Out-Law / Your Daily Need-To-Know

OFT investigates sites that charge for free Government services

Out-Law News | 14 Jul 2011 | 4:26 pm | 2 min. read

Companies that set up websites to charge for free Government services could be in breach of consumer protection laws, The Office of Fair Trading (OFT) has said.

The OFT is investigating whether a number of un-named companies are deceiving customers by setting up websites designed to look like official Government sites and asking consumers to pay for otherwise free services. Deceiving consumers is an unfair business practice, the OFT said.

Unfair and misleading business practices are prohibited by the Consumer Protection from Unfair Trading Regulations (CPRs). The regulations are enforceable through the civil and criminal courts.

The companies, which the OFT said cannot yet be identified, charged consumers for services such as European Health Insurance Cards (EHICs) that can be obtained freely through the NHS website, the OFT said.

The companies also operated websites that charged more for services than official Government organisations, the OFT said. It said users were asked to pay greater charges for booking driving theory tests than they would have to pay via the official Government website.

The OFT has discussed the issue with Trading Standards, it said in a summary of the cases.

'It is important that companies are clear about the service they are offering, and do not trick people into paying for something that they can get for free or much cheaper on government websites," Cavendish Elithorn, senior director of the OFT's goods and consumer group, said in a statement.

"We will be considering whether any of the sites under investigation are misleading consumers," Elithorn said.

"With summer holidays approaching, many people will be making applications for EHICs in particular, so we encourage travellers to take time to check that they are using an official government website," Elithorn said.

The OFT was alerted to the websites following complaints from consumers and representatives from Government departments, including the Department of Health and Driver and Vehicle Licensing Agency (DVLA), the statement said.

In 2010 the OFT investigated five websites that allegedly charged consumers for EHICs applications after consumers complained that they believed the sites were official.

Three websites were found to have breached the CPRs and signed undertakings to make it clear to visitors of the sites that they were not the official websites for EHICs applications. Another website shut down after the OFT asked for more information about it.

The fifth company, whose website was hosted in the US and apparently operated out of Spain, had its domain name suspended following a request by the OFT to the websites' domain name registrar. The OFT had been concerned that the website did not comply with the CPRs and UK regulations that implement the EU's E-Commerce Directive.

The Directive forces businesses to display contact information to consumers including the geographic address and name of the trader.

The OFT has responsibilities for ensuring traders comply with consumer regulations under the requirements of the UK Enterprise Act. The Act gives the OFT the power to enforce measures that ensure businesses' compliance.

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