The BIS review could lead to the biggest changes seen in the consumer landscape for a generation. There are many issues to be decided which will have a critical impact on the future of consumer protection in the UK.
The OFT agrees with BIS's overarching aims of:
On 27 October 2011 the OFT responded to the BIS consultation Empowering and protecting consumers.
The system for consumer enforcement must be able to address the full range of detriment consumers can suffer when buying goods and services: it must tackle rogues, support businesses that wish to comply, and deal with market-wide problems.
The UK consumer regime currently allows for different types of interventions to suit different types of problems, from criminal and civil enforcement to other compliance tools such as business advice, consumer education, and self-regulation. It is vital that this flexibility is preserved along with the current range of expertise.
The OFT believes there needs to be stronger shared leadership in prioritising cases - the Joint Enforcement Board (JEB) is the best option in the consultation as it will increase joint leadership while minimising disruption and loss of existing expertise.
There will always be cases that cannot be taken due to lack of resource, but the system must make sure that the cases that do need to be taken don't fall through a gap due to resources being in the wrong place or because of unclear responsibilities.
The JEB would bring together representatives of the Trading Standards Service and the OFT, and potentially other interested bodies, to set national enforcement priorities. It would choose the most important cross-boundary enforcement cases and agree who is best placed to take them. In this respect it is similar to the option of the Trading Standards Policy Board but has the advantage of explicitly including joint delivery by the TSS and the OFT. The other key benefits of the JEB in comparison to the other options in the BIS consultation are that it:
Consumer and competition enforcement and other work are closely linked and are led most effectively and efficiently nationally in an integrated agency - as is increasingly the case in other leading economies. The OFT (and in future the CMA) should therefore retain an important consumer enforcement role.
Many of the key consumer problems at national level are complex and market-wide, involving the business models of national and multi-national businesses. These issues require the same detailed analysis of effects in the market and appetite for litigation risk as competition enforcement, together with an analysis of how competition will be impacted by the resulting change in business behaviour. Making the correct judgements on these issues is critical for economic growth. Sometimes competition powers may need to be used alongside, or as an alternative to, consumer powers.
As a consumer advocate Citizens Advice and Citizens Advice Scotland should have research and analytical capabilities, but the ability to examine markets from both a consumer and competition perspective is a unique feature of the current regime which cannot be split into pure 'consumer' studies and 'others'.
A core strength of the market study system is the ability to look beyond individual breaches of consumer or competition law and examine whole markets to assess the best way of remedying problems. The OFT does this by bringing together both competition and consumer analysis to publish authoritative reports balancing the market and consumer perspectives. It is often extremely difficult to know at the outset of a market study whether a given issue is a consumer, a competition or a 'mixed' problem. Once the underlying causes become clear, a requirement to transfer studies between agencies would add complexity, risking duplication and delay.
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