The CAB service is the largest independent network of free advice centres in Europe, with 430 main bureaux in England, Wales and Northern Ireland. Bureaux provide advice from over 3,300 outlets, including bureaux in the high street, community centres, health settings, courts and prisons. All CABx are registered charities.
The CAB service has twin aims: to ensure that individuals do not suffer through a lack of information about their rights; and equally to exercise a responsible influence on the development of policies and practices, both at a local and national level.
In 2007/08 bureaux in England and Wales advised around 2 million people with new or ongoing problems and dealt with 5.5 million enquiries in total. Of these 130,764 concerned consumer goods and services and a further 95,379 concerned utilities. Doorstep sales are common across both these types of enquiry.
Key issues
- Clause 9 could negate the extension of cancellation rights to solicited sales because consumers may find permission for commencement of specified contracts before the end of the cancellation period has already been written into the paperwork they are asked to sign. We are concerned that consumers may then be easily persuaded that they have signed away their cancellation rights, despite the provisions of clause 8.
- It is unclear whether items such as intruder alarm systems are excepted under point 1 b) of schedule three as it covers contracts for the supply of goods and their incorporation in immovable property.
- Consumers would benefit from a time limit during which a business must repay any outstanding monies already paid by a consumer on cancellation of a contract.
Introduction
Citizens Advice broadly welcomes the Draft Statutory Instrument on The Cancellation of Contracts made in a Consumer’s Home or Place of Work etc. Regulations 2008. This is an issue we have worked on together with Age Concern England, following their 2002 report Sharp Selling Practice1. In 2002 we raised problems in this market with OFT, as a super-complaint, using CAB evidence reports Door to Door2 and The Fuel Picture3. We have lobbied for changes to doorstep selling legislation since 2002 and have been active members of the stakeholder group throughout the various consultations and discussions. We are pleased to see this legislative change finally coming to fruition in October 2008. We believe that the Government has generally taken account of the comments we made in our response to the BERR consultation in April 2008.
We particularly welcome the extension of cancellation rights to solicited doorstep sales. We have called for a cooling off period of fourteen days to allow consumers to reconsider the agreement and to take account of bank holidays that might occur during the cancellation period. We anticipate that the review of EU consumer legislation currently underway is likely to recommend this approach.
Bureaux regularly see clients who would be better protected under the proposed new regulations:
A London CAB reported the case of a client who had been sold a mobile phone contract at the door, on the basis that she would receive a cash back deal that made it affordable. Four weeks later she had a letter saying the salesman had misinformed her about the cash back deal. They agreed to cancel the contract for the phone but her contract with the air time provider had not been cancelled. They were sending bills and using a collection agent to collect the money they claimed was now owed.
A Staffordshire CAB client regretted the purchase of £2,000 of double glazing as soon as the salesman left her home. She found that he had covered over part of the contract that contradicted what he told her, using a piece of paper. She told the CAB that she felt worried that as a level headed person she was so easily persuaded to sign. The bureau called for cancellation rights to extend beyond seven days in such cases.
Cancellation of specified contracts commenced before expiry of the right to cancel (clause 9)
We are deeply concerned that the new legislation potentially allows consumers to inadvertently sign away their cancellation rights by agreeing contracts to go ahead immediately. Clause 9 could create a loophole where permission for commencement of specified contracts before the end of the cancellation period has already been written into the paperwork consumers are asked to sign. We are concerned that consumers may then be easily persuaded that they have signed away their cancellation rights, despite the provisions of clause 8. We would be interested to know what the Government’s view is on this point.
Excepted contracts (schedule 3)
Schedule three includes a list of excepted contracts. It is very clear from points 1 a), 1 b) and 1 c) that the intention is to include contracts that cause concern in the consultation responses. However, we are concerned to ensure that the detail of point 1 b) is intended to include sales of products such as alarm systems or solar panels within the definition of the supply of goods and their incorporation in immovable property. Citizens Advice Bureaux do see clients who have been frightened into buying alarms for their property, which are fitted as rapidly as the following day, leaving virtually no time to reconsider the contract they have entered into. For example:
A 78 year old CAB client from North Yorkshire on a low income was persuaded to part with all his £3,000 savings, in cash, for an alarm system. The initial sales visit was unsolicited. The following day the system was fitted. Since then the same salesman has been calling back trying to persuade the client to buy other home improvements for which he asks for payment in cash. The client sought advice because he found the salesman threatening and had been unable to get help from the police.
Repayment following cancellation
Consumers could potentially benefit from an additional power to the draft SI that ensures there is a time limit during which a business must repay any outstanding monies already paid by a consumer on cancellation of a contract. For example, a period of thirty days is applicable under distance selling regulations. This would ensure both a fair time for business to repay consumers and a time limit after which consumers could reasonably take further action.
For further information contact: Matt Jones, Public Affairs Officer Matt Jones
Social Policy contact: Susan Marks Susan Marks
1. Sharp Selling Practice – March 2002 Age Concern
2. Door to Door – CAB clients’ experience of doorstep selling. September 2002 Citizens Advice
3. Fuel Picture – CAB clients’ experience of dealing with fuel suppliers. June 2002 Citizens Advice
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