6. Scams and Mis-selling
The increased scale and ambition of home improvements required to decarbonise buildings in Scotland will almost certainly be accompanied by an increase in activity from rogue companies looking to take advantage of consumers. According to some reports, energy efficiency is linked to a high incidence of outright fraud, and organised criminal gangs are increasingly infiltrating consumer-related industries. Consequently it is hugely important that consumers, particularly the most vulnerable in our society, are protected from these criminal elements.
We understand the threat of rogue traders within the industry and would also point towards the Strategic Framework within Scotland's Scams Prevention, Awareness and Enforcement Strategy, published in 19 March 2021, which focusses on prevention, disruption, awareness, education and enforcement. This is intended to help all consumers with practical steps they can take to recognise common scam tactics and avoid the risk posed by this criminal activity.
Case study: multi-agency approach to deterring scams
In 2020, Trading Standards Scotland carried out an intelligence, enforcement and prevention project to identify and directly address fair trading law compliance in respect of marketing for energy efficient home improvements.
An initial 1 month intelligence gathering phase identified over 400 potentially misleading social media adverts, with subsequent enforcement action resulting in 527 adverts and 57 web pages being removed or rectified due to their misleading nature as well as 10 advertising accounts ceasing all activity. It is conservatively assessed that this work is likely to have prevented around £4.5 million of detriment to consumers, flowing from the misleading marketing practices.
Furthermore, as a consequence of the complementary prevention campaign which was supported by Home Energy Scotland and Age Scotland, over half a million consumers were reached. If just 0.7% of those reached by the campaign, acted upon the advice given, this would have prevented £9.975 million worth of detriment.
TSS continues to build upon the enforcement and prevention work undertaken in the initial project, where issues are identified and resources allow. This has seen further engagement and disruption undertaken. In some instances it has been necessary to escalate to submission of formal prosecution reports in respect of consumer protection offences, and liaison with Police Scotland over suspected fraudulent schemes. Work to raise awareness around misleading practices in the energy efficiency sector has also continued, with this notably being highlighted by TSS during COP26 at the COSLA stand in the Green Zone, followed up with a dedicated week of prevention messaging. Increased capacity to co-ordinate and undertake this work would undoubtedly facilitate a more comprehensive and sustained response.
We believe the actions set out in this policy statement will go a long way in helping protect consumers. However, there is a risk that some rogue companies will try to fraudulently present themselves as approved and use high-pressure sales techniques and other methods to commit fraud. In order to minimise the risks of this it is important that consumers:
- Know what to look for in terms of quality marks and can access a trusted resource of approved suppliers which can be used to both find suppliers and check the credentials of any claiming to have these quality marks.
- Know what to look out for in terms of the warning signs in order to keep themselves safe if they are approached by a rogue trader.
- Can rely on an effective enforcement system if they have been a victim of a crime or attempted crime, both to seek redress and to deter scammers.
False/misleading marketing in relation to energy efficiency products is an issue across the UK and in recognition of this, Trading Standards Scotland (TSS) has designated the issue a national priority with resources being prioritised to tackle this. It is important to emphasise that false/misleading marketing is an offence under the Consumer Protection Regulations 2008 and enforcement bodies can use this and other legislation to address the misleading practice. Disruption and education are also used to reduce the effectiveness of potential scams.
A key enabler for misleading marketing claims in relation to energy efficiency products is unsolicited marketing calls. These calls are prolific in Scotland
and can typically amount to several million in just a few weeks. TSS is working in partnership with the Information Commissioners Office to take action against perpetrators.
We are working with TSS as well as bodies such as Advice Direct Scotland to improve the effectiveness of disruption and enforcement. The proposed Scottish Quality Assurance Oversight Group will play an important role in co-ordinating information between relevant groups and we will ensure that this work complements other groups such as Scotland's Scams Prevention Partnership.
We will work with stakeholders, including Trading Standards Scotland, to prevent scams and support improved enforcement action against rogue traders within Scotland.
We will work with Trading Standards Scotland to minimise the scale and impact of energy efficiency related scams through intelligence gathering and working with partners to disrupt/tackle these scams before they cause any consumer detriment, as well as to ensure that any retrofit work done is done accordance with industry standards that are enforceable, and with adequate redress in place to protect consumers.
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