Discussion on self regulation and industry-led compliance

4 March 2009

The OFT is initiating a debate on the extent to which self regulation and industry-led compliance with consumer law can assist in making markets work well for consumers. The better regulation agenda has stimulated increasing interest across Government, regulators and business in the use of innovative approaches to achieving compliance, enforcing legislation and solving problems in markets. We want to move the debate on and consider how the tools of self regulation and industry-led compliance can best be used to advance the goal of consumer protection.
 
The OFT already leads the way with the Consumer Codes Approval Scheme (CCAS) and the relationships being developed with ‘established means’ to resolve breaches of the Consumer Protection from Unfair Trading Regulations. The latter has been the subject of a recent OFT consultation exercise. In addition we worked with The Travel Association (ABTA) in 2007 on misleading pricing of holidays which resulted in ABTA requiring its members to address the issue or face action under their Code of Conduct.

We believe there are more opportunities to take this type of approach and potentially a wide variety of self regulatory bodies and initiatives within the consumer law sphere with whom we could work. We want to understand more about the factors which determine whether self regulation is successful or not and the principles which underpin the most successful examples.

However, we also recognise that self regulation carries risks. Not all initiatives are successful in delivering better consumer protection and, depending on how they are organised, they can potentially raise competition problems.

Like all government bodies, the OFT has to ensure that its limited resources are used efficiently. With this in mind we need to consider in what circumstances it is appropriate to work with, monitor and support self regulation and industry-led compliance and assess the benefits to be derived.     

We want to engage with business, consumer and trade bodies, Local Authority Trading Standards Services, regulators, academics and other government departments on all these issues to help us develop our thinking. We are issuing an economics paper to complement this discussion paper and will be hosting a conference in March 2009.

We are initiating this debate in respect of consumer issues – problems that would normally be tackled using powers under consumer legislation - since it is as an alternative to consumer enforcement that self regulation has traditionally had the biggest role to play and where we think there is scope for more to be done. Depending on the conclusions we reach, we may in due course look more widely to see if self regulation has a greater role to play in respect of our other responsibilities. We also recognise that the thinking that emerges from this work may be of interest to other bodies which will find the issues discussed relevant to their own work.

Download Business leadership in consumer protection - a discussion document on self regulation and industry-led compliance (pdf 309 kb)

Responding to this discussion paper

We welcome views on any issues raised by this document and in particular responses to the questions posed in Chapter 5. We seek comments from any interested parties and would ask respondents to supply a brief summary of the interests or organisations they represent, where appropriate.

We ask that any comments be submitted in writing by 30 April 2009 to:

Discussion paper: Business Leadership in Consumer Protection
Policy Group - 3C16
Office of Fair Trading
Fleetbank House
2-6 Salisbury Square
London
EC4Y 8JX

Fax: 020 7211 8757
Email: kate.damania@oft.gsi.gov.uk

There is also an opportunity to attend a conference in Central London on 18 March 2009 to discuss these issues more widely with a range of interested stakeholders. If you would like to attend this conference, please register online on the COI events website or contact Kate Damania on the email address above.

Data use statement for responses

Personal data received in response to this discussion paper will be processed in accordance with the Data Protection Act 1998. All information received (including personal data) is subject to Part 9 of the Enterprise Act 2002. We may choose to refer to comments received in response to this discussion paper in future publications. In deciding whether to do so, we will have regard to the need for excluding from publication, as far as that is practicable, any information relating to the private affairs of an individual or any commercial information relating to a business which, if published, would or might, in our opinion, significantly harm the individual's interests, or, as the case may be, the legitimate business interests of that business. If you consider that your response contains such information, that information should be marked 'confidential information' and an explanation given as to why you consider it is confidential.

Please note that information provided in response to this discussion document, including personal information, may be the subject of requests from the public for information under the Freedom of Information Act 2000. In considering such requests for information we will take full account of any reasons provided by respondents in support of confidentiality, the Data Protection Act 1998 and our obligations under Part 9 of the Enterprise Act 2002.

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