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OEA code on the home stretch to OFT approval

PN 69a/02     28 October 2002

The Ombudsman for Estate Agents Company Ltd (OEA Company) has passed its first milestone towards OFT approval for its consumer code of practice.

The industry body has successfully completed stage one of the two-stage process for OFT approval. This means that the code of practice meets the core criteria set out by the OFT. The next stage will involve the OEA Company demonstrating to the OFT that the promises made at stage one have been delivered in practice.

The OEA Company code of practice promises:

• a disciplinary council to deal with members who do not deliver the promises in the code
• unrestricted access for consumers to the independent Ombudsman Scheme if complaints and conciliation procedures do not resolve a dispute
• customer surveys aimed at testing levels of code compliance and consumer satisfaction
• guidance for members on the use of fairer, clearer contract provisions.

The OEA Company must now prove that these processes are working before receiving approval at stage two. The OFT will assess the code sponsor's performance in monitoring various aspects of the new code's effectiveness.

Codes that achieve approval at stage two will carry an OFT logo and receive official promotion. Only codes that are shown to safeguard and promote consumers' interests will be approved.

Acknowledging the OEA Company's work towards stage one, Penny Boys, Deputy Director General of Fair Trading, said:

'I warmly welcome the steps taken by the OEA. The new code approval scheme will raise standards of customer service and I hope more industry bodies will follow suit. I look forward to working with them to ensure we can give them full approval at stage two.'

NOTES

1. The OEA Company (The Ombudsman for Estate Agents Company Ltd) was established to run the Ombudsman for Estate Agents Scheme.

2. The OEA Company submitted its code on 5 September 2001 for assessment under the OFT's new approach to approving and promoting business-to-consumer codes of practice.

3. The OFT has set out new core criteria for codes to ensure they are effective in safeguarding and promoting consumer interests. The criteria cover the organisation of the code sponsor, the preparation and content of the code, complaints handling procedures, monitoring, compliance and publicity.

4. The new regime consists of two co-dependent stages:
Stage one - the code sponsor makes a promise that its code in principle meets the OFT's core criteria. The sponsor must make sure its code contains measures designed to remove or ease consumer concerns and undesirable trading practices in its sector.

Stage two - the code sponsor must prove its code lives up to the initial promise. The burden of proof lies with the sponsor. The sponsor must show that the code is being effectively implemented by members that claim to adhere to it and that consumer disputes are properly resolved.

Only when a code sponsor has passed both stages and an evaluation of how effective the code is working has been made will the code receive OFT approval.

5. The OFT set out its criteria for the selection of priority sectors for the new code approval scheme in February 2001 with the consultation paper The OFT's new approach to codes of practice (pdf file 84 kb). Seven sectors were listed - used cars, car repair and servicing, credit, funerals, travel, estate agents and direct marketing. Code sponsors were invited to submit their codes for assessment.

6. The Enterprise Bill, scheduled for Royal Assent in November 2002, will broaden the OFT's role in promoting self-regulation through codes of practice.

7. In this press release the functions of the Director General of Fair Trading (DGFT) are for simplicity described as the functions of 'the OFT'. The Enterprise Bill proposes to replace the office of the DGFT with the OFT, to which would be transferred the DGFT's functions.

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