The research was conducted by LACORS to identify the scale of the problem and what impact these scams have on the work of trading standards departments.
Many prize scams, such as scratchcards or prize envelopes distributed free in newspapers and magazines, use premium rate telephone lines as a means for collecting money from unsuspecting customers. Of the millions of cards distributed every card or envelope says the recipient is a winner but only a handful relate to valuable prizes. This means the consumers use the premium rate phone number to find out what they have won which can cost anything between£7.50 and£20.00. The growing scam industry is taking millions of pounds out of consumers pockets.
Trading standards departments have an important role in dealing with issues such as mass marketing scams and other areas of work, which include rogue traders, cowboy builders and product safety. They enforce a wide range of consumer protection legislation, including new powers under the Enterprise Act to seek court orders to restrain unfair trading practices.
LACORS will be sharing good practice amongst local authorities on how trading standards are trying to warn and advise local communities, particularly the more vulnerable in society, and taking steps to tackle these scams under the legislation local authorities enforce. LACORS is also actively working with other regulators including the Office of Fair Trading (OFT), the Independent Committee for the Supervision of Standards of Telephone Information Services (ICSTIS) and the Office of Communication (OFCOM) in order to take the most effective action to control this ever-increasing problem.
Derek Allen, executive director at LACORS said: 'This research highlights the growing concern over mass marketing scams which are costing consumers millions each year. It is often those who can least afford it that get ripped off. What is of particular concern is that once you have succumbed to these scams you become a future target for other companies operating in this trade. Regulatory services such as trading standards are essential to ensure public well-being and protect the communities they serve'.
1. LACORS (the Local Authorities Coordinators of Regulatory Services), a local government central body, seeks to make a major contribution to the development of high quality consistent and coordinated local authority regulatory services across the UK. Please visit www.lacors.gov.uk for further information.
2. This data is supported by a significant growth in complaints about competitions relating to premium rate numbers to the Independent Committee for the Supervision of Standards of Telephone Information Services (ICSTIS) and complaints statistics about competitions and prize draws published by the Office of Fair Trading (OFT).
3. Examples of mass marketing scams:
'Everyone's a winner' type scams which lead people to think that they have won a valuable prize will encourage recipients to ring a premium rate number to find out exactly which prize they have won. However, after listening to a recorded message lasting up to six minutes, and racking up phone charges of up to£9, they will then have to send off by post to receive their 'prize'. If and when they receive a 'prize' it will in most cases be coupons of very limited value or a small prize of much less value than the cost of their call. They will often be asked to send money to receive their so-called prize, which will exceed the value of what they actually (if ever) receive.
Those who respond often find themselves deluged with many more unsolicited mail shots and some vulnerable or elderly consumers have been known to send off hundreds and, in some cases, thousands of pounds, replying to these mail shots.
'You are being contacted by our dating service by someone you know! To find out who it is, call from a landline (then number)'. This type of scam is attempting to draw people into their 'dating' service and will involve calls to a premium rate number. Similar promotions may ask you to text back rather then call a number. In these instances, the recipient will be charged£1.50 for every text message they receive about supposed potential dates.