Cracking down on persistent rogue traders and a ban on unsolicited credit card cheques are included in measures announced in the government's consumer rights white paper
Other measures include:
- A consultation on significant reforms to the regulation of credit and store cards to put consumers more in control of their borrowing and to help guard against people running up credit and store card debts they can't pay off.
- A ban on unsolicited credit card cheques.
- A review by the Office of Fair Trading of the market for high cost credit, typically above 50 per cent APR.
- Appointment of a new consumer advocate responsible for co-ordinating work to educate consumers and to help them get their money back when things go wrong.
- New powers for the courts to ban persistent rogue traders.
MP Response: Jim Cunningham MP
Jim Cunningham MP said: "This is good news for the people of Coventry and shows that the government is backing the British public when it comes to consumer rights.
"We've all experienced being ripped off at some time in our lives – experiences where so often the perpetrator goes unpunished and the consumer uncompensated. It's excellent news that now the Labour government's creation of a consumer advocate means there's a new, powerful independent voice with legal powers on the side of the public in those situations.
"It's also important that those people trapped in debt have support to find a way back to a healthy financial situation.That's why I am pleased Labour has unveiled a support package to give people a helping hand along with a review into expensive credit. This again shows Labour will stand by people throughout this recession unlike the Tories who will let the downturn take its course regardless of the consequences."
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Stakeholder Response: British Retail Consortium
Commenting on the government's announcements on consumer rights, a spokesman for the British Retail Consortium said: "Consumers are the lifeblood of retail. Reputable retailers go well beyond the minimum legal requirements to meet consumer needs and put things right when they go wrong.
"The BRC welcomes the main proposals on consumer protection in the government's consumer white paper - to appoint a consumer advocate who will co-ordinate consumer education and advice; to simplify consumer law to help consumers and businesses to ensure consumers get their rights; to upgrade the Trading Standards Service; and to target internet scams.
"We do not support the business penalty powers but given they are now law the proposal to proceed through 10 pilots is a reasonable way to go. However, the pilot authorities must, as the law states, be certified as acting in full accordance with the Hampton enforcement principles as expressed in the RES Act.
"We can support the appointment of a new consumer advocate to improve consumer education and advice. We hope this is not just gesture politics but a serious substantial proposal. The appointment must lead to a reallocation of responsibilities in government rather than be just another addition to the current confusing range of bodies.
"We would have preferred the advocate to be totally independent of an existing consumer campaigning body (Consumer Focus). This will need to be reconsidered by the government in the future if it legislates to give the Advocate additional powers such as the last resort powers to assist consumers to obtain compensation on a group basis.
"Most consumer problems are sorted out face to face in store but we do think the advocate should have a role in helping consumers access the options already open to them to obtain redress when things go wrong, such as small claims procedures. This could reduce the need in the future for costly new procedures, including the proposals under consideration in the EU for full scale judicial procedures for collective redress. "
Stakeholder Response: Public Fundraising Regulatory Association
Mick Aldridge, chief executive of the Public Fundraising Regulatory Association, said: "The recommendations in the government white paper are all sound ways to offer consumers protection and redress if they are ripped of by businesses or rogue traders.
"There is not a single mention of charities or charity fundraisers throughout the entire white paper, which strongly suggests that new ideas contained in this publication are not intended to combat any kind of major threat from 'rogue fundraisers'.
"However, charity fundraising has often been caught-up in the net of regulatory measures that were intended to curb excessive commercial practices or even criminal activity.
"It happened in the 1990s, when the new telecommunications data protection laws were introduced with the firm aim of combating poor practice in commercial cold calling and swept up telephone fundraising without anyone noticing.
"And it is a live concern with the implementation and enforcement of 'no cold calling zones' by local authorities. These were originally conceived as a crime reduction measure but have rapidly been embraced by some councils as a way to prevent all legitimate doorstep activity in their areas – including, of course, fundraising.
"So we are once again faced with a raft of proposals designed to protect the 'consumer' from excessive or fraudulent business activity, which can all too easily be applied to charity fundraising.
"But there is no 'consumer' in fundraising. There is a 'donor', but the donor does not consume anything that the charity provides, nor does the donor enter into any kind of contract with a charity, because fundraisers are not selling anything and they are not involved in trading activity.
"If enforcement agencies take these new consumer protection measures and apply them to legitimate charity fundraising, then the 'consumer' might conceivably receive some minimal extra protection. But this will be at the expense of the income that charities use to provide essential services to their beneficiaries. The costs to the beneficiaries will far outweigh the benefits to the consumer, which will be neither proportionate nor reasonable. "
