the Regulatory Reform (Unsolicited
Goods and Services Act 1971) (Directory Entries and Demands for
Payment) Order 2004: request for information
Thank you for the presentation which you made on
22 June on the subject of the unsolicited goods and services proposal.
The Committee considered the proposal at its subsequent
meeting and resolved to seek your further comments on a number
of additional points and questions. The issues which concern
the Committee are set out below, under the relevant categories
for consideration in the Regulatory Reform Act and the Committee's
Standing Order.
Whether the proposal has the effect of continuing
any necessary protection as required in Section 3 (1)(a) of the
Regulatory Reform Act 2001 (S.O. No 141(6)(c))
Whether the proposal has been the subject of,
and takes appropriate account of, adequate consultation (S.O.
No. 141(6)(d))
1. The Committee is concerned that the proposal may
reduce burdens on directory publishers and their clients without
adequately protecting businesses from the approaches of rogue
traders. The Committee believes there is evidence of an active
risk from dishonest traders acting as real or pretended directory
publishers, both on the basis of the submission made in response
to the Department's consultation on the proposal by the Office
of Fair Trading and from experience of Members' own constituents.
It is not clear how necessary protection would be maintained
against rogue traders by the proposal, particularly in relation
to the proposal to allow authorization of directory entries on
the telephone where there is payment for that entry in the context
of the call using a credit or debit card.
Q 1 Has the Department given any consideration
to the comparative levels of telephone based deceptions in connection
with the directory publishing industry in other EU member states
and the effect that the various regulatory regimes of member states
may have on the incidence of deceptions of these kinds?
Q 2 Please indicate whether any consideration
was given to permitting contracts for directory entries to be
agreed in the context of face to face discussions between publishers
and advertisers (or their respective representatives and agents),
as permitting the agreement of oral contracts by telephone call
but not in person appears to create an anomaly.
Q 3 Given the concerns expressed by the OFT
and in particular the difficulties likely to arise for advertisers
or enforcing authorities from the absence of any requirement for
a record of the telephone conversation(s), does the Department
consider it might be preferable to protect UK businesses against
telephone-based deceptions by excluding the possibility of instant
payment for proposed directory entries by credit or debit card
in the context of telephone discussions and requiring that payment
may only be sought when written particulars of the directory and
entry have first been supplied to the purchaser in writing?
2. The Committee notes that it is proposed to allow
the simplified repeat/renewal procedure to be used in circumstances
where (amongst other conditions) the form and content of the individual
directory entry and the directory itself are materially the same
as in the previous edition. The 'test of materiality' in the
proposal is satisfied in circumstances where a reasonable person
would consider the earlier and later versions of the directory/entry
as being either the same or the later version an improvement on
the earlier version.
Q 4 Can the Department please provide a more
detailed analysis of how the test of materiality would operate
in practice and whether the effect of the proposed provision would
be to require directory publishers to notify their clients of
all changes in the form and content of directories and of individual
entries in them before repeat/renewed business could be charged
for?
3. It seems to the Committee that, under the proposal,
a publisher could substitute a larger or enhanced directory entry
and impose a correspondingly higher charge for it, on the basis
that a reasonable person would regard this as an improvement.
Q 5 Does the Department consider that the
proposal creates adequate requirements in respect of the notification
of increases in the price of directory entries in such situations,
given that the publisher will not be required to make the amount
of the charge explicit in the ways currently prescribed in the
1971 Act?
4. The Committee notes that the third element of
the Department's proposal will permit publishers to submit invoices
for directory entries with greater freedom as to their form and
content but that, where
authorization procedures as provided elsewhere under the proposal
have not been completed,
invoices must 1) be clear, legible and comprehensible and 2) contain
a statement to the effect that no right to payment is asserted,
displayed in such a manner that makes that statement readily apparent
to a reasonable person reading that invoice. The law would no
longer prescribe that unsolicited invoices and other documents
issued in the relevant circumstances bear either of the statements
"THIS IS NOT A DEMAND FOR PAYMENT. THERE IS NO OBLIGATION
TO PAY" or "THIS IS NOT A BILL".
Q 6 Please explain why it is thought desirable
to remove the requirement that these statements must be included
on invoices not asserting rights to payment, given that they appear
unambiguously to establish the status of those invoices in a way
which is beneficial for those who receive them?
Whether the proposal appears to be incompatible
with any obligation arising from membership of the European Union
(S.O. 141(6)(i))
5. The Committee notes that the consultation period
for proposed further amendments to the 1971 Act to be made by
regulations under section 2(2) of the European Communities Act
1972 in order to ensure compatibility with Article 9 of the E-Commerce
Directive closed on 18 June 2004.
Q 7 Can the Department indicate why it decided
to make this amendment to the 1971 Act by regulations under the
European Communities Act 1972, rather than delaying the laying
before Parliament of the present RRO proposal and (if appropriate)
including this point in the proposal?
Q 8 Can the Department indicate the nature
of the responses received to the consultation exercise and, to
the extent that these have been decided, state its plans for giving
effect to the additional reforms to the 1971 Act it believes are
required to ensure compliance with the E-Commerce Directive?
Other matters arising from the Committee's
consideration of the proposal (S.O. 141(5))
6. The Committee has noted that a number of amendments
have been made to the 1971 Act since its introduction; the current
Regulatory Reform Order proposal would make three further substantial
amendments to the Act and it is also proposed to make a further
amendment to it by regulations under section 2(2) of the European
Communities Act 1972.
Q 9 Given the number of existing and proposed
amendments to the 1971 Act, can the Department indicate whether
it has any plans to consolidate the legislation relating to the
publication of directory entries?
Q 10 Please indicate why the Department considers
there has been a very low level of prosecutions for offences under
the 1971 Act, despite the continued existence of the deceptive
practices prohibited by the 1971 Act?
I would be grateful to receive your response to these
questions, together with any further information which the Department
believes would be helpful to the Committee not later than Friday,
9 July.
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