Gift card payments must be protected, says TSI
TSI Approved Codes of Practice for Consumers will be required to have pre-payment protection for gift cards, gift vouchers and unregulated savings schemes, the Trading Standards Institute (TSI) has announced.
TSI revealed the new core criteria for approval today at the Year Ahead conference, following a consultation late last year. The role of approving consumer codes of practice – to give an official stamp of approval to any consumer facing organisation that operates a voluntary code of practice for its members - is transferring from the Office of Fair Trading to the Trading Standards Institute on 1st April 2013. From then, consumers should look out for the TSI Approved Code logo when looking for a trader to be confident that they are making a safe choice.
In relation to gift cards, this means that any company that is signed up to an approved code of practice, will have to ensure that the gift cards they offer are protected in the event that the business fails. It is up to them how they do this – it could be that they are insured, or they have a client account, or that they have some bonding scheme – but the outcome for the consumer is that, if they have a gift card and the company goes bust, the consumer will be able to get their money back.
A new section clearly covering gift cards and vouchers is one of the new additions to the scheme’s core criteria that codes of practice will need to meet in order to receive TSI’s seal of approval.
TSI’s chief executive Ron Gainsford explained: “Recently consumers have faced real difficulties when companies have gone into administration and have refused to accept gift cards or vouchers. Now, any company that is signed up to an approved code of practice, will have to ensure that the gift cards they offer are protected in the event that the business fails. It is up to them how they do this – it could be that they are insured, or they have a client account, or that they have some bonding scheme – but the outcome for the consumer is that, if they have a gift card and the company goes bust, the consumer will be able to get their money back.
“This is just one area of consumer detriment that we have highlighted in our new core criteria for gaining TSI approval of codes of practice - they strengthen important areas for consumers, whilst releasing the resources of code sponsors to focus on raising standards and reducing consumer detriment. From April, consumers will start to see the ‘TSI Approved Code logo’ and can be reassured that they will be placing their order with a reputable and honest trader; that they will enjoy enhanced consumer protection over and above their legal rights; and that they will have access to independent dispute resolution.”
The key changes to the criteria include:
• A new requirement that code members respect no cold calling super signs on consumer’s homes.
• A new requirement that gift cards, gift vouchers and unregulated savings schemes (like ‘Christmas clubs’) have deposit protection – such as insurance backed schemes.
• A new right for consumers to insist on alternative dispute resolution (like an Ombudsman or Arbitration) once eight weeks has passed from their initial complaint to the trader.
• A strengthening of monitoring and enforcement of consumer codes of practice.
Citizens Advice Chief Executive Gillian Guy said: “With over a million consumer problems a year coming to Citizens Advice it’s clear that consumers have been let down and lost money by businesses not delivering what they promise.
“TSI’s criteria will give people more protection and help them identify traders they can trust. The pre-payment protection will be very reassuring to those who want to make big purchases but are worried about paying a deposit and seeing nothing in return.
“Business bodies must get behind these schemes so consumers have the confidence to spend their money knowing there is a way to sort out anything that goes wrong.”
This week saw also the selection of a chairman the Consumer Codes Approval Scheme’s new Code Sponsors Panel – Motor Codes managing director Chris Mason.
TSI’s chief executive Ron Gainsford said: “We welcome the creation of a new Panel to represent the code sponsors – this forms a critical part of securing he independence and integrity of the scheme – and we are delighted to see Chris Mason, from Motor Codes, as the new chairman.
“I look forward to working with the Panel to grow the codes approval scheme to be a major force in reducing consumer detriment.”
Motor Codes managing director Chris Mason said: “With TSI taking the lead on consumer codes, there’s a real opportunity to provide clarity for consumers.
“At a glance, people will be able see that whether a company they’re doing business with is committed to clear-cut customer service standards and to know for sure that the business is open to independent scrutiny.
“It’s what we’ve achieved in the motor industry, developing a UK-wide network of over 7,000 approved garages.
“I’m looking forward to putting my experience to good use as chairman of the forum, helping other sectors deliver the same safety net.”
Notes for Editors:
For further information, to arrange an interview please contact Irja Howie at TSI press office on 08456089430 / 07780675815 or firstname.lastname@example.org
Full copy of the Trading Standards Institute Consumer Codes Approval Scheme: New codes approval criteria – response to the consultation paper. (PDF 3MB)
The Government announcement that TSI would develop a successor to the OFT’s Consumer Codes Approval Scheme was made in April 2012 – more information can be found in the foreword of the above mentioned consultation response document. The full announcement can be found here: https://www.gov.uk/government/policies/providing-better-information-and-protection-for-consumers/supporting-pages/consumer-and-competition-landscape-reform
Trading Standards Institute (TSI)
TSI is a training and membership organisation that has represented the interests of the Trading Standards profession since 1881 nationally and internationally. We aim to raise the profile of the profession while working towards fairer, better informed and safer consumer and business communities.
TSI’s members are engaged in delivering frontline trading standards services in local authorities and in businesses.
Year Ahead Conference
Annual trading standards and environmental health conference, taking place this year 7-8 February, in Startford-upon-Avon.
It is aimed at:
• directors and senior managers of regulatory services
• local authority cabinet members and portfolio holders
• environmental health practitioners
• trading standards practitioners and officers
• private sector stakeholders
For the programme and more information visit: http://www.tradingstandards.gov.uk/events/Yearahead2013.cfm