§ 3.35 p.m.
§ Lord ORAM rose to move, That the draft Business Advertisements (Disclosure) Order 1977, laid before the House on 29th July, be approved. The noble Lord said: My Lords, Part II of the Fair Trading Act enables the Secretary of State or any other Minister or the Director General of Fair Trading to refer to the Consumer Protection Advisory Committee the question whether a consumer trade practice adversely affects the economic interests of consumers in the United Kingdom. If the Director General considers that a consumer trade practice misleads, confuses or is otherwise unfair to consumers, he may include proposals to remedy the position. The CPAC then reports to the Secretary of State whether it agrees with the proposals. If the Committee reports that it considers the Director General's proposals, broadly speaking, to be necessary, practicable and fair, the Secretary of State may make an order, subject to Parliamentary approval, banning or regulating the practice in question. This order is the third to be laid under these provisions of the Fair Trading Act and arises from a reference to the CPAC by the Director General. It deals with disguised business sales.
§ The reference covered one practice only—that of seeking to sell goods in the course of a business in a manner which did not reveal that they were being so sold. As the Committee explains, the practice is most widely seen in advertisements for goods for sale; for example, second-hand cars, furniture and electrical appliances. Traders advertise in such a way as to suggest that the seller is a private individual. The Committee agreed that the practice adversely affected the economic interests of consumers because it misled them about the status of the 695 seller of the goods and, consequently, about the rights that they, the consumers, enjoyed. A consumer's rights to financial redress when goods are faulty are stronger against a trader than against a private individual and a consumer, misled by the practice and seeking redress, would assume or be advised that his rights were limited to those available against a private seller.
§ The Committee also generally agreed with the Director General's proposals for controlling the practice to which the order will give effect. A person seeking to sell goods in the course of a business will be required to make that fact clear in any advertisement about the sale of the goods. It will suffice if this is made clear from the content of the advertisement or from its format, size, place or manner of publication.
§ The order will, if approved, come into effect on 1st January 1978. This should not present any problems because the media and those advertising associations chiefly concerned have been given adequate warning by the Department of Prices and Consumer Protection. I conclude by emphasising that the practice which this order will control is often a deliberate attempt to mislead consumers through the use of classified advertisement columns but that this is done only by a tiny minority of traders. No honest trader is likely to object to its provisions, and I believe I am right in commending this order to your Lordships. I beg to move.
§ Moved, That the draft Business Advertisements (Disclosure) Order 1977, laid before the House on 29th July, be approved.—(Lord Oram.)
§ 3.39 p.m.
§ Lord REDESDALE
My Lords, I think we are all most grateful to the noble Lord, Lord Oram, for so explicitly putting over the points in this order. From these Benches we very much welcome it. There is one particular point which I should like him to clarify. He has said that in some cases it is a calculated effort to mislead and I wonder whether that might not have been covered by the Trade Descriptions Act. Apart from that one point we wholeheartedly support this measure.
My Lords, I explained the procedure which is necessary to be 696 gone through on reference by the Director General, and so on. I feel confident that at some point during that rather complex investigation, if it had been already covered in the way the noble Lord suggests, someone would have said so, and the fact that they did not makes me confident that this order is necessary.
§ On Question, Motion agreed to.