How is this sort of thing even legal?!
A different question might be: 'What are they doing that could possibly be illegal?'
Sorry to say, the answer is Nothing! These guys are taking a leaf from a book written by the Labour government encouraged by a bunch of well-meaning do-gooders who thought that 'certification' of service providers would be good for preventing rubbish work and a cheap alternative to proper trade training. The initial result was schemes such as TrustMark (see
Website of the UK government : Directgov). The fatal flaw is that they had to be cheap (or entirely without any contribution from public funds - ie. taxes). So most/all of these schemes are either VERY expensive to join and/or operated by some 'interest group' on behalf of members (so you can guess whose interests are being looked after first!).
And, of course, once these 'official' schemes got started, scammers and others saw an opportunity and they all joined in!
I bet that they're all quite careful to stay legal and they probably can produce at least some 'satisfied customers' from both sides of the contracts they set up. However, they will always be an unnecessary overhead and I doubt very much if there's any way, legal or otherwise, to create 'good' schemes and keeping out the scammers.
So avoid ALL of these schemes, treat them like unpleasant STIs, and take every opportunity to persuade others to do likewise.
Another problem is that there are certain large 'service providers' who try to mop up the whole domestic market by offering consumers everything (plumbing, gas-fitting, electrical, drain work, ...) and then using cheap, under-trained staff and/or subbies to do the actual work. In terms of quality and impact on 'traditional' tradespeople, they're much the same as the aforementioned scammers!