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OFT launches doorstep selling investigation

PN 75/02      12 November 2002

The OFT has launched an investigation into doorstep selling following a super-complaint from the National Association of Citizens Advice Bureaux (NACAB).

A very wide range of goods and services are sold in the home. This facility is useful for many consumers and for some it is essential. Many of these sales are trouble free. The law gives consumers certain rights but these can depend on whether visits were solicited or unsolicited. There also appears to be some evidence, including that from NACAB, of practices such as high-pressure sales techniques and reliance on unfair contract terms. These can be particularly damaging to more vulnerable consumers. The OFT has therefore decided to examine what is going on in more detail.

The OFT will use its investigation powers - currently under Section 2 of the Fair Trading Act 1973 - to carry out a wide-ranging investigation into this area. The investigation will examine what goods and services are commonly sold in the home, problems experienced by consumers buying this way and why problems are associated with some products and services and not others. The OFT will also carry out case studies in some areas, such as home improvements and assisted products, examine the role of credit and look at the range of statutory and voluntary safeguards for consumers.

Announcing the investigation Penny Boys, Deputy Director General of Fair Trading, said:

'Buying in the home has many advantages for consumers - particularly those who rely on this facility such as the housebound. The aim of this investigation is to get a better understanding of this area, assess if any action is called for, and if so, what would be most effective.'

The investigation will be carried out by the Markets and Policy Initiatives division of the OFT. The possible outcomes of the investigation include:

• enforcement action by the OFT's competition and consumer regulation divisions
• a reference of the market to the Competition Commission
• recommendations that Government consider changes in laws and regulations and to regulators, self-regulatory bodies and others to consider changes to their rules
• campaigns to promote consumer education and awareness
• a clean bill of health.

NOTES

1. The Enterprise Act enacts the super-complaints procedure which allows a number of bodies to refer fast-track complaints to the OFT. These complaints focus on areas where the complainant suspects there are market structures or practices that are working against the interests of consumers. The OFT is obliged to publish a response within 90 days of receiving the super-complaint. The Act will come into force from spring 2003. Prior to the Enterprise Act coming into force, the OFT has agreed to consider super-complaints and respond within 90 days. Any investigations undertaken as a result of a super-complaint are currently initiated under Section 2 of the Fair Trading Act 1973.

2. The National Association of Citizens Advice Bureaux wrote to the OFT on 3 September 2002 and submitted its super-complaint regarding sales in the home enclosing a copy of its report Door to Door: CAB clients' experience of doorstep selling.

3. Download the OFT's response to NACAB's super-complaint in pdf format (63 kb)

4. The Consumer Protection (Cancellation of Contracts Concluded Away From Business Premises) Regulations 1987 provide a seven day cooling-off period in which contracts over £35 concluded during an unsolicited visit can be cancelled. Businesses are required to provide a cancellation form (although a cancellation will still be valid if sent in an ordinary letter). If the business does not provide a cancellation form, the contract cannot be enforced and the business is committing a criminal offence. Certain types of contract such as insurance or food and drink are excluded from the regulations.

5. Different cancellation rights apply to credit agreements under the Consumer Credit Act 1974.

6. Consumers who buy goods or services at home enjoy the same protection as if they bought them on trade premises under legislation such as:

• Sale of Goods Act 1979 (as amended by sale and Supply of Goods Act 1994)
• Supply of Goods and Services Act 1982
• Trade Descriptions Act 1968
• Unfair Terms in Consumer Contracts Regulations 1999
• Control of Misleading Advertisements Regulations 1988

7. What consumers can do to protect themselves:

• ask the salesperson for identification
• if you don't want the product don't let the salesperson in
• if given anything detailed to read get the salesperson to call back so you have time to read at your own pace. Take independent advice if there is anything you don't understand
• treat special offers with caution
• speak to your Citizens Advice Bureau or local Trading Standards department if you want advice.

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

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