Unfair Tactics hit Small Business Profits
As many as 53% of the heads of SMEs believe that their profits are being harmed by the unfair sales practices of their rivals.
New research by the Department for Business, Enterprise and Regulatory Reform has revealed that in addition to more than half of SME owners being wary of lost profits due to unsavoury practices;
- Of those that believe their profits are being eroded:
- 10% estimate that rogue traders cost them 20% of their revenue
- 38% believe that rogue traders cost them between 10 and 20%.
- As many as 20% of small company owners have previously worked in organisations that have used unsavoury practices and 12% of those have been either trained or actively encouraged to use unfair tactics to make a sale.
The government are to crack down on this problem with measures, if they are approved by Parliament, to come into force on the 26th May under the banner of the Consumer Protection Regulations (CPRs)
Consumer Protection Regulations
The new Consumer Protection Regulations will apply directly to all businesses that trade directly with consumers and will ban 31 types of unfair selling tactics.
These tactics include:
- Bogus "closing down" sales
- False prize draw scams
- Aggressive doorstep selling
- Misleading claims
The new laws are aimed at not just protecting consumers & honest business but also to attempt to simplify & clarify the existing 23 pieces of legislation, making the regulations easier for business, consumers and enforcers to understand. Loopholes that have been previously been exploited by unsavoury traders will be closed.
Trading Standards and the Office of Fair Trading will enforce the new regulations with guidance and codes of conduct to unlimited fines and long prison sentences.