Study shows OFT codes scheme is good for business and consumers

152/06 31 October 2006

The majority of members of the OFT's Consumer Codes Approval Scheme (CCAS) find that the benefits of membership outweigh the costs, according to an evaluation study published today.

Download the Review of the impact on business of the Consumer Codes Approval Scheme (pdf 568 kb)

Download the OFT comments (pdf 102 kb)

The aim of the Consumer Codes Approval Scheme is to promote and safeguard consumers' interests by helping consumers identify better businesses and to encourage businesses to raise their standards of customer service. The study reviewed the impact of the scheme on businesses in the motor vehicle bodywork repair sector, as well as the estate agency and travel sectors. It found that:

code sponsors are positive that the code is having the desired effects - both in improving customer service and enhancing operating conditions for businesses
consumers can expect a better approach to customer service and satisfaction from businesses that are members of an OFT approved code than from those outside of the scheme. Complaints for members experienced a greater fall than those for non-members
the costs to CCAS members of implementing and maintaining an OFT approved code do not appear to be substantial. On average members report that ongoing costs of compliance with their codes have risen by only 1.5 per cent since obtaining OFT approval. Ninety five per cent of businesses signed up to an OFT approved code reported 'no negative effects experienced', and
the scheme has benefited code sponsors directly, enhancing their reputation and increasing demand for membership.

In addition, development issues for the scheme's future were also highlighted such as improving the speed of the approval process.

Colin Brown, OFT Policy Director, said:

'The report shows that the CCAS gives consumers a valuable indicator of customer service quality and that member businesses like the scheme. It's an excellent example of the OFT working imaginatively with business to deliver consumer benefits with minimal extra burdens for members. The report also demonstrates our continued commitment to monitor and improve the scheme.'

NOTES

1. The evaluation was conducted by the Centre for Economics and Business Research Ltd with support from market research agency Opinion Research Business. For further information on the CCAS criteria see the Codes publications area of the website.

2. Five codes were approved at the time the survey was undertaken (April 2006). They were:

Society of Motor Manufacturers and Traders' New Car Code of Practice
Vehicle Builders and Repairers Association Limited's consumer code of practice
Direct Selling Association's consumer code of practice
Ombudsman for Estate Agents Company Limited's code of practice
Association of British Travel Agents' (ABTA) code of practice

ABTA withdrew from the scheme on 1 September 2006. For more information see press release 127/06.

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