“New Year, New fake goods and fraudulent scams”

9th January 2020 Business Crime

January is well known for being a time when the public are on the hunt for an irresistible bargain and email inboxes and letterboxes are flooded with a raft of “January blues deals” and offers which promise to fulfil our goals for the coming year. There is therefore no wonder that the New Year along with “Black Friday” and “Cyber Monday” are renowned for sales of fake and dangerous goods, online frauds and doorstep scams. January is certainly a time when consumer-spending patterns change insofar as bargains become more attractive and consumers purchase items considered to improve day-to-day lives for the upcoming year. In light of this, we consider the latest consumer trends and the potential offences and implications of offences committed under the Consumer Protection from Unfair Trading Regulations 2008 (“The Regulations”).

In addition to the rise of “January deals”, it has recently been reported by Trading Standards officers, who investigate allegations of crime against consumers, that modern slavery is increasingly being used by Organised Crime Groups to carry out ‘doorstop’ sales. The Chair of National Trading Standards warned that the individual ‘doorstep scammer’ who appears to offer a “cut price service” may often be a serious criminal and carrying out crimes as part of a much wider network. In this context, the warning that consumers must be vigilant in their pursuant of a January deal is more important than ever.  

As well as January being a time for bargain hunting it is often a time that the average household reviews their expenditure and plans for the year ahead. Customers are warned that “rogue traders” will frequently follow emerging consumer trends and therefore conduct scams that mirror these habits. The Consumer Harm Report published by Trading Standards revealed an emerging threat of health and diet supplement scams which often involve unproven or untested products. As the “January diet culture” booms there will undoubtedly be huge increases in this industry, from both legitimate and illegitimate companies.

A further example of January spending habits might be an increase in households seeking to cut down on energy bills and to generate renewable energy in a bid to be “green”. In turn, this may result in fraudulent sales relating to solar energy and insulation and fraudulent utility deals increasing. In November of last year Trading Standards launched an initiative “Utilities Against Scams” in which utility companies including gas, electricity and water companies were trained to identified scams and potential victims of fraud. With a reported £130 million of losses to consumers and business during 2019 it is likely that similar Trading Standards schemes and initiatives to investigate and uncover fraud will continue during 2020.

In summary, the prevalence of rouge traders and deals that are too good to be true are increasing, in particular those committed by sophisticated criminal groups as opposed to a one-off tradesman. In such circumstances, consideration of the behaviour of an individual trader and business that could amount to a criminal offence is essential and is governed by the Consumer Protection from Unfair Trading Regulations 2008. As set out below, the Regulations are broad in scope and cover a range of commercial practices.

Under the “Regulations”, a trader is guilty of an offence if they carry out a misleading action or omission, which is likely to cause the average consumer to take a transaction decision that they would not have taken otherwise. This can include statements regarding the characteristics of a product, the existence of a price advantage (for example a “one of January deal”), the origin of the product or the results to be expected from use of the product. A trader may also commit an offence under the Regulations owing to their “aggressive commercial practices” which may include persistent, threatening and abusive behaviour. The Regulations also set out under Schedule 1 a list of 31 commercial practices, which are in all circumstances considered unfair. This includes practices that may be all too familiar to consumers, including making inaccurate information about personal safety if a product is not purchased, ignoring requests to leave a consumer’s home or persistent and unwanted telephone calls.

The potential offences under the Regulations which can amount to criminal offences are surprisingly common and could result in traders and businesses becoming embroiled in criminal proceedings. The consequences are severe and can include substantial fines and prison sentences for those found guilty of offences. Although the prospect of a quick January bargain is attractive, both consumers and traders must be vigilant and prudent to ensure that they do not fall foul or victim of the Regulations.  

If you are arrested or charged in connection with offences under the Consumer Protection from Unfair Trading Regulations 2008 or Fraud Act 2006, robust legal representation from the earliest stage is essential. JMW Solicitors Business Crime and Regulation team are ranked Tier 1 for Fraud in both Chambers and Partners and Legal 500. For further information about the comprehensive service our lawyers can offer if you are concerned about an arrest or proceedings in respect of consumer law, the authors of this blog, Catherine O’Rourke can be contacted on 0845 872 6666 and enquiries@jmw.co.uk

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Catherine O'Rourke is a Solicitor located in Manchester in our Business Crime & Regulation department

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