Unfair sales practices by rivals are eroding small businesses’ revenues, a government study has shown.
The report from the Department for Business, Enterprise and Regulatory Reform (BERR) showed that over half of small business leaders think that their profits are hit by rivals using unfair sales practices.
Of those who feel their business has been affected, one in 10 estimate rogues are costing them more than a fifth of their revenue and 38% believe they are costing them between 10-20%.
The problem is rife; a fifth of small business leaders said they have worked in an organisation they felt used such practices, with 12% actively encouraged or trained to deploy questionable tactics to make a sale.
However, a government plan is taking shape to crack down on this problem. If approved by parliament, the Consumer Protection Regulations (CPRs) will come into force on 26 May of this year which will ban 31 types of aggressive sales practices. These include bogus ‘closing down’ sales, prize draw scams and aggressive doorstep selling.
The CPRs will replace 23 pieces of existing legislation which are considered outmoded. Under the new regulation government will also introduce a catch-all duty not to trade unfairly. It is hoped this will close loopholes that rogue traders have previously been able to exploit.
“The Consumer Protection Regulations will deliver protection for consumers, cut red tape and put in place simpler and clearer consumer law that will be easier to interpret and enforce,” said consumer affairs minister Gareth Thomas.
© Crimson Business Ltd. 2008
