Consumers struggle to regain losses from scams

Wednesday, 26 August 2009 12:00

Consumers are facing heavy obstacles in recovering £3.3 billion in losses to illegal trade practices, according to research.

Watchdog Consumer Focus said three in five consumers had been a victim of illegal commercial practices in the past two years in the report, Waiting to be Heard, detailing shoppers' losses to unscrupulous sales tactics.

Further, new consumer protection laws do not allow victims the right to privately seek compensation from unethical businesses in court.

"In spite of new rules banning unfair sales practices, some traders are still doing very well out of unsuspecting consumers," said chief executive of Consumer Focus, Philip Cullum.

He added: "It is a scandal that consumers cannot get justice when they have been wronged."

Tactics used most often were persistent calling, claims of being a "lucky winner" or that the product is absolutely free and pressure to act fast to secure a deal, according to the report.

On average, the customers surveyed had lost £175 to the scams.

"In some cases, they are counting on the fact that if the loss is small, consumers will be less likely to complain or take action, so many carry on misleading," continued Mr Cullum.

Victims of underhanded tactics must claim losses through enforcement agencies such as the Office of Fair Trading (OFT) - the government department created for consumer protection. Or they can approach their local Citizens' Advice Bureau (CAB) to determine next steps.

The OFT has taken a keen interest in helping shoppers to avoid being conned. In February of 2009, they launched Scams Awareness Month to alert vulnerable consumers of common scams.

Regardless of sincere efforts, the laws for recovering funds from unscrupulous businesses are often complex. Victims may find losses irreparable, so supporters of more stringent consumer protection laws continue to be vocal.

"As a point of legal and moral principle, consumers who suffer loss should have the opportunity to obtain compensation in the courts from those who caused it," said London School Economics professor of English law, Hugh Collins.

"The government should rectify this problem."

Consumer Focus, which oversaw the study, ended the report by calling for a Consumer Bill of Rights.

Kelly Gilblom

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