Copying scandal prompts inquiry

Competition and consumer affairs minister Nigel Griffiths is considering whether to launch an inquiry into Britain's photocopying industry as evidence gathered by the Independent on Sunday shows businesses and the Government may be paying millions of pounds more for copying services than necessary.

Mr Griffiths, MP for Edinburgh South, said: "I am considering whether there is still widespread abuse in the photocopying industry. I want to hear from victims." John Bridgeman, Director-General of Fair Trading, has been made aware of Mr Griffiths' concerns.

Evidence from the National Health Service in Scotland suggests that the Government could cut its photocopying costs by a third, a politically attractive proposition given the Labour commitment to squeeze pounds 100m a year of "bureaucratic waste" out of health spending.

Mr Griffiths, who has long campaigned to clean up the photocopying industry, said: "I want to know how much public money is being thrown away on these contracts."

The industry has been plagued by a spate of a dirty tricks, including phone calls made under false names, rumours spread about rival consultants and suppliers, and a letter from Xerox making serious allegations about a consultancy called Copywatch and its founder Matthew Smith.

Photocopying is frequently an organisation's third biggest cost after property and personnel. Some 730,000 photocopying machines are installed in Britain. Much of the evidence of over-charging and lack of transparency in the market comes from consultants such as Copywatch, a US company which began operating in Britain last year. Consultants often save their clients' money by renegotiating contracts, usually for leasing photocopying machines.

The Office of Fair Trading is also under pressure from the minister and others to take up a complaint by Eric Fordham, editor of the trade magazine Business Equipment Digest, that an organisation called the Business Equipment Users Association is not a genuine consumer body because it is compromised by close association with the industry.

This is a sensitive area for the OFT because an earlier spate of scandals led to a full OFT report on the photocopying industry in 1994. One of the report's recommendations was that consumers needed an independent body to provide them with information. The OFT agreed with complaints that it was hard for a lone buyer to tell whether a photocopier salesperson was telling the truth.

Although a recent OFT survey of the industry found that abuses seemed to have diminished, plenty of worries remain. Leasing contracts remain hard to understand, excessively high inflation allowances are built into them, leases are difficult to change, and salespeople pressure customers to change or upgrade machines unnecessarily.

Full story, page 2

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