back to menuThe determination of the Government to do something about excessive pricing, particularly when the UK is compared with other European countries, and the Office of Fair Trading's response to its new powers to investigate business practices, and do something about them, have been welcomed by consumer organisations.
Perhaps not such good news is the suggestion that it will be made easier for failed businessmen to restart rapidly in business again. We hope that this will not provide a loophole for rogue businessmen who exploit consumers. Just how much benefit we will get from the "radical" reforms of the Common Agricultural Policy we can only wait and see, particularly now that all the EU Commissioners have resigned!
"I am now writing to you concerning those consumers who, because their circumstances place them on the margins of the consumer credit market, are forced to enter into agreements that may be regarded as extortionate existing legislation does not offer satisfactory protection to these consumers." So writes the Director General of Fair Trading to Kim Howells, the Consumer Minister. He suggests implementing the changes in the law recommended in the Unjust Credit Transactions report of 1991. A maximum rate for credit transactions was recently rejected: it is thought that this rate might become the norm in too many cases. There have been reports of loans at APRs over 1,000%. The remedy is through the courts but there is little evidence of cases being heard, partly because there is no legal definition of extortionate credit. The Money Advice Association wants to see regulation of the door-to-door lending market by a system of licensing such as that in the Republic of Ireland, which would incorporate a system of interest rate ceilings.
Most of the views of NfCG on the first consultation on Price Indications in February 1998 have been included in the present suggestions for implementation of the EU Directive. Prices must be unambiguous, easily identifiable and clearly legible to a person with normal eyesight. This reverses the High Court judgement of Allen v. Redbridge London Borough Council where a price label on the base of an item in a locked cabinet was adjudged to be sufficient. The selling price must be the final price, and unit prices must be indicated where appropriate.
NfCG can see no reason for excluding antiques and works of art from price marking, despite the suggestion that this would be an invitation to thieves to steal the most expensive items. However, if the suggestion is taken up, we suggest that items under, say, £250 should not be excluded.
Snacks such as potato crisps in multi-packs will have to be unit-priced, so we are pressing for identical ,individually wrapped chocolate biscuits and cakes, themselves under 25g (and so exempted), to be included when they are sold in multi-packs.
The most controversial suggestion is for the exclusion of small shops and itinerant traders. What is the size for a small shop, and is a licensed cart kept on the same site, mobile?
Would you recognise the difference between a "lowest price guarantee" and a claim that "lowest prices are guaranteed" when you saw them in a shop? The Advertising Standards Authority says that to offer "lowest prices guaranteed" an advertiser must be able to offer consumers the lowest price, which would be difficult for them to prove and would need rigorous research. A "lowest price guarantee" should be qualified with a price promise that the advertiser will beat, not just match, a competitor's price and must clearly set out any conditions that apply. The ASA has also imposed a two-year pre-vetting penalty for any firm that adopts shock tactics for its posters which abuse the ASA's rules, and then relies on getting free press coverage of the controversy caused.
We must give praise to a firm that has adopted a practice long championed by NfCG in a continued campaign. Ideal Home Mail Order states on its order form: "Your money is held in a secure Trust Account on your behalf - we have no access to these funds until your goods have been despatched to you". If only we could get more firms to agree to this method of trading.
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