Unfair Contract Terms

Oral Answers to Questions — Trade and Industry – in the House of Commons at 12:00 am on 5 February 1998.

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Photo of Mrs Diana Organ Mrs Diana Organ Labour, Forest of Dean 12:00, 5 February 1998

What action she is taking to tackle unfair contract terms in consumer contracts. [25689]

Photo of Nigel Griffiths Nigel Griffiths Parliamentary Under-Secretary (Competition and Consumer Affairs), Department of Trade and Industry

On 26 January, I issued a consultation paper on proposals to strengthen consumer protection. We proposed that, for the first time, a range of bodies representing consumer interests, including the Consumers Association, trading standards officers and the utility regulators, will have power to take action in the courts to stop the use of unfair contract terms.

Photo of Mrs Diana Organ Mrs Diana Organ Labour, Forest of Dean

I congratulate my hon. Friend on taking that important new initiative. Will he confirm that the change in the regulations will make life much tougher for the rogue trader and improve consumer standards, which will be widely welcomed by consumers?

Photo of Nigel Griffiths Nigel Griffiths Parliamentary Under-Secretary (Competition and Consumer Affairs), Department of Trade and Industry

Consumers will indeed benefit considerably if more bodies are empowered to act. Widening the scope for ction will provide consumer bodies with a powerful weapon to tackle unfair contract terms. The 1994 regulations were deliberately framed to block such action.

Photo of Mr David Chidgey Mr David Chidgey Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Trade and Industry)

Is the Minister aware that there is growing evidence that the new licensing arrangements introduced by Ofgas to protect consumers from predatory selling and enforcement of contracts by the various gas supply companies are not working? To give just one example—I hope that he is aware of it, but he can tell me if he is not—recently, in the Eastleigh area, where this is becoming current practice, an elderly person with cataracts who is blind was conned into signing a gas contract which he thought was a request for further information. There have been dozens of such examples in the past three or four weeks and they clearly show that the new regulations are not working. Will the Minister assure the House that he will take action to bring predatory selling of these contracts and protection of the consumer to the fore as soon as possible.

Photo of Nigel Griffiths Nigel Griffiths Parliamentary Under-Secretary (Competition and Consumer Affairs), Department of Trade and Industry

I know that the hon. Gentleman and certainly Labour Members will welcome the action that has been taken since the election to ensure that, for the first time, after years of most blatant mis-selling, conditions on selling and mis-selling are included in the licence. If that should prove not to be adequate—evidence has been coming in only during the past few days and weeks—we shall revisit it, and primary legislation cannot be ruled out.