It is because the Law is a bit of an ass in this respect, as is the Government.
Firstly things like CAB, Trading Standards, Financial Ombudsman etc etc, are all incredibly underfunded and are either unable to take on the case or if they do, take ages to deal with it. I am going through the FOS and it will take 6 months to get a conclusion from the date the case started and they won’t take on a case until you have gone through a process with the retailer/credit card supplier, which takes about 6 months itself.
Secondly the law is a bit of an ass, in my example of the FOS, I will go through an entire proscribed procedure, it will have taken an entire year to get a conclusion, and at the end of the year I will be entitled to…my money back. That is it.
It is in a company’s interest to just flaunt the law, 90% of people will suffer it because they don’t know any better, another 9% that won’t suffer it will “make do” with something less than they are entitled to in Law (Example this thread) and the 1% that attempt to enforce their strict legal rights against the company wait months and months and months for a conclusion and at the end of a very hard slog only get back what they were entitled to. You basically work for a year, writing letters, making phone calls, being out of pocket and being unable to use what you paid for, and all that you get back is the money you paid. Which only further discourages people from enforcing their strict legal rights in the future.
What we need is a system of steep and heavy fines to both encourage people to enforce their strict legal rights and to discourage companies from taking the piss and flaunting the law.
There is nothing in the law that doesn’t allow for this, for a breach of contract you are entitled to damages as well as being able to repudiate the contract (act as if it was never made ie get your money back) but it is for the courts to start issuing significant damages when these sorts of cases are brought before them.
The FOS can issue a fine of up to £100,000 but the last time such a case was brought before them they fined the credit card company £100. It probably cost the person bringing the case a year of their time and about £30 to bring the case. If the credit card company can dissuade 5 people from following through they can save themselves a massive amount of money.
The credit card company I am dealing with has tried to mislead me on three separate occasions, by claiming they are only a 3rd party and it is nothing to do with them, that they can’t force the retailer to do anything so nothing they can do, and finally claiming that their legal department has said that an independent test must be done at my cost. None of which is true. Yet if you weren’t training in the Law there is no way you know that all of this was untrue and might be conned into dropping a legitimate case.
While I will push for the FOS to issue a significant fine, the reality is, they probably won’t. I will be lucky if I get a £100 fine issued against them.