HC Deb 11 December 2001 vol 376 cc754-5W
Richard Burden

To ask the Secretary of State for Trade and Industry (1) what representations she has received on the financial and other costs of fraudulent homeworking schemes on(a) the legitimate homeworking industry and (b) victims of such schemes; [21254]

(2) what assessment she has made of the provisions of the Outworking Bill introduced in the last Parliament by the hon. Member for Birmingham, Northfield; and if she will incorporate similar provisions in the forthcoming Enterprise Bill; [21252]

(3) what assessment she has made of the impact of fraudulent homeworking schemes on people with low incomes. [21256]

(4) what plans she has to introduce legislation to safeguard consumers from fraudulent homeworking schemes; [21251]

(5) what estimates she has made of the number of fraudulent homeworking schemes in operation. [21255]

Miss Melanie Johnson

Since January 2001:

  1. (a) No representations have been received from the legitimate homeworking industry.
  2. (b) Eight representations have been received from, or on behalf of, victims of fraudulent homeworking schemes.

In the Regulatory Impact Assessment published with the Outworking Bill we assessed there could be up to one million victims of all the 300 schemes that are estimated to exist at any one time. The initial outlay by the victim is typically between £10 and £60, with some schemes eliciting supplementary payments. These schemes tend to attract vulnerable and low paid people.

Due to the difficulty of monitoring the scam operatives' activities it is difficult accurately to gauge the size of the problem in financial terms.

When the Outworking Bill was introduced we supported it as a way of further clamping down on homeworking scams although we recognised there was some scope to tackle these under existing legislation such as the Trade Descriptions Act 1968 and the Control of Misleading Advertisements Regulations 1988 (CMARS). Since then we have strengthened the powers of Trading Standards officers by introducing Stop Now Orders. These enable trading standards authorities and the Office of Fair Trading to seek an injunction against anyone who is in breach of consumer protection legislation in a number of relevant areas, in particular misleading advertising. We plan to strengthen consumer protection by extending the injunctive regime through the Enterprise Bill. The Stop Now regime will cover all consumer protection legislation, and include Trading Standards as well as the OFT as enforcement bodies. This will further strengthen the ability of Trading Standards to shut down scams including homeworking scams.

In 1999, 869 alleged scams were reported to the National Group on Homeworking. Based on their figures the Regulatory Impact Assessment, which accompanied the Outworking Bill, worked on the assumption that 300 schemes were operating at any one time.