Baroness King of Bow
Main Page: Baroness King of Bow (Labour - Life peer)Consumer Rights Bill
Baroness King of Bow Excerpts
Baroness King of Bow
“( ) Where the service provided is for an additional assistance service, a reasonable price will be one which is judged by reference to the guidance set out by the original provider of the service who has approved the provision of such an additional service including specifying a range of costs for its provision which can be considered reasonable.
( ) An “additional assistance” service for the purposes of this Act is any service assisting a consumer to use the original service that does not alter the original service provider’s intent in operating this service.”
Baroness King of Bow
My Lords, Amendments 50C and 56A both seek to ensure that the final provider of services approves any website offering services through them. This area is the digital equivalent of the cowboy mechanic charging people left, right, and centre for services they do not need. We know it is important to take action on copycat websites: the question is, how far will we go?
I start by examining how far they go to con consumers out of money. The examples are legion. I shall not detain the Committee for too long, but I will follow the top three copycat websites with a special commendation for con artistry, because I simply could not resist. Here are the top three copycat websites, in reverse order, identified in a poll of 1,750 people for moneysavingexpert.com. These people were all caught or nearly caught by those website scams.
In third place are websites for driving licence applications and renewals. They are supposed to cost £20 but these websites were charging up to £80. In second place are passport applications and renewals. They are supposed to cost £137; people were being charged up to £237. In first place are European health insurance cards. These are free, yet hundreds of people were being charged £25 for a free service.
There is a special commendation for con artistry. This goes to the copycat websites covering tax returns, because they are simply superb at what they do; that is, conning and scamming people. As we know, HMRC provides a free service to all taxpayers, yet the taxreturngateway.com website charges consumers between £150 and £1,000 for processing a self-assessment tax return. The company said this was justified because forms were checked for mistakes, but Which? points out that this is clearly misleading as that is exactly what the HMRC official site does.
You might think that you would have to be a bit of an idiot to pay for a free service; in that case I put myself in the idiot bracket. To be slightly gentler, we might be called idiots/people in a rush. You know how it is: you have a lot of things to do, you go online, and you click on what you believe to be an official site. I did that before I travelled to America. Instead of paying $14 for an ESTA visa I paid $40. Yes, I did feel like an idiot when I realised that I had paid a 300% surcharge simply because I was convinced I was on an official website when I was not.
The important point is that as the Government move to put more public services online, it is incumbent upon them to take all possible measures to prevent public service users and consumers being ripped off on an hourly basis. The Government have taken action on this. It is good news, for instance, that Google have removed misleading sponsored adverts. But at the end of the day it is the Government who need to take responsibility in this area, certainly more than a private company.
This is about consumers being legally scammed and ripped off in a calculated manner. The new single web domain, GOV.UK, is indeed welcome for providing the best way to access government services. But the Government can do more to prevent this problem at source, and this is what the amendments propose. Agencies should be able to detect, for instance, when mass applications are coming from the same IP source, because at that point there is an opportunity to evaluate whether the companies are providing a service that is actually value for money. If they are not, these websites can then be blocked by the agency.
For instance, many noble Lords in this Room will presumably be aware of what TfL has done, for instance. Consumers were regularly being overcharged for the congestion charge by copycat websites, with between £2 and £8 being added to their payment. TfL has now said in a public consultation:
“We are proposing an amendment to the Congestion Charging legislation so that we can refuse to accept Congestion Charge payments which are made by these unofficial websites or other unauthorised third parties which mislead road users into paying a fee in addition to the Congestion Charge. TfL will accept payments from third parties for someone else’s vehicle where there is no charge or commercial gain for making payment on their behalf; for example, payments made by people using car hire vehicles. We are planning to refuse payments from unauthorised third parties from December 2014”.
That is incredibly welcome, but instead of every single provider having to change legislation, why can we not ensure through this legislation that other providers can do the same?
The Transport Select Committee is the latest body to criticise the Government on this, saying:
“It is illegal to deliberately mislead the public or obtain money by fraud; the agencies providing services on behalf of the Government should do everything practicable to prevent users of their services from being misled or becoming the victims of fraud”.
TfL’s work here is a really strong and practical example of why just getting Google to police the internet is not the only thing on which the Government should concentrate. It is not the only practicable action that the Government can take.
Another point is that companies and service providers want to be able to control who sells on their services. We can all understand that—sometimes they may be a good thing. One option to explore is around having approved retailers, and we have that example with the Post Office. The ASA has also taken action on misleading adverts and websites. Can the Minister confirm that it cannot take further action against those websites as they exist at present? What further protections will the Bill give consumers in dealing with that problem, above and beyond what the Government have done to date? Does the Minister see a case for expanding “check and send” style services available in local post offices, where they provide a clear benefit for consumers?
In summary, I recognise that the Government have taken action in this area. Indeed, the letter from the Cabinet Office Minister dated 8 October illuminates the impact of government activity to date, which is a very good thing. But the fact is that clearly more could be done to stop copycat websites at source. That is what these amendments ask for, and that is why I beg to move the amendment.
Lord Harris of Haringey (Lab)
My Lords, I repeat my declaration of interest: I chair National Trading Standards. Its particular relevance to this amendment is that that body funds and supports the work of the National Trading Standards eCrime unit, which has recently taken action that has led to the arrest of a number of people associated with the delivery of copycat websites.
In moving this amendment, my noble friend highlighted the sorts of issues that arise in this regard. The most striking example is that of the European health insurance card, which is provided free. Those who have applied for renewal, as I have recently, will have found it an extremely simple and easy process. The fact that people were persuaded to pay up to £25 demonstrates how easy it was for the scammers behind some of these sites.
It is also clear that this is extremely big business, and there is no doubt that the area is under-reported. My noble friend in moving this amendment admitted her embarrassment in realising that she had been caught in this way. I rather suspect that most of us would feel embarrassed and stupid. Because people do not apply that often for European health insurance cards or passports, they would simply write it off to experience and hope to remember to do it differently in 10 years’ time, or whenever the time came.
The reality is that this area has been under-reported for many years. I am reluctant to comment too much on the arrests that have taken place, or the individuals involved, but I saw an article in the Mail on Sunday, which no doubt checked its legal position, about the scale of the revenues, and so on, that may be involved in this. It is clear to me that we may be talking about tens of millions of pounds, and maybe more, which individual citizens have paid unnecessarily through these copycat websites. The profits for those behind them are no doubt extremely large. So something needs to be done.
Again, my noble friend referred to the recent letter from the Cabinet Office setting out a number of initiatives that should take place, but there are a number of areas where everyone needs to make their contribution. Clearly, we as members of the public need to be better informed, and I am pleased that the National Trading Standards eCrime unit recently produced a public information guide called The Owl and the CopyCat, which was designed to demonstrate to people exactly how they ought to behave, and the dangers of going on copycat websites. So the public have a responsibility.
Secondly, the search engines have a responsibility. It may well be in their commercial interest to accept ads from these dubious websites and to place them at the top of search results, but that is not acceptable, and I am pleased that the Government have sought to persuade the search engines that this is inappropriate.
Thirdly, there is a responsibility on law enforcement and trading standards to investigate and to establish whether offences have been committed in terms of misleading the public.
The fourth area relates to the legitimate websites themselves. This is what the amendments in this group are all about. They will know—they must know—where the money is coming from. They will know if it is being channelled through particular IP addresses. They should take steps to monitor what is happening; they should take steps to intervene. The amendment clearly makes it an offence to charge unreasonably for any services associated with applying for a particular public service: the additional assistance element. The second amendment in the group suggests that the legitimate websites should look at whether the charges are legitimate, appropriate and proportionate to what is required.
I mentioned the European health insurance card. The process for applying for this is extremely simple. It is difficult to see what conceivable value additional assistance could provide as far as that is concerned; you would still have to provide your national insurance number or whatever it is to the copycat website, and that is all you have to enter. I recently had the experience of applying for a Russian visa for my daughter. This is an arduous process at the best of times. It is even more arduous when dealing with the bureaucracy of the Russian state. When I embarked on the process, I found what I assumed were a number of copycat websites. I thought, “No, I won’t be caught like this, I’ll go through the GOV.UK website, which will refer me to the correct Russian visa site and so on”. I embarked on the process and I have to say that at the end of it I would happily have paid somebody fifty quid to deal with the bureaucracies involved.
That is why we should take this back to what is an appropriate and legitimate charge for additional assistance. What the copycat websites are doing is saying somewhere in the small print that they are not the official site but are providing a service. We need to get beyond that and ask, first, whether the service that they are providing is necessary and, secondly, whether the charge that they are making is proportionate to the complexity of what they are providing to the consumer.
These amendments go beyond that to say that it would be entirely possible for the official websites to determine which additional service providers are authorised and to produce a scale of legitimate charges that could be made.
If we are placing an obligation on members of the public to be more vigilant and to carry out their own due diligence, and if we are placing an obligation on the search engine providers to be more vigilant and provide that service, surely it is legitimate to say to the legitimate websites that they should exercise due diligence and provide information and a measure by which we can determine whether any additional assistance provided is worth it. Where it is not, they should not accept payment from those sources.
Baroness Neville-Rolfe
My Lords, I thank the noble Lord for raising that point. I know what is happening in certain areas but not across the board. If I may, I will take the noble Lord’s question away and come back to him. It is also important to publicise better the sort of things that are being done in this area. I have tried to do that in a small way today, as has the noble Baroness, Lady King. For the present, I ask her to withdraw her amendment.
Baroness King of Bow
My Lords, from what the Minister said and in conjunction with the points raised by my noble friend Lord Harris, I think the Government are saying, essentially, that it would be too much work for government departments to approve websites offering additional services. The point I wanted to make—as my noble friend did—is that that does not really make sense, for a couple of reasons. First, the extra work is minimal. Indeed, as my noble friend pointed out, it appears that it is already being done to some extent at the moment. Secondly, that extra work—whatever it may be—is insignificant when compared to the detriment being done to the consumer. That is the point we must consider here.
We also have to take into account all the time currently spent by government departments or other offices answering consumer complaints in this area. For example, the DVLA has received 170 complaints about scam websites since 1 March. The Home Office, in nine months in 2013, received 590 written customer complaints about scam passport sites. As for TfL, it had an extraordinary 1,000 complaints a day. Does not that shed some light on one of the reasons why TfL has been so proactive in this area? Would it not be helpful if Government encouraged other providers to be just as helpful to the consumer?
The other problem with the Government’s approach of leaving it really up to Google to monitor websites is that although Google has agreed to take down some of the adverts and monitor future ones, this requires much more continuous monitoring work than cutting off copycat websites at source. Critically, this approach also inevitably leaves some consumers unprotected for some stretches of time, and therefore undermines consumer rights. As my noble friend Lord Harris made clear, these websites are big business. They make their living by inflicting detriment on the consumer in an entirely parasitic manner. If we are all to play our part, it must include legitimate providers taking the time to say whether a site provides an additional service. That is the purpose of these amendments.
At the start of her speech the noble Baroness said that these sites need to be stopped. I welcome that forthright attitude, but I am sure she will understand my disappointment that it simply is not being followed up with what would be very simple measures.
Baroness Neville-Rolfe
Perhaps I could make one point about the idea of new legislation, which I think is what the noble Baroness is calling for. We are very concerned not to stop legitimate organisations that do provide added-value services related to those provided by government from advertising via search engines. That is an important objective; there are always two sides to these questions. At the same time, as I said earlier so robustly, we want to stop those who make false or misleading claims, who do not provide any added value to users, and who thus understandably frustrate and upset those who, as in the example given by the noble Baroness, choose the wrong sort of website.
The difficulty is that people’s behaviour and expectations with regard to these services are constantly evolving and difficult to predict. That is why we are pursuing the option of supporting search engines in assessing whether a third party that is offering services related to a government website is actually a genuine one which complies with the search engine’s own policies. I think that it would be difficult for us to do this on our own. We have set up the website page www.gov.uk/misleading websites, which I mentioned earlier, and we will monitor the effectiveness of this approach over the coming months. We need to work in this evolving and important area, and I can assure the noble Baroness that we are determined to make a difference.
Baroness King of Bow
The problem I have with the Minister’s response is twofold. First, the legitimate business issues she is talking about would not suffer any problems as a result of the amendments we have put down because they would be providing additional services. Secondly, when the Minister tells us, as she just has in her intervention, that Google is looking at which copycat websites are appropriate and which are not—obviously if they are appropriate, they are not copycat websites, but I am sure the Minister gets my meaning—if we take the example of TfL and the congestion charge, surely TfL is better placed to determine whether a website is providing an additional service or not. Why should the people at Google, clever as they may be, essentially have to do the job that a provider is far better placed to do? I genuinely do not understand the Government’s persistent objections on these points and I would be very grateful if the Minister could pay serious attention to reviewing them. However, until that point, I will withdraw the amendment.
Baroness Neville-Rolfe
Before we finish on this important matter, which I think we both care about a lot, perhaps I may say a few more words. Before we decry the work being done with Google—I think the noble Baroness is asking whether it is sufficient—in the period between November 2013 and June 2014, click-through rates to the official sites improved as a result of work with Google. From November 2013 it was 43% on passports and by June 2014 it was 72%. Obviously there is still a problem, but we are seeing an improvement. Driving licences: 41% in November 2013 and 69% in June 2014, and of course we are now in October. I believe that this is an area where we have to work with the industry. However, I will respond to the point made by the noble Lord, Lord Harris, about how we can link in and identify the third parties in every relevant area. As I say, I will come back to him and to the Committee on that issue.
Baroness King of Bow
I thank the Minister for that intervention. One of the issues comes back to what I have heard the Government say—namely, that they are going to take all practicable measures to deal with this matter. Our point is that these amendments represent very practical measures that could deal with it. I mentioned the letter from the Cabinet Office setting out the impact that the Government’s steps had had, and I welcomed them. The Minister just referred to driving licences and said that the relevant figure had gone up from 41% to 69%— that being the number of consumers coming through legitimate routes as opposed to other routes where they may face surcharges. However, that still leaves approximately a third of consumers uncovered. Given that we are discussing the Consumer Rights Bill, I simply cannot understand why we would not want to strengthen the position of the one-third of consumers and ensure that they have the whip hand rather than the parasites who are out to make money unfairly. Therefore, although I shall withdraw the amendment, I do so with a heavy heart, albeit a hopeful one, because I am sure that the Government will agree that these are fair amendments that would help consumers save money and stop legal scams. I beg leave to withdraw the amendment.
Baroness Wilcox
I shall make only a brief comment because I want to hear what the Minister is going to say. It would be useful to reflect upon the fact that the National Consumer Federation is the only consumer organisation in the country that is not supplied with money from anyone other than its members. It is a small organisation that was set up originally by the National Consumer Council and Which? because they wanted a grassroots response rather than simply remain in their ivory towers writing their great papers. I was the chairman, then my noble friend Lady Oppenheim-Barnes, followed by the noble Lord, Lord Whitty, who took it to greater heights. For a small group like that to have got as many people into this Room as there are at this moment says good things about our country and about our consumer representation. There is always a place for a small group which can get someone like my noble friend Lady Oppenheim-Barnes to take it forward. I am very proud that she has done so.
Baroness King of Bow
My Lords, I support Amendment 51 tabled in the names of the noble Baroness, Lady Oppenheim-Barnes, and my noble friend Lord Whitty. My Amendments 48B and 50G were spoken to last Wednesday, but they were originally grouped with Amendment 51. I know that the Committee is pushed for time, so I will not repeat in detail the arguments that we had around point of sale. Suffice it to say that if consumers do not have clear and transparent information, their consumer rights are effectively undermined. That is the crux of the matter and it is the argument which has been made again now.
This is an amendment essentially to ban smoke and mirrors and to ensure that consumers actually get their rights in practice as well as in theory. The noble Baroness, Lady Oppenheim-Barnes, said how deeply held her feelings are on this matter, and she is quite right. We have to get the basics right. To my mind, this amendment will serve to do just that. Without the basics, consumers will not have their rights safeguarded. For those reasons, we are delighted to support this amendment.
Baroness Jolly
My Lords, as I said when we discussed point of sale information for goods and services in previous sessions, the Government believe that it is really important that consumers should feel confident about exercising their rights. Last Wednesday the noble Baroness, Lady King, reminded us that Martin Lewis from moneysavingexpert.com had stressed the importance of a simple and clear version of our consumer rights when he gave evidence to the BIS Select Committee on the Bill. We agree with him, which is why I am delighted that moneysavingexpert.com is one of the consumer organisations that is working with us on the high-level summary of consumer rights that the Minister and I have mentioned on a number of occasions. This summary covers our rights when we buy goods, services or digital content, and members of the implementation group are working to ensure that it is written in plain English.
In the debates relating to previous amendments concerning the requirement to provide consumer information at the point of sale or at the point of complaint, I set out the Government’s objections to requiring every single business providing goods, services and digital content to set out a consumer’s rights every time they make a purchase. Perhaps I may briefly reiterate. These were, first, that consumers are already faced with a lot of information at the point of sale, and I suspect that most of us are not going to take in information that is not immediately relevant to our purchase decision. Secondly, it is will be particularly irritating to be faced with an oral statement or handed a piece of paper setting out our rights every time we buy a newspaper in the corner shop or arrange by phone to have the dog walked—not to mention the burden this would place on the trader. Thirdly, it could cause significant confusion where the trader’s own policies were more generous than consumers’ statutory rights or where sectoral regulation of services requires specific remedies that the trader must offer.
My noble friend the Minister mentioned the concerns of a major retailer that a requirement to set out a consumer’s basic rights would completely undermine its core message. This was that a customer who is dissatisfied for any reason could bring the product back because it wanted to do what it and the customer thought was right in the circumstances, even if that went beyond what the law would require.
In answer to a point made by the noble Baroness, Lady Oppenheim-Barnes, the British Retail Consortium has said that it would happily join in providing information at the point of sale but does not support the mandatory provision of consumer information for reasons I have given. The BRC, the Federation of Small Businesses and the British Chambers of Commerce all oppose this too.
Fourthly, it would be perplexing for consumers to have to have their attention drawn to their full rights at every point in the complaints process even in circumstances where they have said what they want and the trader has immediately agreed.
On the point made by the noble Lord, Lord Blencathra, on consumers who are sold things over the telephone and have no written follow-up, the consumer has to be given a range of pre-contractual information under the Consumer Contracts Regulations 2013, so a situation in which a consumer does not know they are entering a contract should no longer arise, with effect from 2013. For all these reasons, we do not believe that requiring this information to be given to all consumers before they purchase goods or services or, indeed, afterwards, would achieve the best outcome for consumers or for businesses.