Update on Office of Fair Trading

April 16, 2014   //   No Comments

As part of the Government’s reforms to the arrangements for competition, consumer protection and consumer credit regulation, the Office of Fair Trading (OFT) closes on 31 March 2014, and its work and responsibilities pass to a number of different bodies.

These are some of the issues SAIF has liaised with the OFT on in recent times:

Transparency of ownership

A key recommendation from the OFT’s 2001 report into the funeral industry was that every funeral outlet should publicise, in a prominent place, details of the organisation which has ultimate control of the business, preferably on the outside of the premises and on all promotional material relating to that business including that published in local directories.

The Companies (Trading Disclosures) Regulations 2008 require that a funeral director which is a company must display the company’s registered name at its registered office and inspection place(s), and any other location at which it carries on business. The signs must be in a prominent position and clearly legible to the naked eye so they will readily be seen by visitors and can be read with ease. The funeral director must also display its registered company name on all business correspondence and documentation including letters, notices, official publications, and websites (it does not have to do so on every page of a website, but must place this information so that it can be easily found and read).

If the way that any advertising material, or name, or premises is presented, incorrectly suggests that the business is in fact a small business (perhaps a family firm) rather than a franchise of a larger entity, or a company ultimately owned/controlled by a large company, this may be material information and may amount to a breach of the CPRs (misleading action or omission under Regulations 5 and 6).

The Cancellation of Contracts made in a Consumer’s Home or Place of Work, etc Regulations 2008 (the ‘Doorstep Selling Regulations’)

Contracts for the supply of goods or services related to a funeral are covered by the Doorstep Selling Regulations. These regulations provide consumers with a right to cancel in certain circumstances.

These regulations apply to a contract which is made during a visit by a trader to a consumer’s home, place of work or to the home of another individual. In such circumstances at the time the contract is made a trader must give the consumer a written notice of his right to cancel the contract. The consumer has the right to cancel within seven days. Failure to give such a notice is a criminal offence.

If a consumer wishes the contract to commence before the end of the cancellation period, the consumer must request this in writing. If any goods or services are provided following such a written request, and the consumer cancels, the consumer will be under a duty to pay for the goods or service provided.

Competition and consumer protection

The Competition and Markets Authority (CMA) will bring together the Competition Commission (CC) and the competition and certain consumer functions of the OFT in a single body. The CMA will promote competition, within and outside the UK, for the benefit of consumers.

The CMA was established under the Enterprise and Regulatory Reform Act 2013 and came into being in October 2013. It takes on its full powers and responsibilities, such as competition law enforcement, market studies and investigations, and merger control, on 1 April 2014. Visit the CMA’s pages on GOV UK for more information.

On 1 April 2013, local authority Trading Standards Services took on the lead role in enforcing consumer protection law, including at the national level. The OFT, and from 1 April 2014 the CMA, retains its powers to enforce consumer law, with lead responsibility on unfair contract terms, using them to tackle widespread practices and market conditions that make it difficult for consumers to exercise choice or to seek out the best deal – for example, where consumers are prevented from switching suppliers by unfair contracts or where misleading pricing practices are widely used.

A number of sectoral regulators share concurrent competition and consumer powers with the OFT, and will continue to share these powers with the CMA. This includes Ofcom, Ofgem, the Office of the Rail Regulator, OFWAT, the Civil Aviation Authority, the Financial Conduct Authority and Monitor (competition powers only).

Consumer credit

On 1 April 2014, the Financial Conduct Authority (FCA), which regulates the financial services industry in the UK, becomes the regulator for the consumer credit industry under a new, different regulatory regime. The FCA will authorise firms to undertake credit-related activity, and enforce consumer credit law and regulation. For more information, see the FCA’s website.