The criteria for new OFT-approved codes are outlined in a consultation document published today. Effective compliance and disputes resolution are important requirements.
The new approach has two linked stages, corresponding to the OFT's powers and resources now, and the situation when key legislation changes have been made and OFT's resources increased.
At stage one the OFT will encourage codes that actually promise to deliver. At stage two, the OFT will give a 'better trader' logo to codes that prove they can deliver. Test will include compliance audits, evidence of effective dispute resolution, mystery shopping and complaint handling.
Sectors for priority targeting by the OFT include: used cars, car repair and servicing, credit, funerals, travel, estate agents and direct marketing.
Trade associations currently sponsoring codes of practice will have to prove they meet the new criteria. They will not be able to claim existing OFT support beyond December this year.
John Vickers, director general of fair trading, said: 'Voluntary codes of practice can protect consumers' interests well but only if they work. Success so far has been decidedly patchy. Effectiveness is ultimately down to what businesses do and consumer awareness.
'The OFT can offer proactive encouragement for codes that promise and prove they deliver benefits to consumers. Good codes bring consumer benefits that go beyond the requirements of law. They provide machinery for compliance and ready redress for consumers.
'There can be no presumption that codes supported in the past will necessarily be approved. A fresh start is needed.
'Sponsors of existing codes can continue to refer to OFT support for the rest of this year and we hope many will want to be part of the new regime, along with new code sponsors. Robust codes of practice, properly administered will benefit business and consumers.'
The OFT currently supports codes involving 42 trade associations in 24 sectors.
The OFT's new approach to consumer codes of practice - a consultation paper will be available on the OFT www.oft.gov.uk.
1. The new approach on codes was announced in a speech by John Vickers to the annual dinner of the finance and leasing association.
2. The existing codes currently supported by the OFT are (by sector):
Credit Services Association Limited, Finance and Leasing Association,
London Personal Finance Association Limited, The Consumer Credit
Association of the United Kingdom, The Consumer Credit Trade
Association, The National Consumer Credit Federation.
Domestic electrical appliance servicing:
The Association of Manufacturers of Domestic Electrical Appliances.
Extended warranties on electrical goods:
British Retail Consortium.
Selling and servicing of electrical/electronic appliances:
The Radio, Electrical and Television Retailers' Association (RETRA)
Domestic laundry and cleaning services:
Textile Services Association Ltd.
Glass and Glazing Federation.
Estate agents - residential:
National Association of Estate Agents, Ombudsman for Estate Agents,
Royal Institution of Chartered Surveyors.
Instock Footwear Suppliers Association Ltd, The British Footwear
Association, The Independent Footwear Retailers' Association.
Society of Master Shoe Repairers Ltd.
British Holiday and Home Parks Association Ltd, National Caravan
Association of British Introduction Agencies.
Mechanical breakdown insurance:
Society of Motor Manufacturers and Traders Ltd.
Retail Motor Industry Federation Ltd, Scottish Motor Trade
Association Ltd, Society of Motor Manufacturers & Traders.
Motor Cycle Industry Association.
Vehicle leasing and rental:
British Vehicle Rental and Leasing Association.
Vehicle body repairs:
The Vehicle Builders & Repairers Association Ltd.
Tyre and fast fit industry:
The National Tyre Distributors Association.
Association of British Travel Agents.
Association of British Travel Agents.
Master Photographers Association, Photo Marketing Association
International (UK) Ltd, Professional Photographic Laboratories
Association, The British Imaging & Photographic Association, The
British Institute of Professional Photography, The British
Photographic & Imaging Association (BPIA), The National
The Direct Selling Association Ltd.
The Mail Order Traders' Association.
Mail order publishing, direct marketing, list and database suppliers:
The Direct Marketing Association (UK) Ltd.
Tickets - resale for all forms of entertainment:
The Society of Ticket Agents and Retailers.
3. The consultation runs until the end of May 2001. In late summer the OFT will begin assessing selected codes against the core criteria. In November it will announce the codes that meet the criteria and are ready to be considered for the OFT 'better trader' logo.
4. New legislation would be required for some aspects of the new scheme, in particular to enable the Office to market a 'better trader' logo.