Cowboy traders face stiff penalties

ROGUE CAR salesmen, dodgy builders and crooked insurance companies will be closed within weeks rather than years under tough government plans to root out Britain's worst "rip off" traders.

The Department of Trade and Industry will create a fast-track procedure to ensure that fraudulent and reckless businesses face fines and possible closure soon after a public complaint.

A DTI White Paper on consumer protection being drawn up by ministers will contain proposals to amend the fair trading laws and give councils much greater powers to crack down.

At present, rogue traders can operate for up to 10 years without being severely fined, because trading standards officers have to build up an exhaustive dossier of evidence against them to prove persistent malpractice.

Under the proposals, local councils will seek injunctions from magistrates' courts within weeks, or even days. Court orders will force the company directors to cease activities or face unlimited fines or jail.

Ministers are keen to root out those businesses, such as building firms, car salesmen and timeshare companies, which frequently prey on the elderly and the vulnerable.

"We want to nail these guys as quickly as possible," said a ministerial source. "These dodgy outfits can abuse the current system to continue trading for years after a complaint is first made."

Part III of the 1973 Fair Trading Act requires trading standards officers to refer fraudulent firms to the Director General of the Office of Fair Trading. The firms are then given a "last chance" to improve their behaviour in a voluntary agreement. Only if they are found to breach that can the OFT obtain a High Court injunction to fine them.

The act has long been criticised by consumer groups because lengthy bureaucratic delays allow the offenders to continue trading, some for four years before an injunction. In 1994-95, the latest figure recorded, just three injunctions were issued against rogue firms.

Keith Hale, senior executive officer of the Local Authorities Co-ordinating body on Trading Standards, said councils had been urging the changes for years.

"The consumer needs to be protected," he said. "We should be able to take the first breach [of conduct] to obtain an injunction. The new proposal would have the potential to bring rogue traders before the courts in very short order.

"It would be very much more difficult for a dodgy business to ignore the consequences of their actions."

The DTI White Paper, which will also set up a consumer unit to ensure UK prices are in line with European ones, is expected in the spring. Primary legislation will be needed but ministers believe parliamentary time will be found for it.