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UK product safety regulations are failing consumers online, in the IoT, and … with artificial intelligence?

So the National Audit Office found in report on the Office of Product Safety and Standards, anyway

A report into the Office for Product Safety and Standards (OPSS) has highlighted “gaps in regulators' powers”, with major risks found in oversight of online marketplaces, “smart” Internet of Things devices — and, oddly, artificial intelligence.

Also worrying are Brexit related regulatory issues such as an upcoming deadline for mandatory use of the UK Conformity Assessed mark, the “equivalent” replacement to the European CE mark, as well as difficulties monitoring goods coming into UK ports.

The OPSS was founded in 2018. Its establishment followed an outcry over major national safety issues, not least the fatal fire in June 2017 at Grenfell Tower, when 71 people died in a 27-storey public housing block in the heart of the wealthy London suburb of North Kensington.

The unit was given the remit of assisting local-level Trading Standards authorities by providing a national overview — on a limited budget of just £10m, rising to £14m in its second year.

And now its first report card has landed.

In its first in-depth look at OPSS’s operations, the National Audit Office (NAO) set off alarm bells that the UK’s regulatory frameworks on product safety — with or without the OPSS — were simply not keeping up with the times.

Things could get worse thanks to a certain looming deadline brought about by Brexit: mandatory use of the UK Conformity Assessed (UKCA) mark, the new equivalent to the European CE mark.

The report, published today, states: “For example, regulations on furniture fire safety have not been updated since 1988 to reflect innovations in safety testing or office furniture increasingly used in the home.

“Regulations have also not kept pace with newer types of product such as ‘smart’ technologies or artificial intelligence. These product types are continually developed, and items already purchased can have their software updated, but they are not specifically considered within current regulations.”

Online marketplaces a danger zone

There’s a broader concern to be found in the report, however: poorly-regulated online shopping. “Online sales have grown steadily over the past decade,” the report found, “a trend that has accelerated during the COVID-19 pandemic. For example, internet sales as a proportion of total retail sales in the UK rose from less than five per cent in 2007 to 20 per cent in January 2020 and then nearly doubled during recent lockdowns to 36 per cent in January 2021.

“Online marketplaces have also grown in popularity, have been used by an estimated nine in ten adults who use the internet, and are a significant source of potential product safety harm. Online marketplaces are platforms provided by various websites, such as some online stores and social media sites, that anyone can use to sell new or used goods. These platforms are not responsible for the safety of products sold by third parties — it is the seller who is responsible.

“Online marketplaces have become increasingly popular among people who make products at home and with overseas sellers looking to export goods to the UK,” the report continued. “Regulators, industry and consumer representatives we interviewed raised concerns that sellers using these platforms are less likely to comply with product requirements, increasing risks to consumers and leading to unfair competition with compliant businesses.”

It’s hard to argue on that front: a 2020 study from the European Consumer Organisation (BEUC) quoted in the report found that of 250 products sampled from online marketplaces, 66 per cent failed safety tests — with recorded risks including, but not limited to, electric shock, fire, and suffocation.

Current regulation ‘not fit for purpose’

“Consumers are being exposed every day to dangerous and illegal items on online marketplaces that have been sold without adequate safety checks or monitoring,” said Sue Davies, head of consumer protection policy at consumer rights organisation Which?. “As the NAO has highlighted, the current regulatory framework isn’t fit for purpose, and given the growth in people shopping online it is essential that online marketplaces are urgently given greater legal responsibility for the safety of all products sold on their sites.

“The OPSS must also be made an independent product safety regulator, at arms-length from the government, with a clear focus on consumer safety and real powers to protect people from the potentially devastating consequences of unsafe products.”

Consumers, however, need to take some responsibility themselves. A survey carried out by OPSS in 2019 found only 17 per cent of respondents identified product safety as a consideration in recent purchases - joint sixth, beaten by apparently more important concerns including style and fashion at 19 per cent, brand name at 40 per cent, and purchase price at 58 per cent.

A separate survey quoted in the report, from Electrical Safety First, found that one in five respondents would opt to buy a known-fake or otherwise substandard electrical product — providing the seller was offering a discount of at least 50 per cent. Just 19 per cent of consumers, meanwhile, named the government as the most trusted source of product safety information — behind both manufacturers and retailers.

Resources lacking, and Brexit’s not helping

The report pointed to a lack of resources, both in terms of funding — with the total spend by Trading Standards dropping by 39 per cent in real terms between the 2010–11 financial year and 2019–20 — and in terms of data available as being a key issue facing the OPSS. While work is underway to address at least the latter, things could get worse thanks to a certain looming deadline brought about by Brexit: mandatory use of the UK Conformity Assessed (UKCA) mark, the new equivalent to the European CE mark.

“UK capacity for product testing, which assists the conformity assessment process, is currently low,” the report found. “For example, there is no capacity to test pyrotechnic products in the UK. Testing capacity is expected to reduce further as UK testing houses struggle to attract business in the period to January 2022 while the new UKCA mark is not mandated.”

Another Brexit-related warning was sounded on the nation’s ability to actively monitor the goods coming into the country. “The largest UK port, Felixstowe, handles millions of consignments of imported goods each year,” the report noted. “While most consignments are likely to be low risk for product safety issues, Felixstowe only has capacity to inspect fewer than 1,000 a year, which it targets based on high-risk products and importers. Some other points of entry to the UK have no enforcement staff.”

A ‘clear vision and plan’ is required

Warning of “gaps in regulators’ powers to regulate online marketplaces,” the report detailed the need for OPSS and Trading Standards to work in partnership with the platforms to remove unsafe product listings. It also highlighted issues in finding the actual identity of a seller on the marketplaces, especially when located overseas, and that those who sell products from their homes can’t be inspected by regulators unless a search warrant is obtained — a distinct difference to commercial premises.

“On social media sites,” the report warned, “goods can be sold from private pages or groups. Other than offences that would meet the threshold for serious crimes, Trading Standards services have limited ability to undertake anonymous market surveillance or test purchase activities, as it could involve covertly gathering personal information that is not public."

The largest UK port, Felixstowe, handles millions of consignments of imported goods each year … Felixstowe only has capacity to inspect fewer than 1,000 a year

“The OPSS recognises the risks from unsafe goods sold on online marketplaces. It is currently working with a range of platforms to try to improve outcomes by, for example, providing advice to consumers to make informed purchasing decisions. It is also developing a voluntary code of conduct for online marketplaces relating to product safety, similar to an existing code developed in the EU. The OPSS’s product safety review is seeking views on how to improve the regulation of online marketplaces.”

“Until [the OPSS] establishes a clear vision and plan for how to overcome the challenges facing product safety regulation and the tools and data needed to facilitate this,” the NAO warned on the report’s publication, “it will not be able to ensure the regime is sustainable and effective at protecting consumers from harm.”

The full report is downloadable from the National Audit Office. ®

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