OFT publishes Annual Report 2009-10
84/10 27 July 2010
The OFT has today published its Annual Report for the last financial year and an estimate of its financial benefits to consumers.
The report shows that the OFT has saved consumers at least £359m per year on average over the period 2007 to 2010 in competition enforcement, consumer protection, merger and markets work across the economy. This is seven times the OFT's average annual costs and exceeds the five-to-one cost target set by HM Treasury.
Key OFT achievements during 2009-10 include:
- Taking infringement decisions against 109 firms for breaches of competition law, including in the construction and financial services sector. Overall, the OFT imposed or agreed fines of more than £197million.
- Protecting consumers from unfair commercial practices and unfair contract terms, including securing an important precedent through a High Court order to prevent a letting agency using certain unfair terms in its agreements, ensuring that firms offering sale and rent-back agreed to change or withdraw unsubstantiated advertising, and the OFT's first criminal consumer protection investigation, into a suspected unlawful pyramid scheme.
- Publishing or launching market studies on home buying and selling, Isle of Wight ferry services, second-hand cars and corporate insolvency, resulting in practical recommendations to ensure benefits for consumers in these sectors.
- Continuing to protect consumers from potential reductions in competition as a result of mergers, including overseeing the divestment of more than 100 stores following The Co-operative Group's acquisition of around 880 Somerfield shops.
- Protecting consumers, especially vulnerable consumers, in the credit market through targeted use of powers in relation to high risk activities such as debt collecting, debt management, secured lending, and high-cost credit.
- Conducting campaigns to raise consumer awareness of scams, rogue doorstep traders, Christmas savings schemes and legal rights when purchasing goods and services.
The OFT has also worked to improve the transparency of its processes, external engagement, competition and consumer advocacy, and the evaluation of its work while reducing burdens on businesses. Looking ahead, the OFT will continue to use competition and consumer powers to drive growth and target enforcement activity at areas that pose the most risk to consumers. It will also develop further its strategy for online consumer protection.
Philip Collins, OFT Chairman, said:
'The uncertain economic climate means that the OFT's role in driving economic growth through ensuring competitive, well-functioning markets and effective consumer protection is more vital than ever. This year we have continued our high impact enforcement activities as well as examining markets which are not functioning well. In this we continue to benefit from being able to draw on a wide range of consumer and competition tools to ensure targeted and proportionate interventions.'
- The Annual Report 2009-10 was laid before Parliament on 20 July 2010. It is available from TSO, PO Box 29, Norwich NR3 1GN. Tel 0870 600 5522. Price: £19.75. Download the Annual Report and Positive Impact Report.
- The OFT-HM Treasury performance framework agreement sets out that each annual report should provide quantitative evidence of how the OFT delivers direct financial benefits to consumers of at least five times that of its cost to the taxpayer across the spending review. Covering 2007-10, the Positive Impact Report estimates that on average per year, £125m is saved by consumers through work carried out by the OFT on mergers, £107m by its markets work, £84m by its competition enforcement and £42m by its consumer protection enforcement. Estimates are based on conservative assumptions and reflect the direct financial benefits to consumers of OFT work and do not include benefits arising from the deterrent effect in the above areas or other (wider) benefits.
- The Positive Impact Report also sets out that OFT-managed consumer advice service Consumer Direct generated £129 million in consumer benefits over 2009-10 (excluding complaints relating to energy and post). Given its cost base of £12.2m, this represents a benefit-to-cost ratio of over 10:1. Consumer Direct advisors answered over 1.7m calls and emails in 2009-10.
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