Small companies losing sales to rogue traders

New research released last week shows that many small companies believe their profits are affected by rivals using unfair sales practices.

A Department for Business, Enterprise and Regulatory Reform study found that:
 

• 53% of small business leaders think their profits are hit by rivals using unfair sales practices
• Of those who feel their profits are affected, one in 10 estimate rogues are costing them more than a fifth of their revenue and 38% believe they are costing them between 10-20%
• 20% of small business leaders have worked in an organisation that they felt used such practices, with 12% actively encouraged or trained by a previous employer to deploy questionable tactics to make a sale

If passed by Parliament, The CPRs will apply to all businesses that trade directly with consumers - from hoteliers and builders to retailers and second hand motor traders. They will ban 31 types of unfair sales practices outright including bogus 'closing down' sales, prize draw scams and aggressive doorstep selling. They will also, for the first time, establish a catch-all duty not to trade unfairly, closing loopholes that rogue traders have previously been able to exploit.

For more information on how the new Consumer Protection from Unfair Trading Regulations will affect small businesses, visit http://www.businesslink.gov.uk/unfairtrading.

Consumer Affairs Minister Gareth Thomas, said:

"Honest traders understand the value of treating customers fairly and they've had enough of losing profit to rivals using underhand tactics to get ahead.

"The Consumer Protection Regulations will deliver better protection for consumers, cut red tape and put in place a simpler and clearer consumer law that will be easier to interpret and enforce."

John Wright, Chairman of the Federation of Small Businesses, said:

"I welcome this new law. Legitimate businesses should no longer have to face unfair competition from firms who use underhand tactics to get ahead. These regulations will create a level playing field for all, allowing businesses to thrive based on merit and not on who is best at duping or pressuring consumers."

Trading Standards and the OFT will enforce the new law. A wide range of sanctions will be available to them, depending on the seriousness of the offence, from guidance and codes of conduct to unlimited fines and lengthy prison sentences.