Following the Chancellor, Rishi Sunak's announcement on 17 March, when he challenged Ministers and business to identify opportunities to support the most affected industries, including possible ‘regulatory forbearance’, consumer protection and other regulators have been steadily adjusting their responses to more routine, BAU, regulatory enforcement issues. This reflects the need to ensure that their now even more stretched resources have the most impact and tackle the most serious pandemic-related consumer protection issues arising at this time. This article looks at the most recent stated approaches of some of the regulators, the Competition & Markets Authority (CMA), Advertising Standards Authority (ASA) and Trading Standards.
The CMA was the 1st to respond to the pandemic, beginning with its statement on 5 March on sales and pricing practices, warning firms that they should not capitalise on the current situation by charging unjustifiably high prices for essential goods or making misleading claims around their health protection capabilities. It made clear that it would consider any evidence that companies were acting in breach of consumer protection law and would use all its powers to ensure that markets continue to work well during the coronavirus outbreak. This was repeated in its later guidance on the relaxation of competition law rules. In addition, it set up a specific COVID-19 taskforce on 20 March, with the objectives of:
- Closely monitoring market developments to proactively identify any harmful sales and pricing practices – as part of this, CMA has introduced a specific form for consumers to report COVID-19 business concerns, to enable it to monitor the market, and to take action where appropriate, with updates on any action taken to be published online
- Warning firms suspected of taking advantage of the pandemic and peoples' anxieties by inflated pricing or misleading claims, and where these warnings are ignored, taking enforcement action
- Enabling the CMA to advise government on the need for emergency legislation where required, to ensure that markets function properly during this time, and continue to deliver essential goods and services.
Given the need to focus on COVID-19 issues, and as statutory deadlines apply to much of the CMA’s work, the CMA's stated intention is to continue progressing current cases in accordance with those timetables. However, it will monitor the position, and will extend statutory deadlines where necessary, with updates being published on its website.
The ASA issued its approach to enforcement during this time on 20 March, stating that it would be taking a lighter touch in some areas of work, in order to ensure that it can act rapidly and firmly in cases where people's concerns and fears over coronavirus are being exploited by advertisers. Its approach is in line with other members of the Consumer Protection Partnership, which includes the CMA, National Trading Standards and the Financial Conduct Authority, with the aim of ensuring consistency of approach in areas where a lighter touch can be utilised, while ensuring decisive action against activities which go entirely against the grain of the UK response to the pandemic.
The ASA's approach includes actively monitoring the market, to ensure that it captures and deals with any ads attempting to take advantage of consumers in these difficult times. It also accepts that this is very challenging time for many businesses, and will not be taking a heavy-handed approach in certain circumstances, instead adopting a more advisory approach where the issue is relatively minor or which could not have been reasonably foreseen, for example, in relation to a lack of product availability.
On 30 March, the ASA also introduced a new streamlined complaints procedure and report form specifically for COVID-19 related ads for consumers to use. The form only requires minimal details of the ad, which the ASA's team will then swiftly investigate and take the necessary action with the advertiser. While we expect this to result in a reduced formal rulings, the ASA has already shown that it can and will publish formal rulings in double-quick time where required.
Lastly, and in conjunction with other bodies, including Citizens Advice and National Trading Standards, it has published advice on coronavirus-related scams, how to spot these and who these can be reported to. It highlights that given the level of misinformation around the pandemic, it can be difficult to work out what is and is not fake news, and the aim of its campaign is to raise awareness of this, and to ensure that already vulnerable consumers as well as the public at large are not hoodwinked by less scrupulous advertisers.
At national level, National Trading Standards is focusing on the prevention of coronavirus-related scams, and the exploitation of consumers by traders. They report an increase in the level of scams, particularly around door-stepping activities, which is sadly unsurprising, given the social distancing and self-isolation measures in place, and an increase in the sale of food supplements and anti-virus kits falsely claiming health protection benefits. Worryingly, they also report an increase in the sale of products which do not meet safety or manufacturer requirements. What steps are being taken to deal with this particular issue have not yet been made clear.
At local level, departments are clearly focusing on these high-priority consumer issues protection, are monitoring activities and complaints, with some local authorities indicating that they will intervene so far as possible, working with other agencies including the police to do so. Other activities, including business support, will only be done by way of email and phone contact, not visits. Consumers are being directed to use the CMA's reporting system for national chains, with complaints and issues about local independent businesses being directed to local trading standards teams, in an effort to ensure that the available resources are deployed as effectively as possible.
We are pleased to see that the Chancellor's plea to look at whether "regulatory forbearance" was possible during this incredibly difficult time has borne fruit, with regulators making clear public statements about their approach to enforcement, and the issues that they will be focused on. While the focus is on enabling consumers to bring concerns around traders to the attention of the regulatory authorities, businesses should not hesitate to raise their own concerns with the regulators where appropriate. In addition, should individual over-zealous officers take a different approach to more minor indiscretions or contraventions then businesses should take steps to raise these with more senior officials, to prevent the diversion of resources into dealing with non-urgent, non-essential matters at this critical time.