As Covid-19 brought a seismic shift in the amount of time Britons spend living and working in their home, there followed an uptick in those wanting to maximise or improve the space through renovation. With demand for tradesmen outstripping supply, it is unsurprising that homeowner complaints about ‘rogue builders’ soared by nearly one third between 2020 and 2021.

The rise in mortgage interest rates has also played a part, as homeowners resort to home improvements, such as roof conversions and extensions, instead of moving house. A decrease in real wages has also encouraged homeowners to go with the cheapest quote for works, even if hundreds or thousands of pounds lower than the average. The unhelpful truth is that the vast majority of people who employ builders are wholly inexperienced in the area, making exposure to a scam more likely.

Nationally, Trading Standards services estimate that unscrupulous traders and scammers cost consumers and homeowners around £3.5 billion every year.

Enforcement action

Taking action against rogue builders is notoriously difficult. Not least because a common modus operandi of such tradesman is to operate without written proof of agreement while requiring large sums of money upfront for works, which leaves discontented homeowners with little to point to when they want to complain. Litigation is also inherently costly which leaves those with “small claims” (i.e. the majority) unable to afford to challenge shoddy or incomplete workmanship.

It is also commonplace for rogue builders to operate through “phoenix” companies. This is the practice of carrying on the same business or trade successively through a series of companies where each becomes insolvent in turn. Each time this happens, the insolvent company’s business, but not its debts, is transferred to a new, similar phoenix company. As can be imagined, this practice can be abused by unscrupulous traders, as they distance themselves from the previous company’s reputation, taking all the money out of the business so that there is no way to recover anything. There is regulation in this area but the Insolvency Service declines to investigate or resolve individual commercial disputes between companies and their customers, such as between tradesmen and homeowners.

What action can be taken?

Action Fraud

Ostensibly, at least, homeowners can report their experience to Action Fraud, the UK’s national reporting centre for fraud. A report can be made either through its website or to an advisor over the phone (0300 123 2040). Despite this, Action Fraud’s shortcomings are well understood and those who make a complaint must often wait months before their case is taken up, if at all.

Trading Standards

Often of more hope to homeowners are their local Trading Standards service. Trading Standards have the power to investigate the conduct of rogue builders, with enforcement options including criminal prosecution resulting in punishments such as imprisonment or fines, director disqualification orders, confiscation of assets, forfeiture of goods, and compliance notices.

Trading Standards can prosecute individuals for standard fraud offences such as fraud by false representation (section 2 of the Fraud Act 2006) and fraudulent trading (section 993 of the Companies Act 2006), however there are also specific Trading Standards offences. Of particular note is Regulation 8 of the Consumer Protection from Unfair Trading Regulations 2008 (CPUTR 2008), which provides that it is an offence for a trader to knowingly or recklessly engage in a commercial practice which contravenes the requirements of professional diligence, and the practice materially distorts or is likely to materially distort the economic behaviour of the average consumer with regard to the product.

Recent cases

Local Trading Standards have had varying successes prosecuting rogue traders under these legislative provisions, but recent wins show that they are possible.

For example, in March 2023, an investigation by Havering Council’s Trading Standards team led to the successful prosecution of two men for fraud by false representation, with one receiving a sentence of three years and two months’ imprisonment, and the other a 14-month sentence suspended for two years.

Further, in April 2023, following a prosecution by Wiltshire Council, supported by the National Trading Standards South West Regional Investigation Team, two brothers were sentenced for participating in a fraudulent business and fraud by false representation, receiving imprisonment terms of two years and three months, and three years and four months, each. A third man received three years’ imprisonment for participating in a fraudulent business.

A continued push for enforcement action against rogue builders appears likely to continue, not least because of the prevalence of this type of offending. There have also been calls for the government to review its policy in this area, and to bring in measures for greater regulation. Although it is unclear whether any substantive action will be taken, the Minister of State at the Department for Business and Trade made an assurance that the government is seeking to increase the number of qualified and competent tradespeople and to ensure that they have the skills to deliver the quality of work required.

How we can help

Despite Trading Standards’ best efforts, as with other local services, many are unfortunately overstretched and under resourced. The problem for homeowners being that, even if they report their case, Trading Standards may be unable to take it forward.

To expedite the prospect of prosecution, our firm has experience of drafting preliminary reports for homeowners, pulling together the available material and advising on whether any criminal offences may have been committed by the tradesman or company, and what further steps should be taken. This report can be submitted to a relevant enforcement body, be that Trading Standards and/or Action Fraud, as well as other bodies that may have an interest, such as HM Revenue & Customs.

Our experience in this area means that our lawyers are adept at advising tradesmen affected by allegations of criminal conduct, assessing the risks, devising the most appropriate strategy and gathering and presenting the evidence necessary to discharge them.