TS Review May 2016

T H E T R A D I N G S TA N DA R D S J O U R NA L

May 2016 Issue 6

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T H E T R A D I N G S TA N DA R D S J O U R NA L

Issue 2 // May 2015

T H E T R A D I N G S TA N DA R D S J O U R NA L

May 2015 Issue 2

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17/04/2015 10:54

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EDITORIAL BOARD Our guide to who’s who

jo Barker programme Manager: Product Delivery, BRDO Jo is part of a government team tasked with improving the business experience of being regulated.

Lies, damned lies, and statistics Chris Fay // Editor-in-chief How many hoverboard fires were reported to the Chief Fire Officers Association (CFOA) in the past nine months? Given the recent media frenzy about the issue, you could be forgiven for thinking it was in the hundreds, possibly even the thousands. The answer is in this edition’s infographic – but I’ll tell you now, it’s in

Welcome

Leon Livermore Chief executive, CTSI A er 25 years in local government, Leon joined the Chartered Trading Standards Institute as its chief executive in 2013.

single figures.

When I saw how low the figure was I was stunned and I called the press offices of a few larger fire brigades to check we were not about to make a sara barry head of safer communities, Lincolnshire CC Sara has promoted risk reduction while guiding Lincolnshire Trading Standards Service through major budget cuts.

mistake. It’s the type of quick sense check we often perform before we publish and, while the CFOA is still collecting data, the figure checked out. There was a caveat from one press officer, who quite reasonably added: ‘Not all of the fires will have been reported.’

Now compare this with the Whirlpool issue. Freedom of Information responses from UK fire brigades returned 926 reports of dryer-fires between 2011 and 2013. We don’t know that all of these are Whirlpool machines, but after the company’s boss, Maurizio Pettorino, admitted there had been about 750 reports of ‘product failures’, the two sets of figures make sense.

Melissa Dring Director of Policy, cTSI Melissa works with politicians and civil servants to make sure trading standards’ voice is heard in policy development.

What doesn’t quite tally is the response to the two issues. The bigger hoverboard retailers issued voluntary product recalls in the face of overwhelming media scrutiny, while Whirlpool is advising consumers to keep using its machines. This latter response just doesn’t pass a sense check – and that’s what’s troubling many consumers, journalists and even some in the trading standards community, despite the Primary Authority (PA) advice. The PA carried out a sense check of its own – calling in a neighbouring authority to go over the Whirlpool case – but pitting chronically underfunded trading standards services against troublesome billion-dollar firms makes little sense in the first place.

Dr Louise M Hassan reader in managerial studies, bangor business school Louise’s research interests are international in nature and focus on transformative consumer research.

Perhaps most baffling of all is the government’s lacklustre response to the recommendations in the extremely timely product-recall review, which might have made sense of these issues.

Thanks for reading.

3

EDITORIAL BOARD Editorial enquiries: Carina Bailey // Tel. 0345 608 9468 // Email. tsreview@tsi.org.uk

Illustrations. Paddy Mills

Advertising enquiries: Judith Thurston // Tel. 01268 582221 // Email. advertising@tsi.org.uk

chris fay editor-in-chief

matt allwright columnist

Carina Bailey Editor

Debra nelson ART DIRECTOR

Melissa Dring policy columnist

maeve sinnott junior reporter

TS Review is part of a family of publications published by the Chartered Trading Standards Institute. It is wri en, designed and produced by CPL (Cambridge Publishers Ltd).

Tel. 01223 477411 // www.cpl.co.uk // @CPLCambridge ISSN 2058-3656 See CTSI’s monthly TS Today magazine online at www.tradingstandards.uk/tstoday Download the app: search TS Today at

Christine Heemskerk Independent consultant Christine is a self-employed consultant for the trading standards profession and chair of CTSI Council.

Phil Owen service director (professional standards), CTSI Phil is a commi ed trading standards professional with experience across the private, public and not-for-profit sectors.

Mike Sewell Managing director, CPL Mike is MD of award-winning editorial and design agency CPL, which produces both TS Today and TS Review.

Adrian Simpson food, safety & TS Manager Waltham Forest Council Adrian is CTSI lead officer without portfolio with an academic background in journalism.

About the Chartered Trading Standards Institute: www.tradingstandards.uk // Tel. 01268 582200 1 Sylvan Court, Sylvan Way, Southfields Business Park, Basildon SS15 6TH The opinions expressed in editorial material do not necessarily represent the views of CTSI.

We encourage your feedback. Write to tsreview@tsi.org.uk or comment at CharteredTradingStandardsInstitute

4

@ctsi_uk

Chartered Trading Standards Institute

No, it’s not a printing error... If you are puzzling over the illustration on the spine of your copy of TS Review, let us explain. It’s simply one of a four-part graphic that builds into the full TS Review logo over the course of a year. Stack all four issues together on your bookshelf to create your own library.

/TeamCTSI

Gareth Walters Team Leader, Monmouthshire trading standards service Gareth is trading standards and animal health team leader for Monmouthshire CC. He became a CTSI Fellow in 2013.

17

34

38

Contents May 2016

25-31

6–10

digest Trading standards in the news

t h e t r a d i n g s ta n da r d s j o u r na l

34-37

11

Interview: peter mcveigh ‘The Assassin’ and long-time trading standards supporter talks product safety

abstracts Quotes and stats from TS Today

12-14

analysis Investigatory Powers Bill

17

viewpoint Broadcaster Ma Allwright has his say

18-19

viewpoint Policy debate

32-33

infographic Response to hoverboard safety crisis

May 2016

Academia: scams How we become complicit in our own deception

May 2016 Issue 6

20 cover story Devolution has enabled Cornwall County Council’s regulatory package to become a vital part of the area’s economic growth

38-40

Back to the future Learning metrology and food safety lessons from Florida – thanks to a CoF bursary

41-44

CPPD training Product recalls: a recap

46-49

Legal What the EU referendum – and a potential Brexit – might mean for trading standards

50

downtime Five great... quotes from the 20th century

5

Digest

Government under fire for review delay The government is delaying publication of its trading standards review in favour of a further ‘cu ing red tape’ study of local authority-enforced regulation – a decision criticised by CTSI. Institute chief executive Leon Livermore said: ‘The government has already reviewed trading standards services, and undoubtedly found they are underresourced. There is no reason why it shouldn’t publish and act on the findings.’

The review closed as TS Review went to press.

Home Secretary Theresa May announced a new taskforce to crack down on the fraud that ‘shames our financial system’. The Joint Fraud Taskforce aims to fast track intelligence sharing between banks and law enforcement to tackle crime gangs in a more coordinated way, and will create a top 10 most-wanted list of fraudsters.

A return to the bad old days?

BUDGET USHERS IN MORE CUTS AND ‘SUGAR TAX’

CTSI voiced concerns that unscrupulous and potentially illegal sales tactics could be reintroduced into the home energy sector after an Ofgem consultation proposing a move from a prescriptive regulatory regime to a general principles approach. Meanwhile, ScottishPower revealed that it wants the Competition and Markets Authority to

Further cuts of £3.5bn to local government spending and a new ‘sugar tax’ on so drinks production were among a ra of measures announced during the 2016 Budget, delivered by Chancellor George Osborne. Cuts to public spending in 2019-20 will be delivered through another departmental efficiency review, while the new sugar tax is expected to raise £520m in its first year.

make it easier to sell energy face-to-face – including doorto-door – arguing that industry standards are improving.

Doorstep selling was scrapped four years ago.

6

Source: TS Today February 2016 - April 2016 www.tradingstandards.uk/tstoday

Hot topic: trends Citizens Advice October-December 2015

-39%

The decrease in payday loans debt issues

101%

The increase in water and sewage complaints, thought to be driven by Watersure/social tariff increase of more than 400%

-24%

The decrease in fraud and scam queries

129%

The increase in personal pension enquiries

Seller of flammable ma resses prosecuted

Digest

Note: The figures in this report exclude Pension Wise. Citizens Advice has seen an increase in issues relating to personal pensions and it has also seen a small increase in issues on State Retirement Pension (up 2%). These are linked to providing the Pension Wise service.

A Bournemouth man has been prosecuted after 85 per cent of mattresses he was selling failed fire safety testing by Dorset Trading Standards.

Patrick Furlong, 41, of Bournemouth, was found guilty at Bournemouth Magistrates’ Court of supplying two mattresses, and possessing for sale 213 mattresses, that did not meet the requirements of the British Standard for

suspected they may not

fire safety.

comply with fire safety

Following seizure of

standards and so two

‘Following seizure of Furlong’s stock, all but 12 of 125 mattresses tested failed the fire safety standard’

Furlong’s stock, all but

mattresses were bought

12 of 125 mattresses

and tested. The results

tested failed the fire

showed that once ignited

shown over the offences,

ordered to pay a victim

safety standard. When

they did not self-extinguish

he had decided to suspend

surcharge of £80 and

questioned about who

and the fire had to be

the sentence.

£500 costs.

had sold him the goods,

manually put out.

Furlong was unable to offer any details.

Dorset Trading

The chairman of the

Furlong was also found

Martin Thursby,

guilty of an offence under

principal trading standards

bench said this was a

the General Product

officer for Dorset County

serious matter that had

Safety Regulations as he

Council, said: ‘We are very

Standards first saw the

put public safety at risk,

was unable to identify his

pleased with the outcome

mattresses advertised

and that Furlong faced a

supplier. He was given

of the case, as the court

for sale on websites

jail term. However, in view

a suspended sentence

took these safety matters

Gumtree and eBay. Officers

of the regret Furlong had

of 18 weeks in total and

very seriously.’

CONSUMER CREDIT

Unsecured consumer borrowing is growing at its fastest rate for 11 years, according to the latest Bank of England quarterly credit conditions review. The rise – up 9.3 per cent in February and the highest since 2005 – has been attributed to an increase in car finance deals and a watering-down of credit-scoring criteria by loan providers. Supermarket loans were found to be offered at particularly competitive rates.

May 2016

7

Hitting the Summit The longest case in trading standards’ history has ended in jail sentences for two company directors

Digest: Case study

and suspended sentences for four others The jury delivered 64 guilty verdicts after a 17-week

heavily discounted price.

While at the bank, the man

then issued directly to the victim just days after works

trial – the longest in trading

agreed to involve trading

standards’ history – in a

standards, as the price

case that cuts to the heart of

seemed high, despite being

Coventry Trading Standards

misleading reference pricing

‘slashed’ by £4,000. Summit

had investigated Summit

and aggressive sales tactics

was told further payment

Roofguard. This had resulted

used in consumers’ homes.

would be withheld pending

in proceedings under the

an investigation.

Consumer Protection from

It all started one Friday afternoon in December

The next working day,

were complete.

We then discovered

Unfair Trading Regulations

2011, when Dudley Trading

a Summit director visited

(CPUT), to which the firm

Standards (Dudley TS)

Dudley TS, demanding the

pleaded guilty in January

received an alert from a bank

investigation be carried

2012 in virtually identical

about a vulnerable 89-year-

out quickly because he

circumstances to those

old man, who had gone to

wanted the outstanding

encountered by our victim.

make a cash withdrawal for

£1,000. We explained that

roofing works carried out by

an independent survey

of being convicted and

a number of other authorities

Summit Roofguard.

would be conducted, and

fined £3,500, Summit

led to alleged offending in

all matters were now to be

Roofguard tried to sue our

Warwickshire, Staffordshire,

Summit – trading as Status

addressed to us and not the

victim for the outstanding

Birmingham, Leicestershire,

Glass – had replaced the

elderly consumer.

balance, and complained

Gloucestershire and

In the preceding months,

However, within days

Summit Roofguard replaced double glazing and gu ering

received over the coming months. Joint working with

of Dudley TS’ overzealous

Herefordshire being probed.

then called him as Summit

received a call from another

action. Subsequently, we

Invariably, the victims were

Roofguard saying he had

company representative,

represented the pensioner at

elderly or vulnerable – the

earned a £2,000 discount

again demanding payment

county court, which halted

oldest being 96. In some

voucher for being a loyal

and threatening to start

the proceedings.

cases, complaints were

customer. As a result, he

county court proceedings

agreed to have his garage re-roofed at a supposedly

man’s uPVC windows. It

The following day we

It became apparent that

brought by friends, carers or

against the consumer. A

this incident was not isolated,

family because victims were

‘final letter before action’ was

and further complaints were

too vulnerable to complain.

Top sales staff got the chance to meet showbiz and sports personalities, including former boxer Frank Bruno

8

May 2016

35 per cent of consumers

up, we set to work. A key

price, the company never

piece of evidence was added

had any intention of

for trial two – CTSI’s draft

selling at that price and no

Pricing Practices Guide, to

consumer had ever paid it.

support the guide published

A ‘fear of loss’ was then

by the Department of

introduced, with the buyer

Business, Innovation and

told they would lose the ‘A

Skills in November 2010.

grade subsidy’ if they didn’t

‘Old lady, very tired. I felt like I bullied her into a sale. Bad taste in my mouth, did not like it’

Having picked ourselves

purchased at the 12-month

Both made it clear

sign immediately. If a

that any specific price

consumer agreed, they had

advantage claimed, which

to sign a ‘confidentiality

is intended to influence

clause’ not to disclose the

the economic behaviour

contract price, and were told

of the consumer, must be

that writing a letter of

fair. More importantly – in

satisfaction to Summit was a

relation to reference pricing

contractual term.

– it was made clear that the

The case was listed for

12-month reference price

trial in summer 2014, with

quoted by this trader was

offences brought under the

not genuine and therefore

Fraud Act 2006, Companies

not fair.

Act 2006 and Consumer

The jury was told that

Protection from Unfair

pricing was only one

Trading Regulations 2008.

element of the case, that everything started with

Many complaints related

that buyers were told was

The court decided that

to mis-selling by way of false

competitive, and the price

the CPUT offences should

the misleading reference

discounts or falsely stating

at which 35 per cent of sales

be left to lie on file as it was

prices – the 12-month price

the necessity of work to be

were supposedly made.

considered unfair to try both

– but that the misleading

dishonesty offences and

sales practices included

done. Others complained

However, the consumer

that Summit would not

would then be told of a

those of strict liability at the

the whole sales process.

leave vulnerable and elderly

‘feature-home subsidy’,

same trial. However, at the

Accordingly, the allegation in

victims alone. In some cases

where their property was

end of the prosecution case,

each of the misleading action

– where people had tried

assessed for its suitability

Judge Amjad Nawaz said

counts included, but was not

to cancel an order – their

as a showcase for the

he saw no dishonesty in the

limited to:

request was refused and a

company, and allocated an

company’s trading practices

salesperson sent to negotiate

A to D grade. Consumers

and stayed the trial.

• The use of false and misleading reference prices

a cheaper price.

completed a questionnaire

A key discovery during the investigation was the company’s 14-step ‘sales

Rather than appeal against

and, at the end, all were

the decision on the fraud

given an A grade.

offences, it was decided

The salesperson would

that the CPUT offences

guide’, which set an initial

then ‘kill the 12-month

should be reinstated and the

‘12-month price’. In reality

price’. This showed that,

trial run again. It began in

this was a ‘reference price’

despite initially stating that

September 2015.

May 2016

Digest: Case study

Words. Kuldeep Maan Images. Shu erstock

• The contract prices being presented as genuinely discounted ‘bargain’ prices, when they were not • The false and misleading use of the ‘showhome promotion questionnaire’

9

KEY EVIDENCE

Digest: Case study

â—?

â—?

â—?

â—?

â—?

10

An expert independent chartered building surveyor found that the initial quoted price was far in excess of the true market value of the goods and services.

Furthermore, he stated that Summit invariably arrived at discounted prices for works that was still excessive when compared to the national average price as stated by the Charted Institute of Surveyors

‘Summit Roofguard director Sarah Beadle was found guilty of 28 various offences of unfair, misleading or aggressive commercial practices’

negotiate a cheaper deal, and that a special team of callmakers existed solely to call prospective customers continually. Some people alleged they were called as many as 16 times in one day.

Summit Roofguard director Sarah Beadle was found guilty of 28 various

• The false and misleading calls to Summit’s offices to

offences of unfair, misleading

obtain a property grading

practices. Co-director Martin

• Complainants being told that the so-called

Information from the trader’s suppliers showed the company purchased its products relatively cheaply Evidence gained from Summit’s open source Facebook account revealed that the company: had an annual turnover of £4m; had hosted annual rewards nights for top sales staff where celebrities such as Frank Bruno a‚ended; had given sales staff incentives for selling finance; and took the top sales staff on holidays twice a year to locations such as New York and Monaco

or aggressive commercial Evans was found guilty of 24Â offences. General manager

‘discounted prices’ were

Trefor Prytherch was found

only available that day,

guilty of two offences, while

and if they didn’t sign

employees Derrick Fisher

immediately, the price

and Glenys Bolton were

would return to the

each found guilty of five.

12-month reference price

Salesman Shaid Hussain

• Complainants being told to keep ‘discounted prices’ a

admitted four similar counts

secret and asked to sign a

was found not guilty of two

confidentiality clause

further counts, Evans of six

• The misleading representations that were

at an earlier hearing. Beadle

and Prytherch of six.

Beadle and Evans were

made to complainants if

each jailed for two and a half

they declined to contract

years. The others received

• How the defendants sought to ensure that

suspended prison sentences.

complainants did not

the sales process as a ‘sham’

exercise their statutory

and a ‘pantomime’ and said

cancellation rights

that custodial sentences

A test purchase was carried out to see the sales method first-hand. A TSO was told they had received the best discount available as long as they agreed to the work there and then and signed a ‘confidentiality clause’

At the end of the prosecution

TSOs seized numerous items of business documentation. Some of the diary entries of Glenys Bolton, the company’s top saleswoman, told their own story: ‘Old lady, very tired.

I felt like I bullied her into a sale. Bad taste in my mouth, did not like it’

evidence, Judge Nawaz ruled

Judge Nawaz described

would deter others.

It is our hope that the

that the case was properly

successful conclusion of

brought and allowed the trial

this case – and subsequent

to proceed.

national media attention –

The defendants admitted

will enable other trading

that no-one ever paid the

standards professionals to

12-month price, and that

deal with similar practices

everyone was given the A

with increased confidence.

grade subsidy. They claimed An initial, brief report on this case first appeared in the April 2016 edition of TS Today

this was an industry-wide practice. They also admitted that when customers tried to cancel, they would be revisited in an attempt to

Kuldeep Maan is a senior trading standards officer and intelligence analyst at Dudley Trading Standards.

May 2016

Devolution is the only game in town KATHRYN PREECE PROGRAMME MANAGER AT THE BETTER REGULATION DELIVERY OFFICE SPEAKING AT THE YEAR AHEAD CONFERENCE

Some quick – but ironically appropriate – back-of-a-fag-packet economics showed one of these businesses could potentially be turning over nearly £500,000 a year, assuming each customer had only come in for two packets each

Energy customers are potentially paying £1.7bn more a year than they would in a more competitive market… around 70 per cent of customers with the ‘Big Six’ energy firms are on the more expensive ‘default’ standard variable tariff – yet the average customer could save more than £300 a year by switching deals COMPETITION AND MARKETS

Abstracts MEDWAY COUNCIL’S SIMON ELLIS POINTS OUT THE ECONOMICS OF ONE ILLEGAL TOBACCO RING

AUTHORITY

From TS Today

If people vote to leave the EU, regulators will be in high demand from policymakers – expertise central government should pay for CTSI CHIEF EXECUTIVE LEON LIVERMORE SPEAKING AT THE YEAR AHEAD CONFERENCE

One of the stupidest, most dangerous and unscientific pieces of drugs legislation ever

White goods account for more than 300 fires, on average, in London each year – 90 per cent of which are not caused by human behaviour CHARLIE PUGSLEY HEAD OF FIRE INVESTIGATION AT LONDON FIRE BRIGADE

It’s ironic for a government minister to be demanding more be done on laser pens while the Cabinet Office is consulting on how to further cut red tape, and the capacity and ability of trading standards continues to be debilitated by cuts

In the UK alone, the handbag and luggage manufacturing sector loses €149m (circa £118m) annually as a result of counterfeit products in the marketplace – nearly 12 per cent of all sales in this sector

TOY SAFETY EXPERT DAVID ELLERINGTON’S PERSONAL VIEW FOLLOWING MP ANNA SOUBRY’S CALL FOR ACTION ON LASER PENS

OFFICE FOR HARMONIZATION IN THE INTERNAL MARKET

PAUL FLYNN LABOUR MP FOR NEWPORT WEST IN AN EARLY DAY MOTION TABLED AGAINST THE NEW PSYCHOACTIVE SUBSTANCES BILL

Source: TS Today February 2016 – April 2016 www.tradingstandards.uk/tstoday

11

Trading standards fears its ability to carry out online investigations will be significantly hampered if the Investigatory Powers Bill restricts its access to criminals’ internet data

Words. Maeve Sinno

Analysis

Bone of contention The Investigatory Powers

enforcement toolkit, some

the majority of criminal

local authorities, says this

Bill – nicknamed the

MPs are fiercely opposed to

suspects are using online

is ‘precisely why trading

‘snoopers’ charter’ – has

local authorities – including

communications services,

standards require access to

been described by Prime

trading standards – having

and other online services

IP addresses’.

Minister David Cameron as

access to internet connection

of potential investigative

‘one of the most important

records (ICRs), which reveal

value, that are currently

warned that crimes will

bills this House will discuss’.

the services accessed by a

invisible to communications

go unpunished – and

data requests.’

consumers must endure

Introduced on 1 March

device. In mid-April, two

2016, the bill aims to update

MPs tabled amendments

the means of tackling crime

to remove local authorities

finding out who owns a

continues to be denied

and ensuring national safety

from the list of public

particular internet protocol

to the profession: ‘In

in a digital age, adding new

bodies entitled to access

(IP) address – a unique

not having access to IP

powers of data surveillance

communications data

numerical label assigned

addresses – whether entity

to online communications

altogether.

to every device. The

or events data, or classed

Trading Standards North

as an ICR (see panel, p14)

debated in the House of

West Intellectual Property

– many trading standards

Commons, but has yet to

Group, which represents 22

investigations will fail, and

and creating new categories of data.

It has sparked debate

So far, the bill has been

ICRs can be crucial for

being ripped off – if access

about the balance between

pass through the House of

the service will not be able

privacy and national security,

Lords. As it stands, areas of

to comply with the duties

particularly after National

access for local authorities

imposed by parliament.’

Security Agency (NSA)

remain unclear because

whistleblower Edward

of hazy definitions of data

low-level criminality that

Snowden exposed the extent

and varying interpretations

makes up a large part of

of America’s ‘unprecedented

of the bill. What is clear,

trading standards’ work,

and industrial-scale online

however, is that trading

the group says ‘the police

data trawling’, as reported

standards will have access

will have access to the

by The Guardian in 2013.

to certain communications

data required by trading

As the Data Retention and

data, but will be ‘prohibited’

Investigatory Powers Act

from accessing ICRs –

2014 is due to be repealed

despite investigating and

on 31 December 2016, it

prosecuting crimes that

has also prompted criticism

can result in up to 10 years

that the bill is being rushed

in prison.

through parliament.

Despite it potentially being an invaluable tool in the

12

The group has

The government fact sheet on ICRs says: ‘Evidence indicates that

For the high-volume/

DAVID DAVIS CONSERVATIVE MP

‘The Lords will be very important in changing the bill; the Commons may not.’

(G2 interview, 8 November 2015 )

standards officers; however, in the majority of cases, these crimes will not be investigated by local policing units. Therefore, this level of criminality will go uninvestigated, unpunished. Consumers will continue to be ripped off by

May 2016

Timeline

17 Jul 11 Jun 4 Nov 11 Feb 1 Mar 2014 2015 2015 2016 2016

15 Mar 24 Mar 31 Dec 2016 2016 2016

Data Retention and Investigatory Powers Act 2014 (DRIPA) receives Royal Assent

Second reading of bill in the House of Commons

Government publishes dra Investigatory Powers Bill for pre-legislative scrutiny

Joint commi ee of both Houses of Parliament publish report on dra bill

unscrupulous traders and

information is key to

criminals, and complainants

investigations. It becomes

will not be recompensed.’

a matter of whether

Giving evidence to the

the government wants

public bill committee in

us to conduct online

March, Mark Astley, head

investigations, or whether

of the National Anti-Fraud

it doesn’t.’

Network (NAFN) Data and

Mike Andrews, national

Intelligence Services, used

coordinator of the National

a case of advance-fee fraud

Trading Standards e-Crime

– worth £7.5m in consumer

Team, agrees – in principle.

harm – to illustrate the level

‘When you look at what

of serious crime dealt with

trading standards works

by trading standards.

on, it is a level of serious

Another example,

Investigatory Powers Bill introduced to the House of Commons

Bill reaches commi ee stage in House of Commons

Sunset provision in DRIPA takes effect

RACHEL PHELPS PUBLIC AFFAIRS AND CAMPAIGNS ADVISER AT THE LOCAL GOVERNMENT ASSOCIATION

‘A small number of well-publicised instances of surveillance activity being used inappropriately by councils continues to impact media and parliamentary perceptions, even though there is no suggestion of communications data having been misused, and despite the numerous safeguards in place’

criminality. You could argue

says e-crime expert Paul

that the service should be

Thompson, is the issue of

entitled to broader access

counterfeit sales on social

– but this is not realistic.

media, such as Facebook,

contained within the ICRs?

standards currently

‘People have raised this,’

investigates – but Thompson

In an ideal world, having

says Thompson. ‘But if the

questions whether they have

and the difficulties officers

full access would be great.

police get access to a piece

the resources to do this. He

face in trying to trace the

However, there is no

of data and pass it on to

also has misgivings about

perpetrators. Under the new

appetite for this among the

trading standards, then it is

the police’s technical ability

bill, information about a

Home Office and politicians.’

still in our hands – and it is

to tackle trading standards’

not supposed to be.’

matters: ‘Trading standards

fraudulent seller’s account,

There is still time for

with closed privacy settings,

members of the House of

is likely to be accessible to

Lords to table changes to the

gaining access in this

police forces do not – and

the police, but not to trading

bill, giving trading standards

way is not possible, and

they may not have the skill

standards.

the same access to ICRs as

would create ‘trouble’ by

level or resources to focus on

the police, HM Revenue &

deliberately circumventing

these types of crimes.’

frustrating,’ says Thompson.

Customs, and many other

the law. ‘Increasing ways of

‘Trading standards has

public and enforcement

collaborating are welcomed,’

public bill committee,

a duty to investigate

bodies. But will they? If

he says, ‘but within the legal

Astley explained why

trademarks, yet we haven’t

they don’t – or attempts

and appropriate framework.’

access to communications

got the powers to do so, in

fail – could the service work

Alternatively, the police

data for NAFN members

my opinion.

with the police, using them

could be asked to deal with

is important. ‘Trading

as a conduit to information

the crimes that trading

standards are our main

‘It can get quite

‘Access to online

May 2016

Analysis

David Anderson QC’s review of UK investigatory powers published

Andrews agrees that

has e-crime officers, but local

In his evidence to the

13

DATA BOUNDARIES

Analysis

Communications data is described as ‘the context, but not the content of a communication’ – so it includes the email address or mobile phone number used to send an email, but not what was said in the email or call.

14

According to the Local Government Association, ‘the [Investigatory Powers] Bill introduces new definitions of communications data, replacing the current definitions of subscriber, service use and traffic data with entities and events data’.

EDWARD SNOWDEN NATIONAL SECURITY AGENCY WHISTLEBLOWER

‘Your web records are not like ‘‘an itemised phone bill’’; they’re like a list of every book you’ve ever opened. #SnoopersCharter’ Posted 5:30 PM, 4 Nov 2015 Retweets: 2,540

Likes: 2,034

users. They are not high

or proportionate for

the guidance notes aren’t

users [in requesting

information held in ICRs to

designed specifically for

telecoms data], but it is

be accessed in connection

local authorities.’ CTSI has

important for them to be

with lower-level offences,’ he

now called for more specific

‘Entity’ data is the ‘who’ and the ‘how’ – for example, a phone number, an email address, a type of device – while ‘events’ data is the ‘where’ and ‘when’.

able to investigate those

wrote. ‘Instead, I think this

direction.

crimes so they can support

threshold should be set at

their community and the

serious crime and that this

Change?

businesses they are working

should be defined in the bill

There is a case to be

for and on behalf of.’

as an offence that attracts

made for access to ICRs

a sentence of not less than

to be extended to trading

having access to ICRs

three years in prison.’ This

standards – after all, the level

According to Big Brother Watch, a civil liberties campaigning group, internet connection records (ICRs) will include details of a person’s online access, including device details, IP addresses, the amount of data downloaded and the time of browsing.

would inhibit the NAFN,

prompts the question – do

of criminal investigations

Astley said: ‘The impact is

MPs realise that trading

the profession undertakes

uncertain. There are areas…

standards can prosecute

is significant. Yet simply

in the digitisation world that

crimes that carry sentences

maintaining existing access

we are moving towards,

more than three times

may be the battle.

where everything is being

higher than this?

It seems that source IP addresses will fall under entity data, and thus be accessible to local authorities. However, destination IP addresses – which are required to resolve an IP address and link it to a name – will fall under ICRs, so will be inaccessible to local authorities in the bill’s current form.

When asked how not

conducted over the internet.

According to Astley, local authorities losing all access

That may have an impact

Blurred lines

on investigations for local

While there is a spectrum of

‘you can never say never’.

authorities.’

views on ICRs, the proposed

Perhaps this can go both

bill at least seems to unite

ways.

MPs, however, appear to favour tougher rules.

Shadow Home Secretary

people on its lack of clarity.

‘Half the problem is the

Andy Burnham wrote to the

definitions used – people

Home Secretary Theresa

have different perspectives

May – sponsor of the bill

on what they mean,’ says

– on 4 April, arguing for a

Thompson. ‘They are

higher threshold at which

unclear.’ Robyn Ellison,

ICRs may be accessed.

policy officer at CTSI,

‘I do not think it is necessary

agrees: ‘It is quite vague, and

is unlikely to happen – but

Sources: www.local.gov.uk www.gov.uk www.publications.parliament.uk www.data.parliament.uk www.services.parliament.uk www.theyworkforyou.com www.bigbrotherwatch.org.uk www.andyburnhamblogspot.co.uk www.guardian.com www.bbc.co.uk www.telegraph.co.uk

May 2016

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Breaking the bad guys It’s very tempting to take a bleak view of the work we do.

is more fascinating – and possibly useful – is trying to

After all, we deal largely with people who wake up in the

work out how they got there. After all, it takes some

morning with a drastically different set of priorities from

organisation and flair to run a fraudulent company.

the rest of the world.

Like you, I’m sure, I often wonder how someone

Maybe you’ve thought, like me, that if put to good use, those same talents could be used to run a successful

hunches over their cornflakes and thinks: ‘Today I

company. So what events in their lives have made their

will continue to fleece the over-70s of their savings by

cornflakes moment so different from ours? Deprivation in

misrepresenting mobility products they don’t need and

childhood? A sick partner? Anger against the government

pressuring them into a sale.’

or society at large? A desire

In other words, a ‘cereal

to provide for your family

con-artist’. Ahem.

at all costs, or just a desire

Take recent inductees to

for status that feels out of

the Rogue Hall of Fame, Sarah

reach? Maybe ROGUE runs

Beadle and Martin Evans,

through Beadle and Evans

both directors of Worcester’s

like Blackpool rock. But that

Summit Roofguard. They’re

doesn’t help us much.

currently serving two and-a-

I take as my text the

half year sentences – bravo,

TV drama, Breaking Bad.

Dudley – for misleading and

Hero/villain Walter White

aggressive sales practices

manufactures drugs to

after teaching their sales force

provide for his family

how to rip-off customers for

when his terminal illness

thousands of pounds each.

threatens to put them on

The case makes sickening

Viewpoint

Words. Ma Allwright // Illustrations. Paddy Mills and Will McPhail

the breadline. Fiction,

reading. The company turned over millions each year by

I know – and an extreme example – but what feels real

deceiving the elderly into paying for roofing work they

about it is that Walter’s twisted sense of logic makes him

didn’t need, and which often wasn’t completed. But this

feel justified in acting without feeling for others.

wasn’t a ‘nod’s as good as a wink’ or ‘turn a blind eye’

In my brushes with rogue traders, that certainly

operation. A 14-stage ‘how-to’ guide to (dishonestly)

feels familiar. I’ve never seen a really good study of the

closing sales was distributed to staff, and top sellers were

psychology and motivation of rogues, but I do wonder

rewarded with awards presented by minor celebrities.

whether understanding ‘rogue logic’ a little better might

So, no slip-up here – this was systematic.

give us a few clues about how best to tackle them.

The people in charge make themselves hard to like.

Even the pictures of Beadle and Evans make them look like ‘dodgepots’ – all pinstripes and permatans. But what

May 2016

Ma Allwright is a television presenter and journalist. He presents BBC programmes including Watchdog, Rogue Traders, The Housing Enforcers, and Saints and Scroungers.

17

Cutting Red Tape review should not be dismissed – it’s a chance for us to assess 21st-century regulatory needs Viewpoint

Words. Melissa Dring // Illustration. Paddy Mills In my last column, I expressed a hope for bold and

part of the scope of the existing trading standards review

ambitious recommendations from the delayed central

was to look at how the service could support deregulation,

government review of trading standards. In particular,

whether any responsibilities could be removed, and

I called for swift and coordinated action to avoid

how central government could reduce the enforcement

exacerbating the postcode lottery of protection.

burden. Respondents felt that these issues could not be

So I was disappointed when the government announced that publication of those recommendations

be dealt with alongside other local authority enforcement

would be delayed while a new Cutting Red Tape review

and regulation.

of local authority regulation takes place. I’m sure many readers of TS Review felt the same way.

Ministers, meanwhile, continue to expect the service

The mission statement for the Cutting Red Tape review talks about ‘removing unnecessary regulatory barriers to growth and associated costs placed on business’ by

to act on various complaints about product safety and

councils. It is broad in scope, looking at all local authority

other issues that have attracted political interest. Whether

regulatory functions. With the power of the Cabinet Office

Business Minister Anna Soubry appreciates the irony

behind it, it has, perhaps, greater ambition and a greater

of asking for urgent action on laser pens from ‘Trading

chance of success when it comes to influencing competing

Standards’ while the trading standards review remains

Whitehall departments.

delayed is not clear. Politicians and the media seem to have

Much of the narrative behind the review is politically

missed the link between the Whirlpool/Indesit tumble-

driven, so we will be watching closely to check whether

dryer faults and the recently published product-recall

its conclusions and recommendations are evidence-based.

review, which explicitly asked the trading standards review

Supplying this evidence is another strong reason to

to answer some of its questions about resourcing and

participate in the debate.

sustainability of the service.

Despite this, we should not dismiss Cutting Red Tape

Given the review’s tone and raison d’être – deregulation to support business growth and reduce

as just another government review that will produce

burdens – it is important that we articulate the benefits

no results, turn our backs on it and carry on as usual.

trading standards can bring to businesses, small and large.

In my experience, it is far better to be around the table,

Colleagues up and down the country work every day to

contributing to discussions, than outside, disagreeing

support businesses – through Primary Authority or on

loudly. We need to provide solutions, be constructive –

a more ad-hoc basis – helping them to understand the

and sometimes radical – and we must safeguard against

requirements of often complex regulation and frequently

appearing as traditionalists who are against change.

saving them money through risk assessment and auditing.

This review, after all, is something of an obvious step:

18

looked at for trading standards in isolation, but should

Enforcement against rogue traders and fraudsters not only

May 2016

CTSI’S KEY MESSAGES FOR THE REVIEW ● Businesses rely on local authority enforcers to eliminate rogue traders and criminals dealing unfairly, so they can compete fairly with other legitimate businesses

Access to expert advice and guidance to support businesses in achieving compliance is a crucial part of a local authority’s regulatory role

protects the public, but also creates a level playing field for legitimate businesses, allowing them to compete fairly, and promoting productivity and economic growth.

This review is an opportunity to make sure that the legal frameworks within which trading standards and other local authority regulators operate are fit for purpose. One of the reasons regulation can be so hard for businesses to understand is that it often develops and accumulates on an ad-hoc basis over a long period – the oldest piece of legislation still on the list of statutory duties dates back to 1875. We are calling on the government to reassess and rationalise the stock of legislation while maintaining important protections for consumers and businesses. To do this they must understand the drivers of regulation – namely, people, product and place (see box out) – and how each category demands a different solution.

It is also a chance for trading standards to assess the regulatory needs of the 21st-century; how can government and regulators enforce rules when trade is increasingly international? What role should intermediaries play in policing the digital market? Hot topics such as scams, secondary ticketing and hoverboards pose questions about the way we operate as a service and how we continue to protect consumers in a fast-paced trading environment.

This review is unlikely to provide all the answers, but it’s a good place to start.

Melissa Dring is policy director at CTSI

● Focus on the legislation that is on the statute book as well as the way in which regulators enforce it – this is an opportunity to rationalise the large stock of regulation ● Government should understand the basic categories of regulation: People – where activities carried out by an individual require regulation to protect the public and businesses. The ability to deal with traders who deliberately break the law, put unsafe products on the market or commit fraud is essential to protect the most vulnerable Product – with a focus on the composition, labelling and safety of food and goods throughout the supply chain.

Some technical regulations here could be rationalised and streamlined to focus on overarching principles that are broadly applicable, such as the duty to ensure goods are safe Place – where the focus or subject of regulation is a physical locality or premises that require inspection. Some processes could be simplified by taking ‘whole place’ approaches, but government should recognise that local authorities are best placed to know what works in their area

Viewpoint

●

19

GROWING PAINS

Devolved powers: how Cornwall learned to make its regulatory offering a vital part of the county’s economic growth

20

At Year Ahead 2016, delegates were told that ‘devolution is the only game in town’ and regulators were advised to get a place around the negotiating table.

Put simply, devolution is the release of central government funds to drive local initiatives and priorities.

Devolution

Words. Carina Bailey Images. Debra Nelson

It is anticipated that devolution will: enable local communities to plan and invest in their futures; boost local economies and productivity; and reduce central government administration.

To date, 11 devolution deals have been agreed*, but only two have made regulatory services a specific part of the arrangement – even though all of the discussions about transferring power to local authorities have referred to devolved business support.

Despite these agreements, the path to devolution is still far from plain. As Amyas Morse, comptroller and auditor general of the National Audit Office, put it: ‘The government’s approach to English devolution still has an air of charting undiscovered territory. It is in explorer mode, drawing the map as it goes along. Some of the opportunities and obstacles are becoming clearer, but we still do not have a clear view of the landscape or, crucially, an idea of the destination.’

Others have criticised the process for its lack of public consultation, while some councillors have rebelled during the ratification process, which has been their first opportunity to see the ‘done deal’. Professor Robin Hambleton, of the University of the West of England, went as far as to describe devolution as ‘centralisation on steroids’, stating: ‘Ministers, not elected local politicians – still less local citizens – will decide whether the deals are acceptable. The accountability is up to distant figures in Whitehall, not down to local people.’

These remarks aside, the financial pressures that local authorities are facing are very real, with rapid public

May 2016

21

sector reform likely to change the face of council services – including trading standards – forever.

Four or five years ago, canny foresight about this changing landscape, the looming cuts, and recognition that a strong local economy is important for generating jobs and a healthy public led Cornwall County Council’s public protection team to get a head start on creating

Devolution

an attractive regulatory offer for business. This, in turn, created the perfect bedfellow for devolution.

BUSINESS IDEAL FOODS

Cornwall’s devolution deal The government’s devolution deal with Cornwall Council

CONTRACT £1.5m contract to export fish heads and fish products to Asia, upon which 150 jobs were reliant

and the Cornwall and Isles of Scilly NHS Trust was struck in July 2015, and was the first of its kind with a single unitary authority. It does not require an elected mayor to be established, and devolved powers will be given to Cornwall County Council.

THREAT Vietnam’s government changed food-import regulations overnight CORNWALL’S PUBLIC PROTECTION TEAM RESPONSE ‘[Ideal Foods] went to the minister for agriculture and fisheries, who couldn’t help – but then the firm remembered they had a contact with our staff.

We looked at the import paperwork and how they could overcome [Vietnam’s] regulatory burdens. Within a week and a half, their contract was able to continue.’

Mark Luxton

22

The agreement will be fiscally neutral for the government and for Cornwall, but one of its many priorities will be to integrate local and national business support services, to make it easier for local firms to find the help they need to grow. This is particularly important since the Chancellor, George Osborne, announced that councils will be reliant on business rates in future, rather than direct government funding. Cornwall needs to save £196m in the period up to 2018-19 because of reductions in funding, steep increases in service demand and inflationary pressures.

Story so far Be er Business for All (BBfA) brings together businesses and regulators, o en for the first time, to consider and change how local regulation is delivered and received. www.gov.uk

Cornwall’s journey towards devolution began about four years ago, when regulators questioned how it could support the local growth strategy, for which the Cornwall and Isles of Scilly Local Enterprise Partnership (LEP) was custodian.

Traditionally, regulation wasn’t regarded as part of the growth strategy. This is something Mark Luxton, assistant

May 2016

head of service, public protection, at Cornwall Council, and his team were starkly reminded of when they first approached the LEP for guidance. ‘They said, “look, you’re regulators – go away and carry on doing your

– which meant four out of 10 businesses wouldn’t even contact them for advice • seven out of 10 businesses said they were better, or more competitive, if they were regulatory-compliant

job”.’ Luxton’s team learned from that, admitting they

Luxton says finding this out was like a ‘light-bulb

didn’t have tangible evidence, at that time, to show how

moment’: ‘Who would want to do business with a

they made a difference and supported the local economy.

business that isn’t regulatory complaint? It’s a no brainer!’

After discussions with their colleagues in economic development, they realised they needed to show how regulatory services – which, in Cornwall, consists of trading standards, environmental health and licensing – was helping start-ups, exports and business growth.

The team also realised it was overlooking one of its unique selling points: the 60,000-plus one-to-one visits it makes to businesses of all types and sizes each year. So it set about generating real-life case studies and conducted a business survey of its public protection ‘brand’.

When Luxton returned to make his case to the LEP

Devolution

CAMBRIDGESHIRE COUNTY COUNCIL VOTED AGAINST ACCEPTING THE EAST ANGLIA DEVOLUTION DEAL BY 64 VOTES TO ONE ON 21 MARCH 2016. THE SAME MONTH, SUNDERLAND, DURHAM, SOUTH TYNESIDE AND GATESHEAD POSTPONED A FINAL DECISION ON THE NORTH EAST DEVOLUTION DEAL

He told the LEP that his public protection team wanted to work with the partnership to: • Better tailor its support to businesses, which would help economic growth • Re-model its services • Have a ‘critical friend’ to steer it • Add value to its offering, so that it became a package that would save businesses time and money, and help them to grow This time, the LEP said yes, and the Better Business for All (BBfA) partnership was born. Working with the BBfA,

board, he was able to tell them that: • 40 per cent of businesses feared regulatory services

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May 2016

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23

Devolution

DEVOLUTION IN ENGLAND INCEPTION

the public protection team engaged with business on an unprecedented scale and, for the first time, found out

A er the ‘no’ vote in the September 2014 Sco ish independence referendum, UK Prime Minister David Cameron announced that – alongside proposals for additional devolution to Scotland, Wales and Northern Ireland – wider civic engagement was needed to empower ‘our great cities’.

what companies actually wanted.

This followed the production of several reports during 2014 making proposals for the transfer of powers to local authorities, or to local areas. These built on the 2012 report, No Stone Unturned: In Pursuit of Growth.

£150, for example. Luxton says: ‘When the pilot started

The first deal was announced by government and the Greater Manchester Combined Authority in November 2014.

protection service to prove how it supports the economy.

New service On 4 January 2016, Cornwall launched its Regulatory Business Advice Service, offering firms a single point of contact to access bespoke support across environmental health, trading standards and licensing. Tailored advice is provided over the phone or through a site visit.

In an approach that is currently being piloted, one team picks up the business regulatory support enquiries.

The cost of service packages ranges from £10 to £350; three hours of food safety advice and an onsite visit is we “switched on” charging for all of our services – except for over-the-phone regulatory diagnostic and signposting to our new website. The pilot is a precursor to integrating our regulatory services support offer – with planning and fire – into the new Growth Hub.’ The hub’s website was expected to launch on 9 May. A fully devolved approach to the delivery of business support is expected to begin in April 2017.

Working with the BBfA has helped Cornwall’s public ‘[The LEP] know we’re not just about red tape,’ says Luxton. ‘Now our conversations are more about how a business is doing, where it needs help, what its plans are – then tailoring our regulatory offer to its needs.

‘Our approach now is about getting it right first

By 4 September 2015, the government had received 38 bids for devolved powers.

Most of the deals agreed to date have featured a new, directly elected mayor, covering a combined authority area.

The Cities and Local Government Devolution Act 2016 underpins many aspects of these devolution deals. HM Treasury and the Cities and Local Growth Unit are responsible for implementing the devolution deals.

24

time. It’s about having that very early conversation with businesses to explain how we can help and support them. All those conversations with LEP/BBfA helped us to understand the gaps in our support better and what businesses wanted from us.’

Cornwall’s message to businesses – that their packages will save them time and money, and help them For advice about how regulatory services can be built into a devolution package, and to find out more about Cornwall’s journey, contact Mark Luxton, assistant head of service, public protection, at Cornwall Council: mark.luxton@ cornwall.gov.uk

grow – has been so successful that it is now being used as an exemplar by government, and other LEPs and local authorities for their BBfA across the country.

Footnotes: *Agreed by government as of March 2016 Sources: Cornwall Devolution Deal Kevambos Digresennans Kernow Devolution News, Cornwall Devolution newsle er Cornwall’s economy at a glance Devolution to local government in England, Briefing Paper, 5 April 2016 English devolution deals, National Audit Office, 20 April 2016 www.ciosgrowthhub.com

May 2016

‘Nothing is easier than self-deceit. For what every man wishes, that he also believes to be true.’ Demosthenes

Academic research

SPONSORED BY

Words. Professor Mark Fenton-O’Creevy Images. Shu erstock

Little white lies ‘There is nothing more deceptive than an obvious fact.’ Arthur Conan Doyle, The Boscombe Valley Mystery The psychology

of scams: how we

become complicit in our own deception

May 2016

25

Academic research

SPONSORED BY

In many accounts of scams, it is puzzling how seemingly intelligent, capable and well-educated people are taken in by stories that, on closer inspection, should give significant cause for suspicion. In studies of ‘romance scams’, many victims continue to believe in an illusory lover at the other end of the phone – perhaps succumbing to requests to send money – despite friends, family or law enforcement officers informing them that they are being scammed1.

Scam victims are not alone in this. During the 2008 financial crisis it became clear that many highly experienced and highly paid bankers, who understand the relationship between risk and return, had failed to ask a simple question: ‘If we are making extraordinary profits from sub-prime-related investments, what are the extraordinary risks that we are carrying as a consequence?’ It is likely that similar psychological processes of emotionally motivated self-deception are at work in both cases.

We are not the rational calculators of economists’ myths. We evolved to inhabit a world of deep uncertainty, quite different from the world of known and calculable probabilities that many economists imagine. To cope with the uncertainty we face, we construct stories about the world that form a basis for our actions – though we are willing to alter them as circumstances change. However, under stress, we are prone to ‘wish fulfilment’ – and become locked in stories that represent the world as we want it to be, ignoring evidence to the contrary 2 . When we fall victim to fraud, or to the legal but related forms

is more powerful than making a direct statement.

of advertising and marketing manipulation, we often

We fill in the gaps in a story for ourselves, given the

assist in our own deception by succumbing to wish

right motivation – and fraudsters know that playing on

fulfilling fantasy.

emotional vulnerabilities is a powerful route to motivating

Why are we so easy to fool?

circumstance, the desire to look after our families in times

There are important parallels between the traits that

of crisis, or as we approach the end of our lives, are all

mean many of us are easily deceived by fraud and those

vulnerabilities. Strong feelings that we all experience

that make traders in financial markets easily deceived

at some time in our lives offer a way for criminals to

by market movements. In my research on the behaviour

manipulate us.

of traders in investment banks3,4, I found these well-

If it seems like someone can bring an end to

educated, intelligent and highly trained professionals

loneliness, provide a way out of financial difficulties or

to be prone to avoiding emotional discomfort through

prevent something we dread, we want to believe them

illusions about the extent to which they were in control of

and will often explain away any holes in their story

events and able to make unbiased financial judgements.

by ourselves. Yet – once we have become victims of

Effective fraudsters don’t try to fill out all the gaps in a story. Like professional magicians, they know that manipulating us to reach a conclusion for ourselves

26

us. Loneliness, fear of loss, anxiety about financial

deception – another factor comes into play.

Fraud is under-reported. For most of us, self-esteem is important and we, often quite unconsciously, look for

May 2016

Academic research

SPONSORED BY

HIGHLY INTELLIGENT PEOPLE CAN BE EASY TO FOOL, BECAUSE THEY HAVE GREATER COGNITIVE RESOURCES TO DEVOTE TO THEIR OWN SELF DECEPTION

May 2016

27

Academic research

SPONSORED BY

THE NATIONAL FRAUD AUTHORITY IN THE UK ESTIMATES THAT THE TOTAL FRAUD LOSS FOR INDIVIDUALS IS AROUND £9.1BN

ways to protect it. For this reason, we tend to pay more attention to information that builds our self-esteem than information that threatens it. It follows that many of us are quite reluctant to accept that we are victims and are even more reluctant to tell others.

This works well for scammers; scam victims, faced with the possibility that they have been fooled, often go to great lengths to maintain their own belief in the scammer’s story. The alternative – that they have been fooled – is too unpleasant to contemplate. The sense that you may have been complicit in your own deception makes the truth even less bearable to consider.

Intelligence and education are not a protection here.

Highly intelligent people can be easy to fool, because they have greater cognitive resources to devote to their own self-deception. While we should not discount cognitive difficulties – including cognitive decline in the elderly – as a source of vulnerability, emotional vulnerability is at least as important.

The scale of the problem Until recently, the Crime Survey for England and Wales had not fully captured the scale of fraud, especially in the category of cybercrime. However, the piloting of new questions in 2015 offered preliminary estimates of 5.1 million annual incidents of fraud, resulting in

28

May 2016

Registered Charity No: 1148186

THIS IS SERIOUS

ORGANISED FRAUD The National Trading Standard Scams team estimate letters like these could be netting criminals worldwide up to £10 billion a year, but the damage is not just financial. It can cause elderly and vulnerable people to suffer paranoia and confusion, and even to commit suicide. Across the UK there are victims who need protection and potential victims who need education. This is a problem we all need to address.

CONTACT THINK JESSICA NOW TO RECEIVE A FREE 12 PAGE WATCH OUT FOR SCAMS BOOKLET

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Academic research

THE ROLE OF UNDERGROUND FORUMS ON THE INTERNET FOR EXCHANGING INFORMATION, TOOLS AND SPECIALISED SERVICES TO PERPETRATE FRAUD IS NOW WELL DOCUMENTED

3.8 million victims. Of these victims, around 803,000 suffered an uncompensated loss 5. This very conservative measure of the number of victims suffering such a loss is still greater than the estimated 743,000 incidents of burglary in the same period. The National Fraud Authority (NFA) in the UK estimates that the total fraud loss for individuals is around £9.1bn.

The discrepancy between incidents of fraud and uncompensated losses is largely explained by the proportion of unsuccessful frauds, and by the obligations on banks to compensate victims of credit card fraud when they have not breached security rules. However, as I will explore below, a focus solely on uncompensated financial

common in violent crime, but scam victims can also

loss may underestimate the harms done by fraud.

suffer significant harm to their mental health. One study

Psychological harm

the victims suffered a major depressive episode in the

While accounts of the significant financial harm done by

20 months following the fraud (with some experiencing

fraud are compelling, the psychological and emotional

suicidal thoughts) compared to only two per cent of

damage may, in some circumstances, be even more

non-victims. In addition, 45 per cent suffered generalised

important. Consider the victim of a romance scam who,

anxiety disorder compared with 15 per cent of non-victims6.

during a period of loneliness, has fallen in love with

For many individuals, being scammed can mean not

someone online who he believes to be genuine but is

only the difficulties of coping with financial loss, but also

in fact a scammer. The victim may have lost money but

damaged feelings of trust in the benign nature of the

he also grieves for the loss of a relationship he thought

world and others in it. It can also throw into question

to be real. He suffers a massive blow to his own sense

the victim’s core sense of him or herself as a competent

of identity as a capable person worthy of love and has

person. The same emotional vulnerability that can

feelings of guilt and shame when discovering that

make some people a prime target for the manipulations

friends’ or family’s predictions about the illusory nature

of scammers may also make them less resilient in the

of the relationship are true. In some cases, these feelings

aftermath of the crime.

may cause him to become estranged from friends or family at the time when he most needs support.

It is not just in romance scams that harm may occur.

Accounts of post victimisation trauma may be more

30

of victims of a Ponzi scheme found that 29 per cent of

The scammer What, then, of the scammers themselves? Criminologists Peter Grabosky and Grace Duffield suggest that fraud

May 2016

SPONSORED„BY

Furthermore, internet fraud is increasingly not the work of a lone individual but of criminal organisations and networks 8. Criminals draw on many of the tools of business, such as setting up call centres, mass marketing operations and so on. In some cases, the direct perpetrators of a fraud may believe they are part of a legitimate business, with the designers of the fraud at arm’s length from the victims.

This distancing gives psychological cover for a much larger number of people to participate effectively in fraud activities. The role of underground forums on the internet for exchanging information, tools and specialised services to perpetrate fraud is now well documented8. It tools and markets for the intermediation of cybercrime, these forums also offer psychological support by normalising the fraud process and creating a sense of community for scammers.

There is, to date, a significant shortage of research on scams and scammers that goes beyond the simply descriptive. Focusing both on how to disrupt scammers’ business models and how markers of vulnerability can

Academic research

seems likely that, in addition to providing more efficient

be established – for prevention and safeguarding efforts – are two avenues in which strategies are likely to be developed to combat these socially costly crimes.

is the product of three factors: a supply of motivated offenders; the availability of suitable targets; and the absence of capable guardians 7. The increase in the second and third factors over the last decade is clear.

The internet, with the associated reduction in the costs of mass-marketing, has significantly increased access to potential victims.

Even the most optimistic policing organisations admit to being overwhelmed by the scale of cyber fraud and the lack of resources and expertise to make serious inroads into the problem.

However, another important factor has been the development of psychologically favourable conditions to ensure a supply of motivated offenders. Most of us find it hard to lie to someone’s face in a way that causes harm.

For this reason, successful con artists are rare, often to some degree sociopathic and almost always rely on strategies to distance themselves psychologically from the victim. The more the victim can be distanced, the easier it is to avoid feelings of guilt. Internet fraud comes with an inbuilt distancing strategy.

May 2016

Mark Fenton-O’Creevy is professor of organisational behaviour and associate dean for the Open University Faculty of Business and Law. He is also a member of the True Potential Centre for the Public Understanding of Finance.

References: 1. Whi y, M.T., The Scammers Persuasive Techniques Model Development of a Stage Model to Explain the Online Dating Romance Scam. British Journal of Criminology, 2013: p. azt009.

2. Chong, K. and Tucke D., Constructing conviction through action and narrative: how money managers manage uncertainty and the consequence for financial market functioning.

Socio-Economic Review, 2014: p. mwu020.

3. Willman, P. and Fenton-O’Creevy M., Cultures of Risk, in Risk Management in Financial Institutions, Shojai S. and Feiger G., Editors. 2013, Euromoney: London. p. 124-142.

4. Fenton-O’Creevy, M., et al., Trading on illusions: Unrealistic perceptions of control and trading performance. Journal of Occupational and Organizational Psychology, 2003. 76: p. 53-68.

5. Office for National Statistics. Improving crime statistics in England and Wales. Crime Statistics, Year ending June 2015 2015 [cited 2016 16/3/16]; Available from: www.webarchive. nationalarchives.gov.uk; www.ons.gov.uk 6. Ganzini, L., McFarland B., and Bloom J., Victims of fraud: Comparing victims of white collar and violent crime. Journal of the American Academy of Psychiatry and the Law Online, 1990.

18(1): p. 55-63.

7. Duffield, G.M. and Grabosky P.N., The psychology of fraud 2001: Australian Institute of Criminology.

8. Afroz, S., et al. Honor among thieves: A common’s analysis of cybercrime economies. in eCrime Researchers Summit (eCRS), 2013. 2013. IEEE.

31

HOVERBOARD UK trading standards activity and the global view 2015-16 Sources: Self-Balancing Scooters (Hover Boards) – Initial Reflections, January 2016 Consumer product safety response to hoverboard fires Regulation Impact Statement 18 March 2016

Product safety

The UK problem

hoverboards sold in UK in the run-up to Christmas 2015

assessed as unsafe

Â? confirmed fires so far*

West Yorkshire

Warwickshire

South Wales

m

total value of products intercepted

London

Kent

*UK statistics (based on those available at the time of printing) from the Chief Fire Officers Association (CFOA) and various media reports.

Not all UK fire services submi„ed figures to the CFOA. Stats relate to incidents occurring between September 2015 and April 2016.

UK action: consignments identified

referred to inland trading standards services (TSS)

average cost per product

32

intercepted by TSS working at borders

identified

arrived over Christmas and were referred to inland TSS

May 2016

CREATED FOR

SAFETY CRISIS US

Australia

reports of hoverboardrelated fires

Product safety

Global incidents and actions

house fires (January – March 2016)

states affected

incidents involving smoking, overheating or sparking (November – early March

m

in property damage recorded

(December – February )

ACTION: The United States Consumer Product Safety Commission wrote to hoverboard suppliers, and suggested that noncompliant hoverboards may be seized or recalled

hoverboards were referred to TSS

hoverboards were intercepted by National Trading Standards’ Single Point of Contact

consumers reported hoverboard concerns and incidents  November – February

ACTION: Interim ban on the sale of unsafe hoverboards issued

hoverboards were identified altogether

ACTION: Voluntary product recalls issued by retailers

33

SPOTLIGHT PETER MVEIGH

The

ASSASSIN 34

Words. Carina Bailey Images. Claire Wood

Sitting in one of The Varsity Hotel’s cosier ‘boutique chic’ lounge rooms, Peter McVeigh adds a splash of colour to what is otherwise a grey and dreary morning in Cambridge.

From his cool-blue suit and the maroon-patterned handkerchief in his breast pocket, to the twinkle in his clear blue eyes, McVeigh seems like a character from another time. But don’t let his gentlemanly aura fool you; he is a fierce adversary, even after 50 years in business.

Take his reaction to the recent spate of product-safety crises to hit the headlines as an example. ‘Absolutely crazy’ and ‘disgusting,’ rages McVeigh, in an unexpectedly soft Yorkshire brogue. ‘These people should stand up and be counted and look after the consumer –and damn quick.’

He is referring, of course, to the fires and electrical faults associated with hoverboards and white goods.

Product safety is something McVeigh takes very seriously, believing that companies such as his own – Status International – and trading standards have a common goal: to uphold consumer safety.

Businessman Peter McVeigh, a long-standing supporter of trading standards, talks product safety, hoverboards and Brexit

‘It’s my opinion that people importing things like hoverboards haven’t done their homework properly, and their shipments haven’t been properly checked or technical checks carried out – because those sort of things show up,’ he says. ‘Somebody missed [these problems] somewhere. If they’d done careful quality assurance checks, these would have shown up on any

Spotlight

really cheap, daft prices – we can’t compete with that price; it’s not a level playing field. These are the people product. If there is a mistake that has been overlooked, or something has crept in, these people should stand up and be counted.’

McVeigh adds: ‘A lot of importers don’t bother with their own technical labs – they just rely on test certificates from China. We don’t think that’s good enough. So this is what we do: double check and triple check.’

As is the way with lots of manufactured goods,

McVeigh, an electrical and lighting engineer by trade, has been in lighting all his life. He launched his first company in 1975, and learned that he ‘had to be better than anybody else just to survive’.

This venture was so successful that he sold it to an international company in 1986, but the business went into liquidation when interest rates were at 18 per cent.

Status imports its lighting, heating and cooling products

So, in 1991, McVeigh launched Status International with

from factories in India, China and eastern Europe, while

his son, Nicholas – and, now, he assures me, there isn’t

ensuring its UK operations – from IT systems to the trucks

a major retailer in the country that his company doesn’t

it buys – are all serviced by UK-based companies. The

supply. ‘We insist on only the best-quality product

key difference between Status and many other importers,

possible.’ McVeigh says. ‘We all know it’s possible to buy

McVeigh stresses, is that it opened up its own testing

cheaper and sell cheaper, but then there’s no guarantee

laboratories to keep suppliers ‘on their toes’.

on quality.’

Firms trying to secure business from Status are hardly

Status is developing continually, with not just

in short supply but, says McVeigh, there are a number of

a lighting range, but now also heating and cooling

steps they have to take before Status will even consider

divisions – specialising in fans and heaters – and a

placing an order – starting with a factory visit and

packaging design department.

inspection of their technical procedures. If Status is happy

So what still drives McVeigh? ‘I came from a family

with those, it asks for finished samples, which are then

of 10 kids – a very, very poor family,’ he explains. ‘And I

independently laboratory tested.

thought, I don’t want to be here all my life. That thought

These tests are followed up by Status’ own testing in its UK laboratories, while items it already produces are

still drives me today. It’s that passion for success, and for stability and security for my family.’

batch tested regularly. This is a substantial investment for

In his heyday, McVeigh was a force to be reckoned

the company to make, but, as McVeigh puts it: ‘We have a

with not only in business, but also on the rugby pitch.

major responsibility to the consumer.’

Known as ‘The Assassin’, he was a professional rugby

Such investment in product safety – and its longstanding relationship with trading standards – has resulted in Status building a sound reputation. This, says

league player for Hull and Leeds.

Asked once by a reporter why he was so aggressive, McVeigh replied: ‘It’s the pain in my stomach.’

McVeigh, stands it in good stead when potential new

‘What pain?’ the reporter asked.

contracts crop up. But the fact that other importers are

‘The bloody hunger pain!’ roared McVeigh. Now he

able to sell substandard electrical products – such as LED

says: ‘I have always been driven. Plus there’s my pride – I

lightbulbs – makes him angry.

like to see how the business has grown.’

‘When I see what unscrupulous importers will put on

36

trading standards ought to be chasing.’

In the early days, McVeigh sought out his local trading

the market, cheap LED bulbs with outrageous claims of

standards service for help and guidance with legislation

life and lumen output, with nothing to back it all up – at

and directives. Now, Status’s technical manager maintains

May 2016

purposes, keeping officers abreast of the company’s future plans and product launches. McVeigh hopes the firm has become one that trading standards can rely on, too.

Spotlight

regular contact with the profession for communication

Status has been so engaged with the work of trading standards over the years that it has sponsored the past 21 annual conferences organised by CTSI. ‘We’re now the main sponsor – which shows how we feel about trading standards,’ says McVeigh.

‘I sympathise with trading standards because of the cutbacks – and yet they’re still endeavouring to supply a service, which is all about protecting the consumer, in spite of the cuts.’

McVeigh does believe ridding the profession of duplication is a good thing, however. In recent years, for example, he has noticed the National Measurement

PETER MVEIGH

and Regulation Office (formerly the National Measurement

AGE: Unknown…!

March 2016) conducting checks that he considers to be

LOVES Ballroom dancing and rugby, playing for Leeds Rhinos in his heyday, when he was nicknamed ‘The Assassin’

traditional trading standards’ territory – such as checking

HATES Idleness

in the industry at the moment and it should be more

HUMBLE BEGINNINGS Grew up in West Yorkshire as one of 10 siblings – seven sisters and two brothers. His family is originally from Ireland.

Office, which then became part of Regulatory Delivery in

that lightbulbs on supermarket shelves comply with the relevant EU Directive.

‘They should be measuring, not looking at EU Directives!’ exclaims McVeigh. ‘There is a lot of confusion clear cut.’

ACHIEVEMENTS A er a lifetime in lighting, he was made a Freeman of the City of London in May 2013 CHILDREN Two daughters and a son BREXIT – IN OR OUT? IN We’ve no argument but to stay in. I can’t think of any rational argument why we should exit, but I can think of a lot of arguments why we have to stay in.

Whether we like it or not, we are all Europeans.

We are far be er off being part of Europe than not when trying to influence new, emerging markets, such as China, Brazil and the Americas.

McVeigh describes it as ‘appalling’ that not enough investment is going into trading standards, for services to protect the public properly, adding: I don’t think [trading standards] should be cut any more – I think the government has gone far enough. ’We should be investing more into trading standards, not less, so that they can offer quality, rather than quantity.’

So, what’s next for the self-proclaimed ‘28-year-old who’s never been kissed’? Certainly not retirement, if his energy and zest for life is anything to go by. We look forward to welcoming him to his 21st-sponsored CTSI Conference in June.

37

Back to the Words. Jay Moran Images. Shu erstock

38

May 2016

standards services to a police-style, intelligence-led approach, significantly exacerbated by a succession of severe budget cuts. The has resulted in a significant drop in proactive duties being performed by officers, increased levels of non-compliance and sometimes serious fraud, such as the horsemeat scandal, and the weighbridge and bulk fuel scams.

This shift has also led to a surge in expensive third-party

just about every Floridian and visitor. They include: • Protecting Florida’s livestock, honey bees and crop plants from pests and diseases • Safeguarding consumers from unlawful and deceptive business practices • Ensuring weights and measures equipment and transactions are accurate

assurance auditing bodies replicating and replacing our work

• Analysing more than 15,000 food samples each year The Bureau of Standards alone is responsible for conducting

on one side, and earned recognition schemes that lessen our

inspections at more than 25,000 retail and wholesale facilities

impartial statutory impact on the other. Also, those officers

and inspecting some 260,000 commercial measuring devices.

still in post, who do manage to perform regular duties, are

From the start, I noticed interesting differences between

likely to become deskbound, forced to navigate complicated

our two systems, such as how the state had independent

referral protocols when sending information to the ever-

authority to implement its weights and measures programme

increasing number of competing interested parties.

and the level of importance attached to it, how it financed

With these issues in mind – and as an officer in midcareer, out in the field daily – I felt compelled to investigate how similar activities are delivered in another country.

That country was the USA – more specifically the

itself, and how it dealt with enforcement issues. I was suitably impressed – and a little envious.

On our first day, Bureau of Standards chief Matt Curran explained how some states and the National Institute of

sunshine state of Florida. Thanks to a bursary from the

Standards & Technology had opted to work to uniform

College of Fellows, I found myself heading across the

legislation and standards. Within NIST there is an Office

pond in August 2015 to spend two weeks learning how the

of Weights and Measures that oversees regulation across

Florida Department of Agriculture and Consumer Services

participating states and which, in turn, partners with the

(FDACS) works; I was accompanied by Denbighshire Trading

National Conference on Weights and Measures.

Standards colleague Ian Reader, who financed himself.

During our trip, we spent time with FDACS’ Division of Food Safety, its Office of Agricultural Law Enforcement, and Division of Consumer Services, which includes the Bureau

This national conference of stakeholders offers legal and technical improvement sessions, such as the maintenance and publication of weighing and measuring standards.

Verifications are typically performed by government

of Standards. These divisions enable FDACS to support

officials, such as FDACS in Florida, with civil and criminal

and promote Florida’s agriculture, protect the environment,

sanctions used as part of the enforcement toolkit. Typically,

safeguard consumers and ensure the wholesomeness and

inspections are conducted at least once a year and officials

safety of food. It comprises 18 divisions and offices, with

respond to complaints between inspections.

programmes and activities so varied that they touch the life of

Private registered service agencies are used in at least

future May 2016

Weights and measures

In recent times, there has been a shift within UK trading

Learning metrology and food safety lessons from the sunshine state

39

Got a best practice story to submit to TS Review?

Then email it to tsreview@tsi.org.uk

RECOMMENDATIONS

43 states and have to register with the state in which they

Weights and measures

operate. Some states require agency staff to undertake annual

Weights and measures

Systematic review of weights and measures (W&M) delivery and functions – including possible regionalisation/ nationalisation of service – and charge for local authority (LA) delivery Require W&M equipment to be registered with LA, region or national system Require registration to be conspicuously displayed near equipment Charge for registration of individual devices, which covers periodic inspections Introduce civil penalties for non-registration Sale-of-fuel taxation to contribute to W&M inspection activities Remove announced routine inspections Create a UK chief W&M inspector Introduce national or regional calibration labs, which co-ordinate and/or loan/hire out equipment/ inspectors Review trading standards officer qualification/ practitioner status to require all statutory qualifications

Food departments:

40

Require food businesses to be ‘permiˆed’ before commencement of business Charge for food business permits Require food registrations to be visible in premises Set up protocol for consistent sanctions and enforcement Reduce regulatory burdens for small businesses and coˆage producers at home

training and they are allowed to repair, recalibrate and place devices into services. At least two states let agents perform official inspections, albeit with state oversight, which is considered essential. Licences can be revoked or suspended.

Fees are charged for the registration of weighing and measuring devices and the licensing for fuel measuring equipment – now a vital part of FDACS’ income generation.

Fees are on a sliding scale, and depend on the number of devices and their location. Income towards the inspectorate for fuel measuring equipment is collected through a fuel tax.

Business and consumers accept this as a regular part of their regulatory responsibility and compliance rates are high.

In a jam-packed two weeks, I undertook a comprehensive series of visits across the whole state, including: a dairy and seafood packer; food waste recycling plant; bulk fuel depot; petrol station; retail warehouse; and two food retailers. I also attended the four-day annual Bureau of Standards Inspector Workshop Conference, where I gave a keynote speech.

The Florida systems appear to work well, and I often said to my hosts that if someone were to design and implement the perfect service from scratch, it would be theirs.

Interestingly, the UK system – before systematic review, change and reduction – was like this. The two systems probably diverged because in the UK we failed to secure an To find out more about the opportunities available through the College of Fellows’ bursary scheme, how to apply and for the full-length version of this report, visit www. tradingstandards.uk

effective revenue stream to properly fund our activities.

In many ways, my Floridian experience felt like going ‘back to the future’ – during my own career I can recall a well-resourced service with an abundance of highly skilled officers. Unfortunately, I cannot see how it would be possible to replicate FDACS’ systems in the UK, especially in terms of introducing fees for weights and measures activities and food safety, yet it could be argued that these austere times offer the perfect opportunity for more modern, dynamic approaches.

Maybe – if the profession unites to demonstrate its important role in society – that change could be possible. Scotland is already making use of fixed penalties for regulatory enforcement. Only time will tell.

The College of Fellows’ bursary has given me a remarkable – and privileged – opportunity to experience how overseas regulatory activities are delivered, and my aims and objectives were surpassed. The Floridian systems are of the highest order and should certainly be admired and celebrated. Long may our new relationship continue.

Jay Moran is a chartered trading standards practitioner at Cheshire East Council’s Trading Standards Service.

May 2016

PROFESSIONAL DEVELOPMENT WITH TS REVIEW Members of CTSI and other professional bodies are required to maintain their professional competence throughout their careers.

Continuing Personal Professional Development (CPPD) means the systematic maintenance, improvement and broadening of your knowledge and skills, and is therefore a long-term commitment to enhancing your competence. CPPD is a requirement of CTSI. TS Review is pleased to offer a free CPPD module in each issue. Simply study the module and complete the questionnaire on the final page, following the instructions for its submission.

Product recalls: a recap

One of the last major changes to product safety legislation was the introduction of product recall procedures under General Product Safety Regulations 2005 (GPSR). They state

CPPD

If you have any questions, please email training@tsi.org.uk

that a recall is any measure aimed at achieving the return of a dangerous product already supplied or made available to

What to do when dangerous

consumers (regulation 2 (1)).

products enter the supply chain

required only to put products that are safe on the market.

Producers and distributors of goods in the UK are If they become aware either that a product they are trading is not safe, or there is any associated risk, they should notify their local authority and institute corrective action. If the risk may cause serious injury, damage or death, the unsafe

Words. Christine Heemskerk Images. Shu erstock

product should immediately be removed from sale, or recalled in some way – which might involve a modification, repair or other process that removes the potential harm.

Industry – which includes manufacturers, importers and distributors – is required to make checks to ensure consumer products are safe.

So, what should an officer do if they came into work one day to a complaint about a dishwasher that has started to emit smoke? This is potentially an unsafe product for the purposes of the Electrical Equipment Safety Regulations 1985, which are made under the Consumer Protection Act (CPA) and could require immediate action to be taken, such as issuing notices under either the CPA or the GPSR. As a first step, it would be necessary to establish the make, model and serial number of the dishwasher and to clarify – as far as possible – from the complainant the exact circumstances of the fire. Details of where and when the item was purchased should also be obtained. As most white goods are manufactured by companies that have home

May 2016

41

CPPD

authorities (HA) or primary authorities (PA) in the UK, the best action is to immediately inform the HA/PA and allow it to decide the most appropriate corrective action.

It may be prudent for the local authority – as an interim measure – to visit the retailer from which the consumer purchased the dishwasher and see if that model is still on sale. If so, a suspension notice temporarily prohibiting any further supply under the Consumer Protection Act could be issued against the retailer, as there would be reasonable cause to suspect a breach of the Electrical Equipment Safety Regulations. The retailer would then also have a duty to notify their supplier of the issue.

The next steps undertaken by the PA/HA may vary.

It may be that the PA/HA needs more information about the cause of fire, for instance, so will require further liaison with the originating authority. Or the incident may be a one off. In any event, the PA/HA will then liaise with the company involved to assess the most appropriate corrective action. The most appropriate measure may be a recall, but recall is a measure of last resort and usually only as a result of a serious risk.

The responsibility for a recall usually falls to the producer, with assistance from distributors. When carrying out a recall, the purpose is to: • Minimise the risk of injury to users • Minimise the cost and inconvenience to consumers and the company recalling the product • Comply with the law and limit any potential liability • Protect the company’s reputation and brand image

to the company?

• Whether recall insurance is available – the DTI report, Product recall research, released in April 2000, gave the average cost of the recalls studied as £39,000 So, why are there so many delays, and why are so many

While the requirements of the process are quite tightly

products not being recalled but left to pose a hazard in

defined by regulation, the actual mechanics are not defined.

the home? What does the law require – to recall or not

Some industries, such as the pharmaceuticals industry,

to recall? The decision to recall needs to be based on

and some trade associations, such as the Association of

risk assessment. The EU has created some uniformity

Manufacturers of Domestic Electrical Appliances, have

by introducing the risk assessment model Commission

developed their own procedures, but many do not have any

Decision 2010/15/EU. This offers a transparent and

procedures at all. This has led to a lack of consistency in

practicable method for member states to apply. In practice,

the recall process and is a major factor in the independent

this means obtaining accurate information about the

review undertaken recently by Lynn Faulds Wood on behalf

problem and assessing the level of risk – whether it is low,

of the Department for Business, Innovation and Skills (BIS).

medium, high or serious. To do this, you need to assess:

When setting up a procedure, a company should consider the following: • Are traceability systems in place for components and finished goods?

• Are products identifiable by batch number?

• Are complaints being monitored so that safety problems are picked up at an early stage?

• What information is being received by the company,

42

and how can this information be passed more quickly

• What is the hazard?

• What is the likelihood that the hazard will lead to injury, or damage property or the environment?

• How serious might the injury or damage be?

• Who might be injured or what might be damaged?

The company needs to understand: • The number of potentially faulty products it has sold • The length of time the product has been on the market

May 2016

CPPD

CURRENT RECALL SYSTEM – EXPERT VIEW Why are there so many delays, and why are so many products failing to be recalled when they still pose a hazard in the home? What does the law require – to recall or not to recall?

As previously noted, the legal framework around recalls is recognised to be robust and well constructed, so why does the UK consumer product recall – an independent review by Lynn Faulds Wood find that the product recall system in the UK is not working as well as it should?

I believe there are many factors. Austerity and savage cuts mean local councils are increasingly reluctant to prioritise – and fund – market surveillance at local level, so enforcement authorities struggle to do their jobs.

Departments have been decimated, o en losing very experienced officers. As a result, businesses don’t take this issue seriously enough.

• The number of consumers still likely to be using it • The type of consumer using the product • The age of the product So, in the case of the dishwasher, all this information needs to be considered. Additionally, if the risk is a serious one, a RAPEX* notification must be made to BIS via the PA/HA as soon as possible; this will be passed on to the Commission for publication on the RAPEX website.

What if voluntary action is not sufficient to remove the hazard to consumers? The 2005 Regulations give local trading standards authorities the power to issue a recall notice. To issue a notice, an enforcement authority must have reasonable grounds for believing that a product is dangerous. The authority can then require the person against whom the notice is served to use reasonable endeavours to organise the return of that product.

The notice may require the recipient to: • Contact consumers to inform them of the recall, if practicable • Publish a notice • Make arrangements for the collection or return of the product, or for its safe disposal Recalls are a measure of last resort, and recall notices are only to be issued where:

May 2016

Even well-known brands are now causing problems.

Many fires in household appliances can be a ributed to design faults, such as the use of flammable material in fridge freezers. Other domestic appliance fires are caused by faulty components.

Finally, there isn’t a widespread culture of information – sharing between businesses and other public bodies. They are not cooperating with trading standards to manage the risks. One example in Faulds Wood’s review was that a company had cited ‘commercial confidentiality’ and ‘insufficient evidence for a recall’, which was contrary to the reality.

As the review points out, lack of evidence of injury is a real issue – without it, it can become difficult to argue that a product is posing a serious risk. There is an urgent need to re-introduce a national injury database.

So, I agree with Faulds Wood’s first recommendation: there is a need for the creation of an official national product safety agency or ‘centre of excellence’ to show leadership and coordinate the system, and to produce detailed guidance on product recalls.

There is an urgent need to examine – nationally and regionally – how market surveillance of consumer goods should be organised and funded as, at present, the lack of nationally coordinated market surveillance means the UK could be at risk of not fulfilling its EU market surveillance responsibilities.

43

CPPD

• Other actions would not suffice to prevent risks • Action being undertaken by the producer is unsatisfactory • The enforcement authority has given the person not less than seven days’ notice of the authority’s intentions to issue a recall notice, and that person has not required the authority to seek the advice of the Chartered Institute of Arbitrators (CIA) The CIA will determine: • Whether the product is dangerous • Whether a recall is proportionate Where the producer cannot be identified, or has failed to comply with the notice, an authority itself can take recall action and recover costs as a civil debt. Note that compensation is payable where a recall notice has been issued and the product is not dangerous.

Finally, it may be appropriate to use the media.

Regulation 39 of the GPSRs deals with making information available to the public. It requires enforcement authorities to publish safety information, with some restrictions in respect of professionally secret information. It also makes information that is obtained under the Regulations subject to Part 9 of the Enterprise Act (restrictions on disclosure of information) and enables information subject to Part 9 to be disclosed for the purposes of enforcing these Regulations.

Footnote *RAPEX is Europe’s Rapid Alert System for non-food dangerous products, which facilitates the rapid exchange of information between 31 countries’ national authorities and the European Commission, on dangerous products found on the market.

Christine Heemskerk is a CTSI lead officer for consumer and product safety and an independent trading standards consultant.

MAY

MODULE PRODUCTS RECALLS Boost your personal and professional development by completing this short questionnaire – worth one hour of CPPD. Answer the questions listed below at www.tradingstandards.uk/cppdtest

1. Are importers responsible for the safety of products?

2. Do the General Product Safety Regulations stipulate how to undertake a recall?

3. Is a recall required for all non-compliant products?

4. Does the decision to recall depend on the level of risk?

5. Should Commission Decision 2010/15/ EU be used for risk assessment?

6. Is risk a balanced combination of a hazard and the probability that harm will occur?

7. Do local authorities have the power to undertake a recall?

8. Should voluntary measures be considered first?

Applicants who complete the module successfully will be given a certificate. The test must be taken before 22 July 2016.

44

Module 5 answers (February 2016): 1. No – they have a much wider remit over brand protection, which includes ambush marketing, unauthorised associations, counterfeit tickets and ticket touting 2. No – there is a host of legislation to enforce, including the Copyright, Designs and Patents Act 1988, and the Consumer Protection from Unfair Trading Regulations 2013 3. Yes – there is an exemption for the distribution of this type of material under the Environmental Protection Act 1990/Clean Neighbourhoods Act 2005 4. No – they are allowed to trade throughout the UK. During the Rugby World Cup there were pedlars from all over the country, including Essex, London, Leeds, Leicester and No ingham 5. Yes – there has been a significant reduction in seizures thanks to advice before events 6. No – to date, only the Olympics has had its own specific legislation to protect intellectual property rights 7. No – only resale of tickets for football matches and tennis at Wimbledon are prohibited by the Criminal Justice and Public Order Act 1994 8. Yes – experience has shown that there is as much abuse of legislation at the end of an event as there is before the event starts.

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generally good, but with the increasing complexity of the

any point in the supply chain – in the retail of electrical

supply chain comes traceability issues, which can have

products. Consultancy services include risk assessment,

significant – indeed, tragic – outcomes.

product testing, sourcing and buying processes, as well

Last Christmas’ ‘must-have’ item, the hoverboard, was sold by various reputable retailers, which had to

as product safety training.

Most recalls are only 10-20 per cent effective and in

rapidly recall them after a number burst into flames.

addition to the risk they pose to consumers, they can

However, our research indicates that millions of unsafe

obviously have a detrimental impact on a company’s

units remain in people’s homes, despite being subject to

bottom line.

a product recall.

Electrical Safety First

Words. Martyn Allen // Images. Shu erstock

Not surprisingly, many smaller organisations don’t have the in-house resources or expertise to ensure they

‘We believe the current recall system is not fit for purpose… most recalls are only 10-20 per cent effective’

keep on top of regulatory changes and due diligence – something made more difficult given that standards are unable to keep pace with new technology products.

Product recalls and safety issues can arise for even the largest, most safety conscious businesses.

We believe the current recall system is not fit for purpose. But, as the recent government review of the system for the recall of unsafe consumer products has indicated, the problem is not with the legislation itself, but with its enforcement and the need to improve communication around recalls. During this period of financial austerity, trading standards is punching well above its weight with reduced resources, but we at Electrical Safety First believe our expertise can also

Hoverboards, the musthave Christmas present in 2015, pose a serious safety risk to consumers

May 2016

help ensure safer products for consumers and better processes for business.

Martyn Allen is Electrical Safety First’s head of electrotechnical.

45

INOUT? OR

What the EU Referendum – and a potential Brexit – might mean for trading standards

Words. Miles Benne and Denis Barry Images. Ge y Images

46

May 2016

On 23 June this year, the UK will vote on whether to stay in or leave the EU. At a time when both camps threaten dire consequences if the other side wins, it’s worth reviewing how trading standards and the enforcement of legislation might be affected if we all wake up on the morning of 24 June 2016 to find that Brexit has won the day.

For those of us who think police officers and trading standards officers (TSOs) are looking and getting younger, it seems like only yesterday that the ‘metric martyrs’ were claiming that the imposition of EU directives amounted both to an unwarranted intrusion into our way of life, and a challenge to parliamentary sovereignty.

‘Why,’ it was asked ‘should we be doing away with weights measured in pounds (lbs) and ounces (ozs)?’

For readers too young to remember that moment, the UK was required to implement Directive 80/181 EEC (as amended). Among other things this meant that, by the end of 1999, the weighing and sale of fruit and veg on market stalls – in lbs and ozs alone – became outlawed.

There were letters to The Times, The Daily Telegraph and the Daily Mail. The residents of Tunbridge Wells were outraged. Middle England felt that a way of life was threatened. For some it felt like the beginning of the end of the world.

When some traders failed to comply, prosecutions were initiated. Sunderland City Council’s prosecution of Steve Thorburn led to a conviction in April 2001.

He appealed, with others, to the Divisional court, but his conviction was upheld. (See Steve Thorburn v Sunderland City Council [2002] EWHC 195 (Admin).

SO, WHAT WOULD BE THE EFFECT, IN LAW, ON EU DIRECTIVES IN A POST BREXIT BRITAIN? …

NOT MUCH! May 2016

In R v Budimir (Nikolas) Interfact Ltd v Liverpool City Council [2010] EWCA Crim 1486, the Criminal Division of the Court of Appeal decided that, although the government had not complied with notification requirements under Directive 83/189 before implementing the Video Recordings Act 1984 (VRA) and related regulations, existing convictions under the Act were nevertheless valid.

From the Bar

JUDGMENT OF THE LORD CHIEF JUSTICE

Lord Lane, the then Lord Chief Justice of England, began his judgment thus: ‘The contentions advanced on behalf of the applicants

by Lord Pannick QC and Mr Nigel Peters QC involve the seemingly startling proposition that, notwithstanding the respective applicants’ undoubted guilt, a conviction recorded on the basis of a statute enacted by our sovereign parliament must be quashed because of an adventitious failure by the United Kingdom government, before its enactment, to comply with a Directive from the European Community (the Technical Standards Directive, Directive 83/189 EEC [the Directive]).

For AV Dicey, and generations not only of judges and lawyers, but the community at large, such a proposition would have appeared to be a constitutional impossibility.

47

From the Bar

…‘Faced with the submissions advanced on behalf of the applicants, the answer offered by previous generations would have been that the argument was nonsense. Whether we like it or not, that comfortable course is not available to us… Thus, the issues raised in these applications must be addressed by reference to European Union Law (EU law) and not, save to the extent that EU law has been incorporated into domestic law, to constitutional principles which pre-date our entry into the European Communities. In summary, section 2(4) of the European Communities Act 1972 prohibits the application domestically of statutory provisions, which are inconsistent with directly applicable Community law.

It is therefore not open to us to ignore EU law.

Parliament has obliged us to apply it, even if the effect may be to render an Act of Parliament unenforceable.’

EU Directives post-Brexit So, what be would be the effect, in law, on EU Directives in a post-Brexit Britain? The answer is: ‘Not much!’ The reason for this is pretty straightforward – although it’s often overlooked – especially by the general public.

An EU Directive, when passed, gives member states a specific date by when the provisions of the Directive are to be enforced by domestic law (‘giving direct effect’).

In the UK, this is achieved either by the passing of primary legislation (Act of Parliament) or secondary legislation by the relevant secretary of state (statutory instrument).

It is the domestic legislation that creates the criminal

The Court of Appeal, in dealing with the VRA, held that there was no injustice against any of the applicants in upholding their convictions because:

offences and penalties in the UK, not the EU Directive.

They had deliberately performed the acts prohibited by the VRA ● There was nothing to distinguish the applicants’ actions from anyone else who had been convicted under the VRA ● Their actions contravened the provisions of properly enacted primary legislation

that the UK votes to leave, all Directives enacted by UK

●

48

IT IS THE DOMESTIC LEGISLATION THAT CREATES THE CRIMINAL OFFENCES AND PENALTIES IN THE UK, NOT THE EU DIRECTIVE

In theory, the UK could decide not to introduce an EU Directive. Such a decision would put the UK in breach of its EU Treaty obligations, but a Directive does not, by itself, create criminal offences in the UK. In reality, if the outcome of the EU Referendum is domestic law – and all the criminal offences and penalties created by those domestic laws – will remain in force until such time as parliament chooses to repeal them.

Convictions pre-Brexit for offences repealed post-Brexit ‘But’, some people ask, ‘what will happen to convictions for offences repealed in a post-Brexit landscape?’ A further trip down memory lane can supply the answer to

May 2016

this using – as illustration – the Video Recordings Act 1984.

When the Act was first brought in, there was a legal obligation to notify the European Commission under the EEC Technical Standards Directive 83/189/EEC – or Directive 98/34 as it is now known. This was because the Video Recordings Act 1984 (VRA) had the effect of creating trade restrictions within Europe, by banning imports of unclassified films into the UK. Member states were entitled to do this, but they were obliged to notify the EEC (now the EU) within a suitable timeframe.

Quite how the UK government failed to notify the European Commission has always been a bit of a mystery, especially as the Act was introduced by a Conservative MP’s private members bill, in an attempt to censor ‘video nasties’. But fail they did… and the failure was not spotted until 2009. The VRA had been in force since 1985.

There had been numerous prosecutions and convictions during this 24-year period, and many of those convictions had been as a result of proceedings instituted by trading standards authorities.

It is the last point in the Court of Appeal decision (see box, ‘Judgment of the Lord Chief Justice’) that answers the ‘Brexit question’. Whichever way the UK votes on 23 June, for an offence to disappear from the statute book it would need to be repealed. But the fact that it was repealed would not affect the validity of a conviction for an offence committed while that law was in force.

This applies whether the law in question was brought into force in the UK as a result of an EU Directive, or as a result of purely domestic legislation.

So, what would Brexit mean for trading standards?

In the short term, not a lot. All the legislation lawfully passed would remain in force until such time as parliament chose to repeal it. Convictions for offences – under the law of the land at the time – will be upheld.

Miles Benne and Denis Barry are barristers at 5 Paper Buildings legal chambers.

May 2016

Who knows which way the UK will vote on June 23?

If the recent General Election and Sco ish referendum are anything to go by, the pollsters certainly won’t.

At the time of writing it’s too close to call. But everyone knows someone who, at every opportunity, will complain about the EU, its interference in our daily lives and the creation of ‘ridiculous laws’.

From the Bar

WHAT SHOULD GO IN A ‘POSTBREXIT’ WORLD?

So here’s an opportunity for you to nominate a law – brought into force in the UK by an EU Directive – that you would change, and why?

One example – the Directives leading to the banning of the old fashioned, humble light bulb – has raised one of the authors of this article to levels of incandescence only surpassed by the news that – having finally got used to halogen bulbs – they’re now for the chop, too.

Please send your suggestions to clerks@5pb.co.uk by 6pm on 17 June. Authors Denis and Miles will pick their favourite and award a bo le of champagne to the winner, whose name will be announced at 5pm on the CTSI Conference main stage, on Wednesday 22 June.

The authors’ decision will be final… In the past, we might have been open to the most outrageous a empts to influence our decision; however, the Bribery Act 2010 put paid to that – but perhaps that would best be dealt with in another article.

49

1

Any customer can have a car painted any colour that he wants – so long as it is black

2 I am convinced that

Downtime

He [God] does not play dice FIVE GREAT‌

quotes from the 20th century Each issue, TS Review will present you with five quotes that captured a mood,

3

It’s not the men in my life that counts – it’s the life in my men

4

The great nations have always acted like gangsters, and the small nations like prostitutes

5

Source: members.tripod.com/ mr_sedivy/quotes21.html

50

Mystery creates wonder and wonder is the basis of man’s desire to understand

Picture credits: Cover and page 20: untitled / Shu erstock. Page 6: Happy Stock Photo / Chones / Shu erstock. Page 7: Dima Sidelnikov / Shu erstock. Page 8: Radovan1 / Shu erstock. Page 11: Aleks Melnik / nikiteev_konstantin / Tropinina Olga / Shu erstock Page 12: Niklas Halle’n / Ge y Images. Page 14: Barton Gellman / Ge y Images. Page 18: retrorocket / Shu erstock. Page 26 and 28: NMarty / Shu erstock. Page 38: Jorg Hackemann / Shu erstock. Page 41: dantess / Shu erstock. Page 42: krrowl48 / Shu erstock. Page 46: Gary Waters / Ge y Images. Yulia Buchatskaya / Shu erstock.

Page 42: Hein Nouwens / Aleks Melnik / AVA Bi er / xenia_ok / Shu erstock.

ANSWERS: 1) Henry Ford 1863-1947 2) Albert Einstein 1879-1955 3) Mae West 1892–1980, I’m No Angel 1933 4) Stanley Kubrick 1928–1999 5) Neil Armstrong 1930–2012

set a tone or were simply awe-inspiring. But who said what?

www.businesscompanion.info Business Companion - a new information resource for business.

This government sponsored information website provides free impartial legal guidance to help business owners untangle what is sometimes a complicated and confusing world of trading standards and consumer protection legislation.

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“

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”

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Consumer Affairs & Trading Standards Conference & Exhibition 2016 #CTSICONF

The leading consumer affairs & trading standards event in Europe The International Centre, Telford Monday 20 June - Thursday 23 June 2016

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Join in our topical plenary debates...

Tuesday 21 June Question time with Leon Livermore A panel of experts discuss the hot topics of the day, with questions from the floor.

Wednesday 22 June Raising standards with Matt Allwright Conference will investigate the various approaches to raising standards in products and consumer care in business.

Thursday 23 June Public health, wellbeing and sustainability with Victoria Macdonald Conference asks where the responsibility for our health and wellbeing lies. Do government cuts mean that regulators have to think differently and work with businesses and communities to empower individuals?

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