Westcountryman

Lawyer-free consumer compensation plans

By Sophie Borland
Last Updated: 3:23am GMT 26/02/2008

New compensation laws will allow consumers to claim back just a few pounds from rip-off shops and websites without the need of a lawyer.

Under the proposals being considered, customers could be able to claim money back if they fall victim to price-fixing, in which firms collude to keep the price of a product as high as possible.
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Britain is renowned for having some of the highest prices in the world.

Profit margins on many items, such as groceries, are far higher than in many other countries.

Last December, supermarkets including Asda and Sainsbury's were found guilty by the Office of Fair Trading for fixing the price of milk, cheese and butter in a scandal estimated to have cost consumers about £270 million.

The Department for Business, Enterprise and Regulatory Reform, which was set up last July soon after Gordon Brown took office, is now considering new powers to protect the consumer from such offences.

Ministers, under the guidance of the Business Secretary, John Hutton, are also thought to be concerned about the surge in online shopping.

They are drafting laws that would make it easier to claim money back on goods bought on the internet.

The European Commission is also considering new legislation that would apply to all member states.

One clause, which is based on a Danish law, would allow people to get their money back if they could prove they had been ripped off by a firm through price-fixing.

All they would need to do is provide proof of purchase, such as a receipt, to allow them to sue the manufacturer or retailer collectively with other consumers.

Another proposal includes the creation of a new Ombudsman who would oversee the interests of consumers.

People could also be given small "consumer rights cards" for their wallets or purses.

These cards would detail five or six basic rules of protection to which consumers could refer when shopping or trying to get refunds from traders.

Ministers are also said to be keen to make the laws simpler and less contradictory than at present.

For example some rules say that customers have 14 days to return a product, while others say it is just seven.

A spokesman for the Department for Business, Enterprise and Regulatory Reform said: "We think that there is an opportunity to provide better protection in a simpler, less burdensome and more effective way.

"This is what our wide ranging review of consumer law is looking at.

"The internet is transforming the way people shop and is a theme for the review.

"We are working with a range of business, consumer and enforcement bodies to look at whether the new opportunities for internet shopping necessitate changes to the law or the way it is enforced.

"We will ask stakeholders to come forward with evidence to inform the review in the next few weeks."

A spokesman from the National Consumer Council said: "We welcome the Government's review on principle and would be very much in favour of a simpler system.

"Our only concern is that the simplification of consumer rights does not involve a watering down of the current law."

Source: Lawyer-free consumer compensation plans - Telegraph

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It will be interesting to see how this will fit in with the Distance Selling Regulations and the upcoming Unfair Commercial Practices Directive.

Unfair Commercial Practices Directive - BERR

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