Tackling bogus trading

OFT publishes position paper on legislative options

36/04 4 March 2004

In advance of its market study report on doorstep selling, the OFT has issued a statement on options for tackling bogus trading through new legislation. This is to make its views available before a debate on a private member's bill in Parliament on the subject.
Download the OFT's position paper Legislative options for tackling bogus trading (132 kb).

Bogus trading - where consumers are cold-called by doorstep traders and then tricked or pressurised into paying large sums for very shoddy goods or services - is often associated with property maintenance services such as roofing or tarmacking. It is of particular concern as most consumers affected are elderly and/or vulnerable and it can be linked to distraction burglaries. The OFT estimates that there are in the region of 16,000 bogus trading cases each year reported to Trading Standards Departments, but the real total is likely to be higher. The individual cost to consumers often runs into thousands of pounds.

Both the police and trading standards departments are currently faced with difficulties in taking enforcement action not least in identifying and tracing bogus traders.

The Property Repairs (Prohibition of cold-calling) Bill is scheduled for its second reading on March 12. The OFT has identified four legislative options that could potentially contribute to tightening up the law and tackling bogus trading:

proposed new fraud offence to replace the existing Theft Act deception offence under which some bogus trading prosecutions already take place
fraudulent trading offence which would replicate current provisions for fraudulent trading for companies to cover partnerships and individuals
ban on work and/or payment within 7 days following a cold call, with exceptions, for example when work must be carried out urgently
ban on cold-calling for property maintenance/repairs (not necessarily along the lines of the present private member's bill).

While there are difficulties with both of the possible options for a ban (on work and/or payment within 7 days following a cold call, or on cold calling for property repairs/maintenance), in view of the seriousness of the bogus trader problem they are worth exploring.

The OFT recommends that the relevant government departments proceed to consultation and legislation on the fraud and fraudulent trading offences, and go out to consultation on the two possible options for a ban.
Download the OFT's position paper Legislative options for tackling bogus trading (132 kb).

NOTES

1. The OFT market study into doorstep selling was launched in November 2002 in response to a super-complaint from Citizens Advice (formerly NACAB). See press release 75/02. The report is due to be published in April 2004.

2. Andrew Robathan MP's private member's bill Property Repairs (Prohibition of cold-calling) Bill is down for second reading on 12 March 2004.

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