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Cashback
Schemes
Cashback
schemes typically offer consumers the opportunity to reclaim all or
a proportion of the purchase price of goods or services after a set
period of time - generally, five years after the date of purchase.
When
the purchase is made the retailer, who pays the promoter of the
scheme a commission fee (typically about 12.5 percent) on every item
sold, issues the consumer with a cashback cheque which can
subsequently be used to claim the refund from the promoter. To
bolster confidence in the arrangement, customers may be told that an
insurance company underwrites it.
Concern
has been expressed about the commercial viability of such schemes.
The
Office of Fair Trading advises consumers:
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not to be tempted to
make a purchase simply because of the promise that money may be
returned in the future;
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to shop around and
compare prices;
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to read the cashback
contract very carefully; and
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to ask themselves
whether they would still feel they had got value for money if
the price was not refunded.
One
Day Sales and Mock Auctions
These
sales, which are not to be confused with legitimate auctions and
sales, are typically held for one day only in venues such as local
community halls, hotels, and vacant shop premises. Newspaper
advertisements or handbills distributed to homes in the
neighbourhood - usually on the day prior to the sale - offer
ridiculously cheap bargains which they claim arise from bankrupt
stock, stock clearance, warehouse sales etc. and are used to entice
the public to the sales. The sellers are experienced in encouraging
consumers into parting with large sums of money for poor quality or
defective goods. The advertised bargains are rarely, if ever,
available.
Trading
Schemes (Pyramid Selling)
 Please
click the button to read our Fact Sheet on Trading Schemes.
Trading
schemes may be called direct selling, network marketing, pyramid
selling, multi-level marketing, or other names. It is a way of
selling goods or services through a trading scheme which operates on
more than one level. People who join such schemes are self-employed
and earn money by selling the schemes' goods or services. In some
schemes participants may increase their earnings by recruiting
others and from the sales made by their recruits.
Such
schemes are not illegal in the UK but they must comply with the
provisions in Part XI of the Fair Trading Act as amended by the
Trading Scheme Act 1996 and the Trading Scheme Regulations 1997
 DTI
has issued a guidance booklet The
Trading Scheme Guide which outlines these provisions.
 Please
click the button to read the guide on-line.
Please click this 
button to have a printed copy posted to you.
DTI is the enforcement
authority for this legislation. Anyone who is concerned that they
have been asked to join a scheme which may be acting illegally
should write, with any supporting evidence, to:
Consumer
& Competition Policy Directorate 6
Room 426
Department of Trade & Industry
1 Victoria Street
London
SW1H 0ET
Doorstep
Selling
Please
Click the button to read our Fact Sheet on doorstep selling.
The
Consumer Protection (Cancellation of Contracts Concluded Away from
Business Premises) Regulations 1987 provide consumers with a 7 day
cooling off period when they agree to buy goods or services worth
more than £35 from a trader during an unsolicited visit to their
home.
Proposals
to provide consumers with more protection from unscrupulous doorstep
sellers were made in a consultation in 1998. Responses
to the consultation were considered with amending Regulations coming
into force on 31 December 1998.
Consumers' Guide to the amended regulations (web page).
Please
click this
button to have a printed copy of the guide posted to you.
DTI Contact
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