Next Government must close loophole of ‘inertia selling’
C.M. writes: Chess ICT Ltd, a large phone and broadband provider, used my direct debit to take money from my bank account for services I had not requested or agreed to. It introduced a fraud monitoring service that requires the customer to opt out rather than opt in, and assumes that silence constitutes acceptance. I believe this is against the law, but Chess ICT appears to have applied it to all its customers.
WHAT you have described is inertia selling. A business tells the customer it will provide a service and collect payment unless the customer cancels the service, which, of course, the customer never ordered in the first place.
Under a succession of laws going back to the 1970s, inertia selling has pretty much been wiped out as unlawful. But there is a loophole, and it is quite a big one. The law only fully protects ordinary consumers, and not businesses. You and your wife run a bed-and-breakfast business, so you are fair game.
Emma Stott, who heads customer services at Chess ICT, explained that this is why the company used an opt-out system when it launched its fraud monitor service, which she says has been a huge success, saving hundreds of business customers hundreds of thousands of pounds. The service was offered free for the first three months, after which charges kicked in.
But she added: ‘As there has clearly been some form of miscommunication, we can only apologise and offer a full credit for the fraud monitoring service of £98.26 plus VAT.’
Chess ICT is topping this up with a £50 ex-gratia payment.
I have to admit that it is years since I last received any complaint about inertia selling, so it has been startling to find that anyone in business – even the smallest self-employed trader working from a back bedroom – can find themselves without legal protection.
Yet this is exactly the situation. Sylvia Rook, an expert on fair trading laws with the Chartered Trading Standards Institute, told me: ‘It makes no difference if the business is large or small. The law looks at whether the goods or services are used principally by a business or by a consumer.’
And she explained that the original 1971 law banning inertia selling does protect businesses when unsolicited goods are supplied, but this protection does not apply to unsolicited services. All the various laws and regulations that have come into force since 1971 have, in any event, only applied to consumers, leaving businesses out in the cold.
The huge growth in the number of people who work for themselves, often from home, has left millions exposed to inertia selling deals, which – unlike the service from Chess ICT – are little more than very expensive scams. Whoever ends up with whichever Government job over the next several weeks, I suggest they look urgently at this before a loophole turns into a costly scandal.