Legal Decent & Honest

Stuart Coverley's a guide to the work of the
NfCG Legislation and Consumer Affairs Committee

Forced sale travel insurance now banned

Further to our story in the last issue of Consumer News, travel agents have now been banned from insisting on customers buying the Travel agent's own insurance. Various techniques have been found for getting round this: making the insurance seemingly 'free', giving the impression that travel insurance is compulsory (easier to take out with the company rather than shop around), inertia selling by automatically adding the insurance charge to the invoice or claiming that customers' alternative policies are 'unsuitable'.

Home-working Scams

It is the minor intellectual dishonesties that can cause the most trouble for those of limited intelligence. There is an under culture of money making schemes based upon sending out letters to a limited list of people, asking for money, your own name being added to the bottom of the list and that at the top being removed. An alternative is the selling of photocopied reports on business techniques and the making of lots of lovely (mythical) lolly. They recommend buying a list of 200 names from one of three firms, the recipients not realising that their correspondence is repeatedly going to the same people.

Other scams are the home-working advertisements that sell kits which, when they are returned completed, are rejected and no payment made. One advertiser claims you can make £19,500 in 3 months if you have the use of an IBM compatible PC. In this case the Office of Fair Trading obtained legal undertakings under the Control of Misleading Advertisements Regulations 1988. Unfortunately too many of these schemes are framed in such a way that they just escape action from trading standards departments and fall under the category of "a fool and his money are easily parted".

Travel Agents

Compared with any previous campaign, NfCG received more media response to its co-operation with the Credit Card Research Group in exposing the practices of travel agents Forced sale adding 1% or 2% to their charges when these are paid by credit card.

It is the big companies who, promoting their own holidays, are the worst offenders. Half of the smaller local agents use the lack of such charges as a selling point with their customers. We would still recommend members to pay at least the deposit by credit card where the total cost is over £100: they are then covered if the company fails to provide the booked holiday. The latest practices are to charge for "information", perhaps repaying the charge if a holiday is subsequently booked.

Packaging for Christmas

It is amazing how much packaging accumulates at Christmas time, it is the most wasteful period of the year, but the new Packaging (Essential Requirements) Regulations 1998, which trading standards departments will enforce from 1st January 1999, could help. The packers, or fillers, of products or the importers are responsible for abiding by the regulations. They must minimise packaging weight and volume whilst ensuring that it remains safe, hygienic and adequately protects the contents. Limits are also laid down for heavy metal concentration in the packaging materials.

Distance Selling

Consultation has taken place regarding the EU Directive. Few aspects of mail order selling are subject to statutory regulation in the UK beyond that applying to the general sale and supply of goods and services. It is proposed that certain information must be given prior to the conclusion of the contract. This includes the identity of the supplier and, where advance payment is required, his (or her) address; the main characteristics of the goods or services; the price including all taxes; and delivery costs, if appropriate. There would be a right of withdrawal from the contract without penalty or giving any reason, for 7 days from receipt of the goods. This would be extended to 3 months if written procedures had not been complied with. Sums paid would have to be returned if there was fraudulent use of a credit card.

In the case of unsolicited goods the absence of a response would not constitute consent to accept. The order must be fulfilled within 30 days from the day following the dispatch of the order, and substitution of goods would only be allowed where this had been clearly stated beforehand. This latter clause has been opposed by NfCG as dangerous because a scam offer could quickly be allowed to run out and inferior goods substituted.

Mock Auctions Act 1961

This act is now 37 years out of date. Those wishing to take action against a trader must prove that competitive bidding has taken place. The usual method is to start at an artificially high price and drop it to the figure the auctioneer desires. Taking action requires plenty of manpower when there is a multitude of sales in an area. North Yorkshire helped to solve the problem by a local Act of Parliament, included within other legislation, which requires traders to register occasional sales at least 21 days in advance. This would be a costly procedure for other local authorities to follow without suitable pending legislation

Credit Unions

A consultation document will look at reforms needed to update legislation which at present limits the growth of Credit Unions. There are now more than 600 of these with assets exceeding £100 million. Previously the banks were opposed to any increase, wishing to prevent loss of their own business, but now the credit unions mainly concentrate on those unable or unwilling to open bank accounts. The Credit Unions are likely to be allowed to borrow money from a wider selection of sources.

Return to Index for current issue                         Return to Main Magazine Index