Consumer Rights Bill

Written evidence submitted by Alan Moss (CR 14)

1. I am a Trading Standards officer responding in my personal capacity.

2. I make this submission at a time when Trading Standards are being cut to shreds and serious scale frauds are being allowed to continue. This not even taking into account the ‘minor’ things like incorrect food labelling and dodgy weighing scales going unchallenged – something I see all the time.

3. Therefore I would like to ensure the Bill does not put burdens on struggling Trading Standards – but also makes it easier for consumers to resolve their own disputes. The truth is most Trading Standards departments do not have resources to offer assistance or intervene in disputes. Consumers therefore have to rely of sources of advice such as Citizens Advice – but advice is only advice – it is not the same as intervention by Trading Standards (which may involve looking at documentation and speaking to the trader).

4. I have personally seen many benefits of intervening in disputes – it is surprising how quick some businesses will refund money once they know Trading Standards are looking into their business practices. I have noted it is very common amongst large businesses to suddenly change their tune when they know Trading Standards are involved.

5. Services – ending a contract

6. I feel that the remedy for a faulty service does not go far enough – the consumer should have a way of ending a contract if the service is not being providing properly (a mobile phone contract) – rather than only being entitled to damages – which means they have to stick with the contract regardless. This will need to be tightly controlled as you don’t want consumers making up excuses to get out of contracts but at the same time why should consumers be tied into long contracts when they cannot get the service? In the case of mobile phone contracts it may encourage providers to be more upfront about coverage – which can only be a good thing.

7. Another common one is Cable/Satellite TV or energy – where the service is not being provided due to faulty equipment at the consumers house or a connection problem of some sort. If cancellation is not possible then businesses should be forced to refund for months where no service was provided or even if only half a service was provided. That might encourage businesses to sort out problems quicker than they do now.

8. Services – losing faith

9. At the current time when a service is carried out poorly, the consensus is that the trader should be given a second chance to remedy this so that losses are mitigated. Usually the consumer will have paid up and will need to sue to get the money back or the consumer has not paid and is withholding money.

10. One very common scenario we come across is where the work has been carried out to a very poor and sometimes is even dangerous. In such cases the consumer does not want the trader back. This is understandable as it causes the consumer stress, causes friction between the parties and often delays a resolution.

11. Therefore, if the customer can show the work is so far below the standard required (reasonable care and skill) then they should have the right not to require the trader to come back. The onus would be on the consumer to prove the work was below reasonable skill land care standard should it go to court (to stop consumers using it as a reason to get a 3rd party in when it was not necessary).

12. I feel this will make it far easier to advise consumers to cut their losses when they are in a dispute over very poor quality work.

13. An example might be –a trader has installed a boiler and consumer feels it is dangerous – usually the consumer will not want the trader back. However, they will often be advised they should give the trader a chance to fix things.

14. There should also be a time limit on how quickly a trader has to come back and fix things or lose their right to repair.

15. Business and consumer education

16. When the new Consumer Rights Act comes out there will be a need for a significant amount of education for consumers and businesses.

17. The Department for Business, Innovation and Skills recently brought out The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. The guidance documents for those Regulations are totally inadequate. This means individual Trading Standards Officers have to interpret the law themselves. This had led to inconsistent advice being provided to businesses by individual Trading Standards departments (because there is not one single document everyone can refer to).

18. I believe the new Consumer Rights Act will require significant media publicity which must be backed up by detailed, quality guidance in the form of leaflets, a website and even a DVD presentation.

19. Due to budget cuts many (if not most) Trading Standards are starting to charge for business advice – upwards of £55 per hour. I would be interested to know how we will be providing support to business who cannot afford to pay for it – and in many authorities no staff left to actually deliver it.

20. Government will need to ensure support is provided centrally and free so that all traders are accessing the same information. It will also need to come into before the law does – not at the same time or after.

21. Trading Standards cuts

22. During oral evidence I noted that many MPs raised the question of whether Trading Standards are adequately resourced. I have made the point that we are probably not even adequately resourced to advice on the Act when it comes out.

23. Aside from that, compliance with the law requires enforcement. If businesses complied with the laws on unfair commercial practices (Consumer Protection from Unfair Trading Regulations 2008) then there would be less chance of civil disputes arising under the Consumer Rights Act. Due to cuts to Trading Standards, enforcement of the CPUTR is going down – so disputes under the Consumer Right Act are likely to go up. My departments pro active visit list is almost nonexistent. The most complained about sector is car dealers yet we do no visits to them at all. If we did then we could increase compliance and in the long term reduce civil disputes arising between traders and consumers.

24. It is easy for the Minister to say it is up to local authorities to fund Trading Standards but this is just an attempt to ignore the point – just like it was when the ‘horsemeat scandal’ happened and no one from Government wanted to explain why some Trading Standards were doing very little to ensure high food standards.

25. Finally on this point, I note that the Minister talked about the National Trading Standards Board – helping to co-ordinate the activities of Trading Standards – unfortunately I think that is something of a red herring. The main this NTSB do is provide resources to deal with cross border issues. They have no effect on day to day staffing levels of Trading Standards departments. In addition if there are no Trading Standards staff left to develop cases then there is nothing to pass on to the NTSB to deal with.

26. I also know of a case where a TS dept took 3 months to even fill out the referral form to send to the NTSB because they did not have the resources to get to it.

27. I am not criticising the NTSB but I think we need to be realistic about what they do and don’t do.

28. Finally, on the point of resources I have issues with the requirement to give notice which I deal with below.

29. Enterprise Act – enhanced redress

30. The new rules for enhanced redress are dependent on a successful injunction being obtained under the Enterprise Act 2002 – but it seems to ignore the fact the EA is hardly used. I know of many TS departments that actively avoid using it because they think it is too complex, time consuming, expensive and external legal support is needed to use it.

31. I note that in order to combat the last point it was suggested Trading Standards officers could present cases in court but this idea has been dropped.

32. The new enhanced measures may encourage some Trading Standards to pursue cases where significant redress would have to be made – but by the same token businesses are much less likely to co-operate if they are going to have to pay out large sums of money in redress – which means more formal court action may be necessary. Given that it hardly happens now – is it likely to happen in the future?

33. Court/Ombudsman

34. I noted the discussion around courts and Ombudsman. I think we have two types of disputes – disputes with genuine businesses and disputes with ‘rogues’, who if you took them to court and won, would still not pay. So simplifying the law and making court access won’t really make a difference to those scenarios as the consumer will still be out of pocket.

35. It is also worth considering what an Ombudsman can do to traders who are not interested in complying when the new rules around Ombudsman coming in next year – making a judgement is one thing but if it cannot be enforced why bother? As I understand it most businesses currently subject to ombudsman services are big ‘genuine’ businesses – not very small ones that may be harder to pursue for money.

36. I believe consideration should be given to criminalising those who rack up multiple county court judgements (i.e. many of the same type which they refuse to pay). Or holding company directors personally liable (again where it is obvious they have done something wrong).

37. Company phoenixing is something we see all too often – losing in court means nothing to people who phoenix. It is also an area where significant losses can be incurred by consumers.

38. Point 35 and 36 are complex areas but ones that should be looked at as a lot of consumer detriment is caused by limited liability and the fact that CCJs don’t really act as a deterrent for some.

39. Powers

40. Requirement to give notice

41. It appears that this new requirement will be pushed through regardless but I feel it puts an extra burden on Trading Standards at a time when we are already under pressure. All it will do is reduce the number of routine inspections (which are already falling). I find it odd that in the Government Impact Assessment one of the justifications for this is that routine visits are falling anyway so this won’t much difference. If resources are falling then why add an additional burden?

42. To give you an example – if we wanted to conduct checks on Payday loan companies on the high street to see if they were complying with the relevant legislation we could pick 5 out and then visit them one by one (or do as many in a day as we can).

43. Under the new law we would need to identify who the owner of all 5 shops were and contact them – something that could take up a lot of time.

44. Under the new legislation if we were at one Payday lender shop, we then couldn’t pop over to another we had spotted and do it whilst we were already in the area (but would have to come back after having given notice).

45. I also find it odd that the Minister thinks this well ‘help’ Trading Standards plan their time. I can assure her we don’t waste time at premises and there is no problem to be solved from our perspective. If the business owner is not present we can still conduct a check and talk to them later. The point that seems to be missed is that often you need the element of surprise in these visits. Where we feel we need to talk to the business owner and no surprise is needed we will make an appointment.

46. This new law will means that a lot of stuff that is discovered from unannounced visits will no longer be found if a business can plan ahead.

47. It is unclear how this will apply to markets – do we give notice to the market owner or the individual stalls? In any case it will mean counterfeit goods or unsafe goods are not on sale on the day we visit (often the market owners will inform the stall holders of any visits). As far as markets goes we may suspect fakes are being sold but can we then apply blanket exemptions on giving notice to every stall on a market?

48. Dwellings

49. I know the Government wants to remove all powers from Local Authorities to enter domestic premises without a warrant but I would add these comments.

50. Under the old powers we could enter dwellings if they were being used as a business premise and we suspected an offence.

51. Under the new powers unless we could prove the dwelling was being used mainly as a business premises we cannot enter it. It will be impossible to know if a dwelling is being used mainly as a business premise unless it has been entered.

52. Even then, what is mainly? What if there are 3 bedrooms and 5 occupants but 1 computer which is where the business is run from? We have found people running businesses generating hundreds of thousands in illegal revenue in such dwellings. My understanding though is that such a premise would be mainly being used as a dwelling but with a business being run from there – therefore we could not enter it under the new power.

53. Please bear in mind more and more business are being run from homes over the internet.

54. I believe in my own authority the power to enter a dwelling using statutory powers has not been used routinely by anyone as we usually get a warrant but taking this power away could stop us gathering evidence in the future when we know a business is run from a dwelling and we need to enter quickly.

55. Getting a warrant is fine but it can add weeks of delay and cost.

56. There are 2 scenarios where this (old) power may be used – firstly is when we have been invited into someone’s home and can see it is a business – we can then use the powers if necessary.

57. Second is when the Police arrest someone and use S18 of PACE 1984 powers to search their home. If they enter a dwelling and tell us it is being used as a business - we can enter and use our own powers. This is common with counterfeit goods when the Police arrest someone and then find loads of counterfeit goods in their house.

58. The new powers as drafted would prevent us from doing either of the above because as long as the suspect can say the house is used mainly as a dwelling it doesn’t matter how much counterfeit goods they have inside.

59. I also think businesses using dwelling addresses as mailing addresses should be classed a business premises by default.

60. Use of powers remotely

61. At the moment we receive complaints about businesses all over the country and often I will use my powers to obtain information from said companies.

Schedule 5

62. Section 14 allows information to be requested (remotely) – but it quite clearly does not allow it to be used in criminal proceedings against the person who provides it.

63. Section 23 allows entry on premises and to obtain information/documentation.

64. Therefore if I want to investigate a business 150 miles away it appears that I will now have to visit them to obtain the information using section 23 powers or not bother investigating them. This cannot be right.

65. Observing business

66. Section 22 allows officers to observe businesses (without prior warning or notice) – presumably if they see a breach they can then use their other powers of inspection because they can satisfy one of the exemptions to give notice?

67. So let’s say you are at a supermarket and see pricing errors – can you then talk to the supermarket about pricing? Can you then start carrying out other checks – such as on advertising materials and so on?

68. These powers and powers from other laws

69. How will the Consumer Rights Act powers work with other powers? The Food Safety Act 1990 powers remain and apply to food – Trading Standards also enforce that law.

70. So let’s say you visit a supermarket and check their use bys and then want to check prices – can you? Pricing are not within the scope of the Food Safety Act but they will be for the Consumer Rights Act.

71. Therefore effectively any food premises where you want to do non food stuff may require notice. EU law says food visits should be done without notice (though food officers will make appointments when they need to speak to a certain person). So now either 2 visits will be done or we will have to give notice (which is against EU law/guidance for food visits).

72. Use of powers – prescriptive

73. I am also concerned that the requirements to obtain information are quite prescriptive (s14) – often when we ask for information from a 3rd party not being investigated it will be done verbally or through a simple email – will such evidence in future be questioned if we do not use a formal notice every time? Let’s say we are investigating a rogue trader and we visit a builders merchant and ask if the whether anyone has ordered the materials in question. Most of the time the builders merchant will give us the information with no fuss. So under the new law are we required to give a notice?

74. I am also concerned that the prescriptive requirements to give notice now mean that if we are out and about and notice an infringement we will not be able to use evidence gathering powers as we don’t have the forms. Currently when doing searches and seizures we provide paperwork because of PACE Code B but that code allows the paperwork to be provided later on.

75. Clarity of powers

76. The entire Schedule regarding power is extremely complex and I am not sure it will achieve the aim for businesses to find it easy to understand (unless appropriate guidance is introduced).

77. We have had people like accountants refuse to provide information on the basis of ‘confidentiality’ – it would be good if this could be clarified to say the only reason someone can refuse to provide information is legal privilege. We have also had large businesses refuse to provide information because they have contracts with other businesses – clearly they should provide the information as confidentiality is not a reason to refuse to provide the information.

My final comment is that we need minimum standards (i.e. staff levels) for Trading Standards – this was discussed briefly in the oral evidence session. As alluded to – we have some Trading Standards with 1 or 2 people which is totally unacceptable. Trading Standards should be a minimum size depending on how many consumers or businesses are in a particular area. 197 Trading Standards is far too many departments. There could be a fifth or quarter of that.

February 2014