“Consumers in this country believe that they are
well-protected but the reality does not support this view. The
system for enforcing consumer law is fragmented and significantly
underequipped to tackle a whole range of serious consumer
scams.”
Amyas Morse, head of the National
Audit Office, 15 June 2011
Unfair treatment of consumers, ranging from
pressure selling to systematic scams by criminals, is costing
billions of pounds each year – but the system for enforcing
consumer law is not delivering value for money. According to
today’s report by the National Audit Office, the overall scale of
this so-called ‘consumer detriment’, particularly that caused by
doorstep crime, is not being properly evaluated, leading to the
inefficient allocation of resources.
Although much detriment occurs at the regional
and national level, incentives are weighted against a coordinated
approach which goes beyond local areas. While there are no reliable
figures, NAO estimates the cost of detriment which cannot be
tackled at local level is more than £4.8 billion each year.
The governance arrangements for the consumer
law enforcement system are not clear, as demonstrated by the
development of two separate and incompatible databases, one by the
Office of Fair Trading and an alternative by one Trading Standards
region. Central government provides annual funding of £34 million
to tackle crime which crosses the borders between local
authorities, but this is relatively low compared to the scale of
the problem.
While some larger Trading Standards Services
do take on substantial cross-border cases, there is a risk that
projected reductions in resourcing will reduce their willingness to
do so. The Department for Business, Innovation and Skills estimates
that the annual funding for Trading Standards Services will reduce
from its current level of £213 million to about £140 million-£170
million by 2014.
The framework for prioritizing and allocating
cases, introduced by the Office of Fair Trading, is not being
applied as intended. While it has brought consistency in deciding
which types of cases should be resourced and demonstrates learning
between different enforcement agencies, formal structures for
supporting the model are not in place in seven of the eleven
regions, and there is still a lack of clarity over who should be
taking cases forward. As a result, the OFT has been able to take
enforcement action on only two of the 15 cases referred to it in
the last two years.
Publication details:
HC: 1087, 2010-2012
ISBN: 9780102969733