Appendix D Letter from the Trading Standards
Division of Wirral Borough Council to the Committee Specialist
Proposal for the Regulatory Reform (Unsolicited
Goods and Services Act 1971) (Directory Entries and Demands for
Payment) Order 2004
I write in response to your request for information
from local authorities concerning the proposals to reform the
Unsolicited Goods and Services Act 1971.
I note the committee's concerns that, whilst there
appears to have been only one prosecution (I am aware that colleagues
in St Helens unsuccessfully prosecuted in the 1990's) that those
deceptive practices which are made illegal in the 1971 Act have
by no means disappeared.
I would argue that these deceptive practices have
not only not disappeared but have proliferated and, rather than
be focused on the mis-selling of 'directories', is now transposed
to the sale of 'charitable publications'.
My evidence is as follows:
Wirral acts as originating authority for a number
of traders who by means of unsolicited telephone calls seek to
sell advertising space in publications (such as diaries, wall
planners and calendars) to small businesses by means of a clever
play on works either implying that they have charitable or emergency
service approval or make a contribution to a charity or an Emergency
Service social fund. These phone calls are often received by
junior members of staff who may not have the authority to consent
to publication or, if they do consent, do not understand to what
they have consented. The business (and it is almost exclusively
a small business) then receives an invoice and prompt requests
for payment which soon escalate into threats of legal action.
Whilst there may be no legal basis for such threats a proportion
of companies will either pay on the basis of the initial misleading
statements or to avoid the risk of legal action.
In the recent case of Supporting Links Alliance Ltd
heard at the High Court, Chancery Division on the 19th
March, [2004] EWHC523 (ch) (In the matter of the Insolvency Act
1986) the Vice Chancellor considered an application by the Secretary
of State that Supporting Link Alliance Ltd be wound up in the
public interest. The company were selling advertising space by
means of unsolicited phone calls in wall planners etc.
One of the grounds alleging that it was just and
equitable that the company should be wound up was its failure
to comply with S 3(1) a to (c) of the Unsolicited Goods and Services
Act 1971.
At paragraphs 19 - 20 of the Judgement the Vice Chancellor
said:
19. The application of those provisions depends on
each of the annual Guides being a "directory" within
the meaning of that word as used in that Act. I have been referred
to the Oxford English Dictionary, Compact and New Shorter Editions.
I take the ordinary meaning from the New Shorter Oxford Dictionary
as being
"a book containing an alphabetical or classified
list of the people in some category, e.g. telephone subscribers
or clergy, with information about them."
I have also been referred to passages in Hansard
for 4th December 1970 when what became the 1971 Act
had its second reading. They do not suggest that the word "directory"
was intended to have any meaning other than its normal meaning.
Accordingly, as so often, reference to Hansard takes the matter
no further.
20. In my judgement the word "directory"
must be given its normal meaning. So defined it is clear that
the Annual Guides produced by the Company were not directories.
The editorial content is not a list of people or things at all.
The advertisements are just that. They contain details of the
advertisers, including addresses and telephone numbers, but they
are not listed by reference to any category or in any order, alphabetical
or otherwise. If these Annual Guides are directories then so
are most newspapers and magazines. For these reasons I dismiss
this ground as wrong in law.
At paragraph 55 of the Judgement the Vice chancellor
referred to another petition to wind a company up in the public
interest re Bamford Publishers Ltd (2nd June 1977)
which you may find of interest.
The full judgement for Supporting Link Alliance Ltd
can be found at:
www.courtservice.gov.uk/judgementsfiles/j2397/supportinglink.htn
I would suggest that the measures to control deceptive
statements in relation to directories have been successful, bearing
in mind the narrow statutory definition of 'directory' and has
lead to a reduction in an early 1970s mischief.
However this success has caused the same deceptive
practices to be used to mis-sell advertising space in wall-planners
etc without any provision for the protection afforded by the Unsolicited
Goods and Services Acts.
Whilst not a subject considered by the Regulatory
Reform Committee I would point out that the Act does not contain
any enforcement powers to allow effective enforcement.
I hope you find this information of assistance and
do not hesitate to contact me if I can be of any further help.
9 July 2004
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