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British consumers conned out of £7 billion per year

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After reading a parliamentary report released today, I was astonished at figures that show that British consumers are being conned out of nearly £7 billion a year.

The report claimed that consumer law is being abused regionally and nationally, while protection from scams is 'inadequate' as they become increasingly sophisticated as technology advances.

The report was published by the House of Commons Public Accounts Committee, who criticised the current protection for consumers, and said the system has failed to keep up with problems involving online shopping, such as email scams or fraud using chip and pin, credit cards, and other online payment systems.

As a solicitor who specialises in consumer law disputes, I was shocked to learn while reading this report that the Government has proposed plans to abolish the Consumer Focus watchdog and scale down the Office of Fair Trading, in an attempt to cut funds. 

This means that while the level of scams increases, consumers are less likely to have anywhere to turn, to seek help. The Government report states that the changes will still be sufficiently resourced to protect consumers, but I am personally dubious that this will be the case. The Government already plans to make cuts to support via local authority trading standards, Citizens Advice Bureaus, and to Legal Aid, which are sometimes the only other avenue that consumers can pursue.

The report released today estimates that the cost to consumers of defective goods, dodgy doorstep sales and online fraud over the past year was around £6.6 billion, with £4.8 billion of it occurring at a regional or national level. In contrast to this, the Government reportedly spent just £34 million on consumer protection at a regional and national level in 2009/10. This was followed by the closure of the £8 million Department for Business fund, which had been put in place to tackle scams and malpractice regionally.

I know from my experience over the years in assisting consumers with disputes like this that finding avenues to pursue the case can be difficult. The proposed cuts appear to vary depending on regions, and are already beginning to result in a postcode lottery, with some councils employing as few as two trading standards officers, compared to others with 100 or more. There is a risk that this type of regional variation will attract fraudsters to the less enforced areas, where they can then operate with little fear of pursuit.

The report also highlighted that the penalties for scammers are 'often insufficient to provide an adequate disincentive to would-be offenders'. I must agree with this, and in addition have found in practise that enforcement against these scammers can be very difficult, as they are often experienced in hiding their assets.

If you have a consumer dispute, whether that be through a scam as above, or any other kind of dispute, Stephensons have a specialist team of Consumer solicitors who may be able to assist. We have a variety of funding options available to assist you with your case, and we can advise you quickly over the phone as to the most appropriate funding for your case.  You can call our team directly on 01616 966 229.

By consumer law solicitor, Heather Korwin-Szymanowska