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LACORS Year Ahead Leadership Conference

Gareth Thomas MP,  Former Minister for Trade, Development and Consumer Affairs (jointly with DFID)
Stratford-upon-Avon,  07 February 2008

Ladies and gentlemen. Thank you

I know from my constituents and from the many people who write to my Department - that as consumers they expect to be treated fairly, expect their voices to be heard by business. And – most importantly - expect the best protection from the rogue traders and criminals who deliberately set out to rip them off.

This is why your role is so vital in safeguarding the health and wealth of the citizens and the economies of our local towns and cities.

I have been struck over the last 6 months in particular my visits to Consumer Direct and Trading Standards departments how little recognition on occasion you get for the quality of the job you do. I hope that I will be able to help to begin to put that right.

I hope too that I can reassure you today that I and colleagues in Government remain committed to giving you the best tools to continue doing your job effectively:- Equipping you with the powers you need to catch the con artists and the fraudsters who can cause so much misery.

I was therefore particularly pleased, that we have, this week, been able to announce the extension of the Scambusters pilots. Giving Trading Standards the opportunity to bid for a share of around £7.5 million extra over the next three years to tackle the toughest scams which blight our communities.

The current pilots have shown some real success in the last two years. The statistics alone are impressive:

• An estimated £16m worth of fraud uncovered
• £2m worth of criminal assets seized
• Around £3m of savings for consumers
• And 165 suspected rogue trader websites shutdown

Many of these cases have hit the headlines:-

• The team in the South East have worked with police to smash a gang of rogue tarmaccers who conned and bullied householders from Devon to Kent.
• And – only last week – thanks to the Midlands team, a surveyor was jailed and his damp proofing business fined thousands of pounds for ripping off a number of elderly people across the area.

So I congratulate you all on your success so far and look forward to receiving bids from other teams across the country.

This will of course be the second major scheme to be rolled out nationally, following the extension of our programme to tackle illegal money lenders.

Building on the work of the teams in Glasgow and Birmingham, which led to a number of loan sharks being taken off the streets and jailed.

We’ve invested £3 million this year to launch more teams in every region of Britain to help some of our most vulnerable citizens, many from deprived communities, and we’ve committed to support this work over the next three years.

There is then, much to celebrate together in this room today.
I am determined to maintain and crucially, enhance a robust and effective consumer and competition regime.

A regime which:

• Gives consumers the knowledge and information to shop confidently at home and overseas

In short, educating consumers so they know their rights, so they know when they are being ripped off, and so they know where to turn for protection.

We have already established Consumer Direct, as the first port of call for consumers wronged by traders. Which received more than 1.5 million calls last year alone.

Other OFT work, including the current Scams Awareness Month , are also helping embed a culture of greater up-front consumer awareness.

But I will be considering what else we can do in this area.

Of course, a successful consumer protection regime is one which also:

• Works with businesses to help them to understand and comply with regulations
• And which equips you - the enforcers - with the powers to come down hard on the worst offenders.

In short, a regime which protects consumers without overburdening compliant businesses. And which works hand in hand with the Better Regulation agenda.

We are setting up the Local Better Regulation Office to help you share this good practice with all sectors of the local regulatory community.

And we have to make sure we have in place the legislation that gives you the real power to act.

On April 6th the new Consumer Protection Regulations will usher in the EU’s Unfair Commercial Practices Directive.

These new rules will help consumers by banning all types of unfair selling and marketing methods. They will help tackle conduct which although unfair is not at the moment illegal.

By this I mean the bullies who exploit the fears of the elderly or the disabled, using underhand tactics such as:

• Selling them products they do not need and do not want.
• Refusing to leave someone’s home when asked.
• And repeatedly harassing customers by phone or e-mail

The new Consumer Protection Regulations contain investigation powers you need to catch the rogues:
Powers modelled on those that exist at present for enforcement of the Trade Descriptions Act.

They include powers to make test purchases, to inspect goods and, under certain circumstances, to enter premises.

And they’ll be enforceable both criminally and through the civil courts to help enable the most appropriate action to be taken in any particular case:-

Be it criminal sanctions should be reserved for the most serious breaches, or the vigorous civil enforcement.

Looking further ahead, this new approach to regulation is part of wider efforts to shape the consumer agenda at an international level.

These days consumer expectations are being driven by new technologies and new methods of trading.

And these innovations in turn provide us with new challenges to deliver the best outcomes for consumers and traders.

The European Commission’s ongoing review of consumer protection legislation gives us a major opportunity to meet these challenges in our globalised economy.

Working with our European partners, we have the chance to develop a once in a generation long-term vision for consumer protection in the UK which is fit for the modern marketplace:-

A vision underpinned by a coherent and consistent framework of consumer legislation in Europe.

The Single Market depends not only on encouraging business to take advantage of new markets, but on confident consumers shopping across the EU with a clear understanding of their core rights - wherever they are, and whatever they buy.

Along with our efforts to influence the Commission, we are also undertaking a major piece of work to review consumer law in the UK.

It means looking at the current regulatory landscape for consumer protection – which is very complex, including dozens of pieces of legislation developed over many years.

We are exploring whether we can simplify to have more impact. Which parts are outdated? We recognise of course that we need to keep necessary protections. In some areas perhaps protection needs to be proved. A simpler to use effective and less burdensome set of protections is what we are pursuing.

The Internet is transforming the way that people can shop. Does our law reflect what is needed?

Is the way we enforce the law right for the Internet age?

And crucially too what about the vulnerable who are left behind in an increasingly credit-based world?
When things go wrong, do the avenues for redress work satisfactorily, particularly for vulnerable groups?

I was struck by the recent report by the National Consumer Council highlighting the problems faced by the poor and the elderly, who feel disadvantaged by new trends like online banking and the lack of face-to-face contact to resolve problems.

To address some of these issues, I hosted a Summit recently with major players on the challenges and opportunities of the Internet.

In addition I have visited Denmark to see their consumer regime in action and have asked officials to explore other countries regimes too for ideas, information and inspiration. I was particularly interested in the Danish experience of collective actions.

But if you’ll forgive me I want the benefit of your experience, you being at the sharp end in helping our citizens as consumers.

We will be in contact formally, shortly:

The Scambusters and illegal money-lending teams have already demonstrated some of the improved outcomes that can be achieved when authorities work together. Indeed, I have seen myself the way in which the trading standards service is delivered in my constituency and the benefits achieved through joining up with neighbouring authorities.

I strongly believe local authorities need to consider now, whether they should share trading standards services – to pool talent info and expertise to build collective capacity to tackle enforcements hot spots.

In the summer I plan to bring people together to explore some of the ideas and initiatives which emerge from both the UK and European reviews.

Watch this space for more details, but I hope you will want to join with us and play your role in shaping the agenda for the future.

In conclusion

We are at a significant moment in the shaping of the UK’s consumer agenda. What we decide in the months ahead will determine how consumers, business and enforcers operate in our dynamic, ever-changing market.

To do that, we need to continue our successful partnership – not just with you in this room today – but with partners across the regulatory environment and across Government.

Thank you again for the work you already do. I look forward to our continued success together as we meet the challenges which lie ahead.