Consumers unable to sue for £3.3 bn lost each year

Underhand sales practices are rife, new research by independent consumer champion Consumer Focus reveals. Three in five consumers said they had fallen victim to traders who had acted illegally in the last two years.

The report, ‘Waiting to be heard', estimates the cost to consumers at £3.3 billion a year. However, new laws introduced to protect consumers from such practices do not give them the right to seek compensation from unscrupulous businesses. Consumer Focus found that four out of five consumers who had experienced underhand sales practices want the right to take businesses to court.

Among the most common sharp practices were consumers being told they were a lucky winner, when in fact they had to pay high phone charges or postage to receive a low value prize. Consumers were also deceived by bogus claims such as ‘absolutely free', ‘offer must end Monday' and ‘closing down sale'. Persistent sales calls leading consumers to buy or sign up to something simply to get rid of the salesman were also found to be another common illegal practice. Consumers were left £175 worse off on average. Although some people suffered no financial loss, the highest loss was £800 or more.

Philip Cullum, Deputy Chief Executive of Consumer Focus, said: ‘In spite of new rules banning unfair sales practices, some traders are still doing very well out of unsuspecting consumers. 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. It is a scandal that consumers cannot get justice when they have been wronged.'

Hugh Collins, Professor of English Law at the London School of Economics, said: ‘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. The Government should rectify this problem'.

Consumer Focus is calling for a change in the law that will allow consumers to sue traders if they fall victim to any of the sharp practices banned by recent legislation. The watchdog is also calling for enforcement agencies such as the Office of Fair Trading to be given the power to seek compensation on behalf of consumers.