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Scottish mobility products company undertakes to provide higher standards of consumer protection

158/07    19 November 2007

Two Ayrshire based companies, AppA UK Ltd and AppA Beds Ltd, and their director Graham Hutchinson, have given written undertakings to the OFT that they will not use inappropriate, high pressure or mis-selling tactics in the course of their business, which involves the manufacture and sale of mobility products such as adjustable beds.

Following receipt of complaints from consumers and North Ayrshire Trading Standards Service (NATSS), the OFT issued Minded to Refuse Notices on 12 February 2007 to both companies and Mr Hutchinson in respect of their applications for consumer credit licences. The majority of these complaints related to the use of high pressure selling tactics against vulnerable consumers.

Both companies and Mr Hutchinson subsequently provided written undertakings that in the future they will not use inappropriate and high pressure sales tactics including:

• giving false or misleading information about the true purpose of their visit
• discounting the price on condition that the consumer agrees to a sale the same day
• claiming the AppA bed can alleviate the symptoms of a consumer's medical condition
• dissuading consumers from having a third party present at the sales demonstration, and
• staying longer than two and half hours in a consumer's home when providing a sales demonstration.

They have also undertaken to meet regularly with NATSS to discuss any complaints that have been received about their business.

Ray Hall, Director of Markets and Projects at the OFT, said:

'We do not condone business practices of this kind - particularly when vulnerable consumers are involved. However, we are pleased that the companies have agreed to address our concerns and NATSS and ourselves will be closely monitoring to ensure that the undertakings are adhered to.'

NOTES

1. The Consumer Credit Act 1974 requires most businesses that offer goods or services on credit or lend money or are involved in activities relating to credit or hire to be licensed by the OFT.

2. The OFT can refuse or revoke a licence if it decides that a trader is not fit to hold one.

3. It should be noted that proceedings by the OFT under the Consumer Credit Act are not the same as those of a court and the adjudicator's findings under the Act are not the same as convictions by a court. Therefore, where the adjudicator finds that a provision of the law has been contravened, it does not mean that the person concerned has been convicted under court proceedings of that contravention.

4. Adjudicators issue and determine licensing Notices under the Consumer Credit Act. They do so on behalf of the OFT, but make individual and independent decisions on fitness based upon the contentions in a Notice, the evidence attached to a Notice and the representations of those to whom the Notices are addressed. Representations may be made in writing and at an oral hearing.

5. The adjudicator in these cases gave a favourable determination on the basis that undertakings were provided. Breaches of these undertakings would again call into question the companies' fitness to hold consumer credit licences. A case evidencing any breaches would be put before an adjudicator who would assess the current fitness of the companies at the time of the hearing.

6. The Consumer Credit Public Register is maintained by the OFT. The  register documents traders that hold a licence and any action taken against them. It also details traders that have applied for a licence. Enquiries can be made to Consumer Credit Licensing on 020 7211 8608.

7. The determination was given to the companies on 11 October 2007.

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