OFT launches 'scambusters' team

175/05 22 September 2005

The OFT today announced the launch of its new 'scambusters' team to target the most prevalent and harmful mass-marketing scams aimed at UK consumers.

The team has been formed as part of the OFT's commitment to targeting scams as a priority area for the next three years. It is estimated that UK consumers lose up to Â£1 billion per year to a variety of scams which exploit low-cost, mass-marketing techniques to target recipients. These include bogus prize draws and lotteries, premium-rate prize promotions, psychic mailings and miracle health cures which mislead recipients. The OFT is also launching a new Scams Enforcement Group (SEG) which will bring together law enforcement agencies including trading standards and NCIS (see note 1). The Group will build on existing enforcement co-operation by exchanging information on new scams and best practice and by co-ordinating action.

The new scambusters team will:

continue to target those scams which cause the greatest consumer harm
empower consumers through public awareness
work with postal operators, accommodation address agencies and other service providers to disrupt scammers routes to market.

The team will use the experience gained from previous initiatives to work with other government enforcement agencies, both in the UK and overseas; private organisations and sectoral regulatory bodies such as the Advertising Standards Authority (ASA) and ICSTIS.

The OFT has targeted scams with the intent of reducing the harm suffered by consumers and increasing consumer confidence in legitimate mass marketing to the benefit of fair trading businesses. The OFT has taken action against a number of scams directed at UK consumers within the last few months, often with the co-operation of other enforcement agencies in the UK and abroad (see note 2).

Christine Wade, Director of Consumer Regulation Enforcement, said:

'Scams are big business. The OFT's new team will target deceptive schemes that exploit consumer vulnerabilities to con people out of their money. Tackling scams is a priority for the OFT and we are determined to protect consumers and fair dealing businesses.'

NOTES

1. The current members of the Scams Enforcement Group are: regional Trading Standards representatives (represented by Bristol, Kingston upon Thames, Suffolk, North Yorks, Carmarthenshire, East Dunbartonshire, West Sussex and Northern Ireland (DETINI)), The Local Authorities Coordinators of Regulatory Services (LACORS), Gaming Board for Great Britain, Royal Canadian Mounted Police, Department of Trade & Industry Companies Investigation Branch, Independent Committee for the Supervision of Standards of Telephone Information Services (ICSTIS), National Criminal Intelligence Service (NCIS), Advertising Standards Authority (ASA), and Ofcom.

2. The following are three examples of action the OFT has taken:

The OFT has obtained undertakings from a number of traders who sent out misleading unsolicited prize draw mailings to entice people to phone a premium rate number. In one such case over 190,000 people called the premium rate number.
A number of overseas traders have provided the OFT with undertakings. The traders were involved in sending out misleading mailings to UK residents notifying them of a large prize win in order to induce them to buy goods or services.
The OFT obtained undertakings from a number of promoters of online matrix schemes which promised people the chance of getting gifts such as mobile phones in return for purchasing a low value product. The nature of the schemes meant that most people would not receive their gifts.

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