Cancellation rights save consumers millions

Friday 4th May 2012

Recommendations by the Office of Fair Trading to improve cancellation rights have saved consumers about £8.5million a year in doorstep sales.

An independent evaluation by GHK Consulting looked at the impact of the OFT's 2004 market study into doorstep sales. The study focused on legitimate rather than "rogue" or "bogus" doorstep traders.

Following the study and OFT recommendations, the Government introduced the "Cancellation of Contracts Made in a Consumer's Home or Place of Work etc. Regulations 2008".

The Regulations require that any consumer entering a contract following a doorstep sales visit is given written information on both cancellation rights and cooling off periods and extend cancellation rights to cover purchases made following any such visit, whether the consumer has asked for it or not.

The £8.5million saving represents the value of purchases cancelled by consumers that would not otherwise have been cancelled without the new protections.

Following the study, the OFT also encouraged industry to improve transparency on prices and to provide written quotes so that consumers have the information they need to make purchasing decisions.

This information has been included in the consumer codes of both the Direct Selling Association and British Healthcare Trades Association. Both codes are approved by the OFT under its Consumer Codes Approval Scheme and continue to be monitored to ensure that members comply with the requirements.

Consumers surveyed for the evaluation said that the ability to cancel unwanted purchases had improved their confidence when buying on the doorstep. This increase in consumer confidence is estimated to have boosted doorstep sales by about £57million a year.

The report also estimates the total value of doorstep sales in the UK rose to about £4.7billion in 2010.

Concerns are raised, however, over doorstep selling practices that have not shown improvement, particularly the use of high-pressure tactics in sales of home repairs and mobility aids.

Common practices cited by consumers include price discounting on the condition that the consumer purchases the product on the same day as the doorstep visit, and an unrealistically high initial price followed by discounting.

Amelia Fletcher, OFT Chief Economist, said: "This report shows that strengthened cancellation rights and better information have had a positive impact on doorstep sales, but consumers should remain on their guard.

"High pressure sales tactics are an ongoing problem and consumers should give themselves time to shop around and look for traders displaying an OFT Approved code logo."

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Mike Jones