HC Deb 30 March 1973 vol 853 cc1797-806

4.5 p.m.

Mr. Peter Rost (Derbyshire, South-East)

I am most grateful to you, Mr. Deputy Speaker, for giving me the opportunity of raising what I regard as the most important subject of the continuing unsavoury activities of certain businesses which claim to publish or actually do publish so-called trade directories.

Just about two years ago the House passed the Unsolicited Goods and Services Act, one of the intentions of which was to stamp out a great deal of the activity which was then taking place by these so-called inertia-selling bogus directory firms. They took cover, but unfortunately, I have to inform the House that they have now resurged. Not only have they resurged but they are proliferating, and I believe that their activities now are far more widespread and on a larger scale than they were before the Act was passed.

Of course, the names of these companies that are operating the racket have changed over the last few years. Some of them are more "with it" in their names. I will list just seven of which I have some information, but I can assure the House that there are many more operating throughout the country. They are: the Common Market Trade and Business Register; the National Business and Professional Trades Directory; the Classified Regional Trades Guide; the Classified Area Trades Guide; the International Trade Telex; the UK Classified Telex; the UK Classified Trade and Commerce Directory.

That is a sample, and most of them are published by different organisations. Their names vary as their publishers are independent, but their distasteful business practices are very similar in pattern. The pattern is that they are all unsolicited in the sense that the organisations send out to many hundreds of thousands of small traders as well as large businesses documents which purport to be invoices, and which many people mistake as invoices, although they are not strictly invoices. These documents are usually sent through the post without any prior introductory letter explaining what service the directory is intending to provide. They are deliberately intended to solicit cash from traders and, although the organisations comply to a large extent with the legislation passed by this House, they have found a convenient loophole in that legislation.

The National Business and Professional Trades Directory, for example, gets round the Unsolicited Goods and Services Act by putting on its so-called invoice: This is not a claim for payment Of course, this is in small type, but on the carbon copy of the invoice it says " Please return with remittance", and that appears in heavy type. The remittance requested is £10.50. These unsolicited invoices, or apparent invoices, are often followed by personal visits by representatives who claim payment pretending that the invoice was requested and that the entry was desired when it was not.

On none of the stationery of these firms have I seen included the names of any directors, although addresses are included. The address of the National Business and Professional Trades Directory would be enough in itself, I should have thought, to arouse the suspicion of most people. It is: 13 Royal Parade (rear of), Blackheath, S.E.3.

If my hon. Friend the Minister believes that the ordinary tradesman and business person will not be so easily deceived and is a fool if he parts with his money, I can assure him that many thousands of unsuspecting people are being conned by these organisations in spite of the inclusion on the invoice of words to the effect that it is not a request for payment.

The activities of these businesses are widespread and are festering all over the country. I wish to point out that I have no personal vendetta against this unsavoury activity simply because my wife was conned some time ago in her hairdressing business by one of the organisations and had to make payment because an assistant had inadvertently signed one of these invoices. I have no personal animosity. I have an obligation to draw attention to the very wide abuses taking place throughout the country. Some of my colleagues had earlier put down an Early Day Motion relating to activities in the Ipswich area where one of these businesses is causing widespread abuse. I have had a number of complaints from my constituents and from other parts of the country, all giving evidence of these activities and of how some people have been deceived into signing and subsequently paying.

The size of this activity should not be under-estimated. I have some evidence about one of these companies, the National Business and Professional Trades Directory. One invoice issued by this company was dated 29th January and had the reference number 0458. Obviously the firm was only then starting up. An invoice was received, in another part of the country, dated 19th February and with the reference number 82,965. This, I suggest, is evidence that at that time over 82,000 invoices had been ditributed. This amounts to soliciting for cash amounting to nearly £1 million. Assuming that only 10 per cent, of the recipients of the invoices responded, the fraud is still substantial

I received a letter from a constituent in Long Eaton which serves as an example of a different set-up. The constituent wrote: Last autumn my husband, a plumber, received a document requesting him to sign, if the details of his name, address and phone number were correct. He did so. The document looked very much like the sort of thing the GPO might send out with a small space on the top right-hand corner marked ' For Post Office use only ' A few weeks later I answered the door to a woman representative who asked for payment and told me that my husband had signed to the effect that he wanted an entry in their directory. He did not. Of course, the constituent's husband did not want an entry.

The constituent wrote to the publishers, Area Trades Directory Limited, Hilling-don House, Kenton Road, Harrow. The Minister, who I hope will be able to make a helpful reply, will be interested in this address which is, so to speak, in his home country. In the reply the firm said: We are a reputable publishing company, with a considerable number of county publications, including an established publication for your own area, in issue since 1968, and well known in Leicestershire, Derbyshire and Nottinghamshire ". Naturally I felt that I should see whether that was substantiated, and I have made extensive inquiries. I find that this publication is not known— although the company claims that it has been in wide circulation since 1968—in the Long Eaton public library or in the reference libraries of the Long Eaton Advertiser, the Derby Evening Telegraph and the Nottingham Evening Post. Nor is it known in another area that I have sampled, where these invoices have been distributed, in the Hemel Hemp-stead-Berkhamstead-Tring area. I have also made further inquiries among the chambers of commerce in the area. They have not seen this publication. The glossy notepaper on which this is distributed is not evidence of a reputable organisation since no one seems to have heard of it. Nor can one identify the signature on the letter.

The letter carries the crest of the Greater Harrow Chamber of Commerce. I thought that this was rather curious, an apparent attempt to add respectability and credibility to the organisation. I wrote to the Greater Harrow Chamber of Commerce to ask whether it knew anything about Area Trades Directory Ltd. of Harrow. It said that it had no information at all about the firm. It continued: As regards the firm using our crest on their letter-headings, this is a service that we offer to members should they wish to avail themselves of it. I maintain that this is a deliberate attempt to give the impression that this was a respectable organisation and thus an attempt to deceive the public.

I refer now to another of these organisations, the U.K. Classified Trade and Commerce Directory. This is published by Messrs. Brandon Publications of 369 Edgware Road. The invoices from this organisation have cropped up all over the country, with remittance advices. It is a further example of one of the seven I have listed which send out mock invoices, completely unsolicited, requesting entries in their trade directories. I have a further example of another of that seven, again from one of my constituents in the Derbyshire area who is a solicitor. He has received on three different occasions invoices from an organisation called U.K. Classified Telex. As a solicitor he is shrewd enough to be suspicious.

The publishers of this U.K. Classified Telex are Wallis Dene Ltd., 17 Nottingham Street, W.I. That firm asked for £38 —rather more than the usual amount. Although the invoice contained the phrase " The publishers do not assert a right to payment" in small print, the invoice also asks the firm to enclose a cheque with the invoice. I wrote to this organisation on 20th February asking for further information about the services provided. As yet I have had no reply. The Post Office provides adequate directories dealing with Telex services.

I could go on with the examples but I do not want to waste any more time. The point is that the Unsolicited Goods and Services Act is being got round. As the Financial Times legal correspondent put it on 16th August 1971, after the Act was passed: An order for an entry in a particular directory must be made on a form identifying the directory, indicating the proposed date of publication, giving both the name and address of the publisher, and its price (including the number of copies to be distributed free of charge) and showing the nature of the entry. Many of them are not doing that. This is the point, however. It goes on: Any failure to comply with these provisions will not attract any penalty; the penalty only arises if there is any demand for payment on the basis of an order failing to comply with the provisions. This is the fiddle, the loophole. As long as the person puts on his document "This is not a demand for payment" he can do what he likes. I urge my hon. Friend to do something about this.

I have two suggestions. It is clear that the Unsolicited Goods and Services Act is not doing the job we all hoped it would do. We must look again at existing legislation if, as is apparently the case, no one is able to prosecute for these undesirable deceptive activities. I have tabled Questions asking for prosecutions and have been told that this is a matter for the police. The police have investigated on evidence which others and I have provided, but no prosecutions appear to have taken place. It is, therefore, clear that we must again consider the legislation, which seems to be ineffective. In a week when my hon. Friend's Department has stamped on pyramid selling it would be appropriate if at the same time we could stamp out this equally obnoxious business activity.

Secondly, pending legislation, a great deal could be done to kill these activities simply by the good offices of the DTI's publicity. A great deal more would be achieved if the public were made aware of what was going on. I know that some chambers of trade and commerce warn members to look out for these activities, but I hope that my hon. Friend the Undersecretary of State will strengthen these organisations by advising them to do more in the way of publicity. The Long Eaton, Nottingham and Aylesbury Chambers of Trade have done this, but I hope that the Minister will send out a memorandum or today will give greater encouragement not only to these organisations but to the media, such as the Press and the BBC, to publicise these activities more widely.

The Press has done a very good job, but it has the libel laws to worry about. The BBC programme "Nationwide" did a very good expose which has done a great deal of good. If my hon. Friend were to back this up and put the weight of publicity behind it a good deal could be done to protect the consumer. I say "consumer" deliberately, because we are not talking about a minority of business interests. Hundreds of thousands of small and large businesses are affected. I appreciate that this aspect of unfair trading is not covered by the Fair Trading Bill, but I hope that my hon. Friend will give special consideration to making sure that it is covered.

My hon. Friend the Under-Secretary of State, who has worked very hard in support of consumer protection and fairer trading practices and has an excellent record, has a great opportunity today to stamp out or at least publicly to condemn what I regard as a most undesirable and deceptive widespread practice which we hoped and thought had been stamped out but which is more virile than ever before. He will thereby do a great public service and will be adding to the Government's very creditable record in fair trading and consumer protection matters. I hope that my hon. Friend will ensure that the present legislation is reconsidered and that he will use the Department's strength to ensure the fullest publicity so that this business can be ended once and for all.

4.24 p.m.

Mr. Geoffrey Finsberg (Hampstead)

This problem is not confined to the sylvan glades of Derbyshire and Harrow; it has come to Hampstead. Recently I sent a case about it to the Department. This practice is a fraud under another name. Firms sending out these invoices should send a magnifying glass with them because one needs a magnifying glass to read what is said.

I hope that my hon. Friend the Undersecretary of State will have something valuable to say which will put the spotlight of publicity on these vicious people.

4.25 p.m.

The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant)

My hon. Friend the Member for Derbyshire, South-East (Mr. Rost) has performed a valuable service in calling attention to some undesirable and disturbing practices. My Department has received a great many complaints about the activities of some directory publishers. Many hon. Members have written to my right hon. and learned Friend the Minister for Trade and Consumer Affairs with examples of what they consider to be misleading solicitations for directory entries. Most of the complaints received relate to the National Business and Professional Trades Directory published by Commercial and Trades Directories of Blackheath.

The law on this matter is governed by the Unsolicited Goods and Services Act 1971 which makes it an offence for anyone to demand or assert a right to payment for an entry in a directory, unless he knows that the person to whom it relates has signed an order for it in the manner specified in the Act. For this purpose any invoice or similar document stating the amount of any payment and not stating as prominently—or more prominently—that no claim is made to the payment is regarded as asserting a right to payment.

As hon. Members will understand, neither I nor my right hon. and learned Friend are in a position to say how the Act would apply in a particular case. Enforcement of the Act is a matter for the police, and the Department has already drawn the complaints we have received to their attention. The House will know from the reply given by my hon. and learned Friend the Minister of State, Home Office, to a Question from my hon. Friend the Member for Derbyshire, South-aEst on 5th March about the National Business and Professional Trades Directory that the police have found no evidence of an offence against the Act by that firm.

The question has been raised in Standing Committee whether the Director General when the Fair Trading Bill becomes law could act against these practices and we are giving careful consideration to this point. But I should remind the House that directory entries are sought from traders whereas the Bill is intended to protect consumers. Because of this we are considering the possibility of acting in other ways and the possible relevance of other legislation.

I should like to make it quite clear to the House that the Government share the dislike that has been expressed by hon. Members today of dubious practices in this field. The Unsolicited Goods and Services Act currently defines the limits of the protection given by the criminal law. It may be thought that these limits are drawn too narrowly. However, as I have said, solicitations for entries in trade directories are not sent, as it were, to unsuspecting members of the public but are circulated to the business community. These solicitations may be a nuisance and may well be misleading, but traders should be on their guard against them.

I therefore agree with my hon. Friend the Member for Derbyshire, South-East about the power of publicity through the media, whatever form it may take, and, as I have said, he has rendered a substantial service by drawing attention to this matter. I agree that, while the Government are looking further into this matter, chambers of trade and commerce and local and other organisations concerned with traders, whether great or small, can perform a service by advising their members of the present law and of the nature of these practices. I hope that I have left the House in no doubt that the Government condemn these unsavoury practices and that I have made it abundantly clear that they take this matter very seriously.

Question put and agreed to.

Adjourned accordingly at twenty-eight minutes past Four o'clock.