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OFT launches codes regime to business

ABTA code achieves stage one status

PN 15/03    14 February 2003

The OFT today unveiled its new 'approved code' logo at the launch of its consumer codes approval scheme to UK business. The new regime will benefit consumers by driving up standards of customer service and will reward qualifying businesses by helping to build consumer confidence.

The Association of British Travel Agents Ltd (ABTA) is the latest trade body to have successfully completed stage one of the two-stage process for OFT approval of its consumer code of practice. This means that its revised code of practice meets the core criteria set out by the OFT. The next stage will involve ABTA demonstrating that the promises made at stage one have been delivered in practice.

ABTA is the fourth trade association to achieve stage one status for its code of practice and joins the Vehicle Builders and Repairers Association Ltd (PN 69b/02), the Ombudsman for Estate Agents Company Ltd (PN 69a/02) and the Direct Selling Association (84/02).

The code approval scheme consists of two stages:

Stage one – the code sponsor makes a promise that its code meets the OFT's core criteria in principle. 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 and that consumer disputes are properly resolved.

Codes that successfully achieve the second stage will be able to carry the OFT 'approved code’ logo and receive official promotion. The OFT will only approve and promote codes that are shown to safeguard and promote consumers' interests beyond the basic requirements of the law. The first approved codes are expected to be announced in the autumn.

Acknowledging the work already carried out by ABTA and other code sponsors, John Vickers, Director General of Fair Trading, said:

'Rigorous codes of practice are a key plank of effective self-regulation. The Enterprise Act empowers the OFT to help self-regulation through promoting good codes which are of real value to consumers and fair-dealing businesses. The OFT's new codes regime is now well under way.'

The OFT is currently developing a dedicated codes website which will be operational later this year and will be promoting the codes approval scheme through a programme of events targeted at UK businesses throughout the UK. A launch promoting the scheme to consumers is planned for later this year.

NOTES

1. ABTA is a trade association representing over 6,698 travel agents and 999 tour operators in the UK. Over 80 per cent of the UK's package holidays are sold through ABTA members.

2. ABTA submitted its code in September 2001 for assessment under the OFT's new approach for approving and promoting business-to-consumer codes of practice. Its code promises:

• increased independence in its internal disciplinary procedures
• a procedure for independent review, by ABTA's appeal bBoard, of decisions made by the code committee
• wider consultation with consumer groups.

ABTA has produced a revised guide that sets out, in clear language, the benefits the code has to offer consumers. This guide, 'Building Confidence in Travel', includes a summary of the provisions of the code and emphasises the fact that the code covers pre-booking to after-sales and complaints procedures. For further details about ABTA and to view its code of practice, visit its website

3. 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'. 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 (see PN 09/01). Two additional sectors (furniture and domestic appliance repair) were added in December 2002 and invited to apply.

4. The Enterprise Act, which received Royal Assent on 8 November 2002, will broaden the OFT's role in promoting self-regulation through codes of practice.

5. 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 Act 2002 will replace the office of the DGFT with the OFT, to which will be transferred the DGFT's functions. The relevant provisions of the Enterprise Act are expected to come into force in April 2003.

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