Consumers Save £8.5m a Year in Doorstep Sales
Consumers are now saving about £8.5 million a year in doorstep sales upon the recommendations from the Office of Fair Trading to improve cancellation rights, according to an independent evaluation.
The evaluation by GHK Consulting looked at the impact of the OFT’s 2004 market study into doorstep sales, with focus on legitimate rather than ‘rogue’ or ‘bogus’ doorstep traders.
Following the study and OFT recommendations, the government introduced the ‘Cancellation of Contracts Made in a Consumer’s Home or Place of Work etc. Regulations 2008′. The regulations require that any consumer entering a contract following a doorstep sales visit is given written information on both cancellation rights and cooling off periods and extend cancellation rights to cover purchases made following any such visit, whether the consumer has asked for it or not.
The £8.5 million saving represents the value of purchases cancelled by consumers that would not otherwise have been cancelled without the new protections.
Following the study, the OFT also encouraged the industry to improve transparency on prices and to provide written quotes so that consumers have the information they need to make purchasing decisions. This information has been included in the consumer codes of both the Direct Selling Association and British Healthcare Trades Association. The OFT has already approved both codes under its Consumer Codes Approval Scheme (CCAS), and continues to monitor these codes to ensure that members comply with the requirements.
Businesses that are members of the OFT’s Consumer Codes Approval Scheme (CCAS) are required to display the trade body and OFT Approved code logos. The CCAS helps consumers to choose businesses that have promised to provide a high standard of customer service and consumer protection, including access to independent redress in the event that something goes wrong. The OFT recommends that consumers look out for doorstep traders displaying the OFT Approved code logo.
Consumers surveyed for the evaluation said that the ability to cancel unwanted purchases had improved their confidence when buying on the doorstep. This increase in consumer confidence is estimated to have boosted doorstep sales by about £57 million a year.
The report also estimates the total value of doorstep sales in the UK rose to about £4.7 billion in 2010.
However, there are doorstep selling practices that have not shown improvement, particularly the use of high-pressure tactics in sales of home repairs and mobility aids. Common practices cited by consumers include price discounting on the condition that the consumer purchases the product on the same day as the doorstep visit, and an unrealistically high initial price followed by discounting.
In this respect, the OFT supports Trading Standard’s action to clamp down on poor doorstep selling practices, such as the recent successful prosecution in Surrey of Scottish and Southern Energy for misleading potential doorstep customers.
The OFT also ran doorstep sales awareness campaigns in 2011, focused on mobility aids and on raising the awareness of older consumers to misleading sales techniques.
Amelia Fletcher, OFT Chief Economist, said: “This report shows that strengthened cancelation rights and better information have had a positive impact on doorstep sales, but consumers should remain on their guard. High pressure sales tactics are an ongoing problem and consumers should give themselves time to shop around and look for traders displaying an OFT Approved code logo.”