Consumers and Office of Fair Trading - January 2010

Top ten consumer complaints for 2009
Complaints about second hand cars bought from independent dealers topped the list of complaints recorded by advice service Consumer Direct for the fourth year running.

Consumer Direct advisors answered more than 1.5 million calls and emails in calendar year 2009, down 4 percent on the previous year, and recorded almost 850,000 complaints against traders, down 3 percent.

In total, Consumer Direct received 50,790 complaints about second hand cars bought from independent dealers, up by 8 percent on the previous year. Complaints about TVs came second, up 9 percent and complaints about mobile phone service agreements came third, down 29 percent.

Among the top ten, complaints about laptops recorded the highest rise, from 12,395 in 2008 to 17,611 in 2009, up 42 percent.

More than half of all complaints concerned goods and services bought at the traders' premises, 13 percent resulted from internet purchases, and 10 percent were about telephone transactions.
 
Consumer Direct is an OFT-managed telephone and online service providing information on consumer rights and advice on resolving disputes with shops and traders.  In many cases, the help provided by Consumer Direct allows consumers to resolve problems themselves. If further help is needed, such as specialist advice or face-to-face assistance, Consumer Direct will refer callers to local authority Trading Standards Services or to the organisation best placed to help.

The data collected by Consumer Direct is used to help the OFT, local authority Trading Standards Services and other enforcement bodies to build intelligence, determine priorities and focus resources.

The high level of used car complaints was a factor in the OFT's decision to launch a market study into second hand car sales in May 2009. The final report is due to be published in spring this year.

Information and advice on resolving consumer complaints is available at www.consumerdirect.gov.uk. Source: Consumer Direct - press release 2010
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OFT consults on unenforceable credit agreements guidance
On 27 January 2010, the Office of Fair Trading (OFT) published draft guidance for consumers and industry on the application of sections of the Consumer Credit Act 1974 (the CCA) that allow consumers to request information about their credit agreements.

The OFT is consulting on guidance because of concerns that some debtors are being misled into thinking that these sections can be used to get their debts written off and that some creditors are not following legal obligations to provide information to customers.

The draft guidance consists of a document setting out the technical legal issues for businesses and consumer advisers, and a simpler version for consumers.

It incorporates the findings of recent High Court cases that have clarified a number of technical issues. For example, sections 77-79 of the CCA allow a consumer to request a 'true copy' of their agreement. The High Court ruled that a true copy does not have to be a photocopy or an exact copy of the original. The lender is allowed to provide a reconstituted agreement, as long as that version is accurate and contains all the original information apart from the few exceptions that the law allows (which include the signature, signature box and date of signature).

The guidance also makes it clear that if a lender cannot comply with the sections - making an agreement unenforceable - then it is restricted in the debt collection activities it can undertake. Whilst lenders are able to request repayment and to record any arrears or default with a credit reference agency, the OFT considers it would be wrong to threaten court action if the lender knows that it is not possible.

The deadline for responses to the consultation is 21 April 2010.
Source: Office of Fair Trading
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Consumers could see how green brands are
Pressure from the British Property Federation (BPF), the organisation which represents landlords, may bring about change which will allow shoppers to be able to see how green their favourite shops are.

On 20 January 2010, the government announced plans for a consultation on the introduction of display energy certificates (DECs) for shops and offices. In a response to the Committee on Climate Change's First Progress Report, the DECs will make transparent the carbon emissions of businesses.

The DECs will not just include such criteria as whether an organisation uses an A-rated green building but also will look at whether energy is wasted through basic things like lights being left on and doors left open unnecessarily. It is thought that the introduction of DECs could result in more energy-use awareness and could cut costs of energy bills by about 30 percent.

At present, only buildings exceeding a certain size are required to have such certificates.
Source: British Property Federation
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OFT requests information from gold buying companies
On 21 January 2010, The Office of Fair Trading (OFT) requested information from a number of companies that buy gold from consumers using the postal service, to consider whether they are complying with consumer protection legislation.

Following complaints, the OFT has asked the companies to provide information on their business practices and to explain a number of claims made in their advertising and on their websites. Among the OFT's concerns is whether consumers' rights to reject an offer for their gold and receive it back are being honoured in all cases.

The OFT will also be reviewing the companies' terms and conditions to assess whether they are fair for consumers. Once the OFT receives the requested information, it will consider what further action, if any, is appropriate. At this stage, no assumption should be made that any companies involved in gold buying have broken the law.

Although it is not possible for the OFT to intervene directly to resolve issues arising between individual consumers and firms, in this case the OFT would be interested in hearing about consumers' experiences of using the services of companies who buy gold using the postal service.
Source: Office of Fair Trading
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OFT warns of deadline for anti-money laundering registration
On 19 January 2010, the OFT warned estate agents and certain consumer credit lenders of the need to register under anti-money laundering regulations before 31 January 2010 to avoid breaking the law.

Carrying on business having failed to register could result in the imposition of a fine by the OFT, a prison sentence, or both.

Money laundering controls help prevent legitimate businesses being used to launder money, which is where cash or assets obtained by criminal activities are exchanged for clean money or assets with no obvious link to their criminal origins.
Source: http://www.oft.gov.uk/news/press/2010/03-10
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Supermarket ombudsman could prove costly for customers
On 13 January 2010, the British Retail Consortium (BRC) reacted to Government plans to consider instituting a costly new bureaucracy to influence relationships between supermarkets and their supplier.

The BRC suggested that this new supermarket ombudsman would result in consumers paying millions of pounds in higher prices, with the emphasis being in favour of corporations rather than customers. 

The Governments' level of predicted costs of £5 million that retailers would be charged for the new ombudsman is challenged by the BRC and they questioned the need for such a body when there is already a supplier code, overseen by the Office of Fair Trading (OFT) which offers independent arbitration.
Source: British Retail Consortium
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Watch your credit file and avoid financial problems
On 13 January 2010, the Information Commissioner's Office (ICO) urged consumers to ensure that their credit reference file is accurate and up to date in 2010.

Millions of consumers use credit to help them through the year and it is essential that they make sure the information accessed by lenders is accurate. If the content of an individual's credit reference file is wrong or out of date, banks, shops and catalogue companies could turn down their request for credit.  Under the Data Protection Act every citizen has rights which allow us to obtain and protect their vital financial information. The ICO has a practical, easy to understand consumer guide detailing these rights (see link below).

If an individual discovers inaccurate information on their credit reference file, the Data Protection Act allows them to ask for the information to be corrected by the organisation that provided it to the credit reference agency. If, following this, the incorrect information remains on the credit reference file, the individual can complain to the ICO.
Source: http://www.ico.gov.uk/upload/documents/pressreleases/2010/credit_files_130110.pdf
Credit Explained
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The Competition Test could cost jobs
Last October, the Competition Commission (CC) recommended to the Department of Communities and Local Government (CLG)-and the devolved administrations in Scotland, Wales and Northern Ireland-that they take the necessary steps to introduce a competition test in planning decisions on larger grocery stores. The CC has been carrying out further analysis on the effectiveness, benefits, costs and proportionality of the competition test following a ruling by the Competition Appeal Tribunal (the Tribunal). The competition test would prevent supermarkets' groceries developments, including extensions to existing stores, by retailers with a strong presence in a local area, to make competing developments from rival retailers easier.The Consumer Guide is available from:

On 2 January 2010, the Telegraph reported that the industry had warned that twenty-five thousand new supermarket jobs will be blocked over the next decade if the Government's proposed Competition Test goes ahead. In fact, the controversial planning test - which is designed to stop any supermarket from becoming too dominant in any area - would also have prevented 5,000 jobs from being created between 2006 and 2008 if it had been in place: some 2,800 of those 5,000 jobs would have been at supermarkets other than Tesco, whose significant market share the test is presumed to be aimed at hobbling, according to industry research.

The Competition Commission published its final report into supermarkets in April 2008 and found that the UK groceries market was broadly competitive but proposed a raft of remedies, including an extended supplier code of practice, an industry ombudsman, remedies affecting restrictive covenants and the introduction of the Competition Test. While retailers such as Asda and J Sainsbury support the Competition Test, Tesco opposed it and appealed to the Competition Appeal Tribunal (CAT). The CAT upheld the appeal last year, saying that the Commission had failed to address its proportionality and effectiveness. However, last October the Commission recommended that a tweaked version of the test be implemented.
Source: The Telegraph article 2/1/2010.
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