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Enhanced consumer protection proposed

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05/11/2012
New proposals would allow the courts to better protect consumers when their rights are breached.

Proposals include giving courts the option of making a business designate an appointed person who will look at how well that business complies with consumer law. 

Another option could include introducing a clear complaints-handling scheme so customers know exactly who to contact for help when they have a problem.

Other proposals will make it easier for consumers to find out which businesses they can trust and which they cannot.

Jo Swinson, consumer affairs minister, said: “Too often consumers are short changed as the result of criminal prosecutions under consumer law: currently a business is condemned and fined, but nothing is done to repay the money lost by the customer.

“Instead, customers are forced to foot the bill for costly and time consuming legal action to get their money back.

“When consumers, especially vulnerable consumers, have been wronged they should be able to have free access to justice quickly and simply.

“With these proposals, when a business has infringed your rights as a consumer the court will make sure they reverse the damage and give consumers their money back.

“This will put the balance back in the system, and give consumers more power to exercise their choices confidently.”

At present when a business breaks a consumer law, the customer can go to an enforcer for help.

The enforcer will take forward the complaint on their behalf, seeking a criminal prosecution or an injunction order in the civil courts which stops the conduct in question.

However, the individual will not necessarily see any positive action by the business or gain any benefits for themselves as a result.

Under new proposals, where a consumer has lost a sum of money due to a business breaking consumer law, whether it is through overpayment or being mis-sold something, consumers would get that money back.

The aim of the proposals is to make businesses address the cause of the consumer’s complaint, meaning they cannot simply make a superficial change to solve an individual problem.

 

Examples of how these changes could work are:
• if a company was found to have overcharged all its customers for the guarantees it sold with a washing machine, that company could be asked to write to all its customers informing them of their right to a sum of money if they send back a tear-off slip within a certain time.

• after a company mis-sold insurance with its coffee machines and ignored complaints, as well as fixing the individual problem it will have to make sure it changes its sales and complaints policy so that other customers don’t get the same problem.

Mike O’Connor, chief executive of Consumer Focus, said: “‘For many years a legitimate criticism of our enforcement regime is that it fails to link effective enforcement with consumers getting their money back.

“So today’s proposals to make it easier for consumers to get redress and compensation when they are treating badly by a company, are very welcome.

“However, we would also like to see it made easier for Trading Standards and other enforcement agencies to deal directly with companies to agree compensation, without always being obliged to go through the formalities of court action.”

The consultation closes on 31 December 2012.

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