Effective Enforcement Key to Consumer Protection

3.35.34pm BST (GMT +0100) Tue 22nd Jul 2003

On the day the European Commission's published proposals to protect consumers from cross-border scams, Vincent Cable MP, Liberal Democrat Shadow DT Secretary, pointed out that although investigating 7,000 unfair contract cases since 1997, the OFT have only brought one case to court since 1995 - and that failed.

Dr Cable said: "These proposals are all well and good, but unless offenders investigated and pursued offenders in a timely fashion, then consumer protection legislation is not worth the paper it is written on."

"Recent statistics show that the Office of Fair Trading has received almost 7,000 complaints regarding unfair contract terms since 1997; only 1 case was taken to Court - and that proved to be unsuccessful. 125 complaints have been open for more than 2 years."

"Effective enforcement is required if consumer protection legislation is to have any teeth. Speedy investigation is an essential part of limiting the damage that these rogues can do and deterring future market abuse."

ENDS

The Commission has today adopted a proposal for a regulation which will link up national enforcement authorities and enable them to take co-ordinated action against rogue traders who abuse the freedom of the EU's Internal Market in order to deceive consumers. The press release is available at:

http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=IP/03/1067|0|RAPID&lg=EN&display=

Answers to parliamentary questions

Unfair Contract Terms (Official Report 16 Jul 2003 : Column 383W) Dr. Cable: To ask the Secretary of State for Trade and Industry how many complaints have been received alleging unfair contract terms under the Unfair Terms in Consumer Contracts Regulations 1999 in each year since 1997; how many of these complaints have been open for more than two years; and how many successful prosecutions there have been in each year since 1997. [125825]

Mr. Sutcliffe: The Office of Fair Trading's (OFT) figures for complaints by calendar years are:

1997: 1,045

1998: 1,110

1999: 1,359

2000: 1,202

2000: 1,179

2002: 1,048

Figures for the last two financial years are:

2001-02: 1,076

2002-03: 1,055

At the end of the last financial year, 125 cases had been open for over two years.

OFT has no power to undertake prosecutions as such for the use of unfair terms. Its power is to seek injunctions to prevent the use of unfair terms. But OFT may accept undertakings not to use unfair terms in lieu of seeking injunctions and in nearly all cases it secures such improvements in standard contract terms in this way, through consultation and negotiation.

Since 1995, OFT has secured some 900 undertakings from businesses not to use unfair terms. These undertakings govern the use of some 5,000 unfair terms. In only one case, that of 'Director General of Fair Trading v. First National Bank', has the OFT had to take legal action to stop the use of a term it considered unfair. In that case, the House of Lords reversed the decision of the Court of Appeal and decided that the term in question was not unfair.