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CPA might have a negative effects

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While most legislation has the public interest at heart, some laws could inadvertently have the opposite effect.

This is according to Chistopher Riley, MD of The Notebook Company, who says laws like the Consumer Protection Act, which is now compelling companies to provide good service or face being closed down or hit with fines, might push prices up as companies face additional costs.
He says that, before the introduction of the Consumer Protection Act, companies had to provide good service or else they could risk losing market share. “Now they face enforced closure or fines of up to 10% of turnover. This is all good and well, but  perhaps what has not been realised is that this could arguably increase the running costs of most companies.
“In addition to this it is likely the new act will do much to encourage fight fly-by-night companies to look for additional loopholes – or even encourage the launch of more fly-by-nights.
“After all, why would they be scared of such high penalties if they have nothing to lose? If they face stiff penalties, true to form the will just shut their doors and crop up again somewhere else under a different guise. This is the very nature of fly-by-nights, the ones the new act needs to protect consumers from,” he says.
“While the Consumer Protection Act is laudable, it is likely that it will inadvertently do very little in the long haul except, perhaps, to increase prices and risk. If companies were not treating their customers right in the first place, why would the act illicit any different response” Riley asks.