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OFT launches code approval scheme to consumers

SMMT New Car Code first to gain approval

200/04    7 December 2004

The OFT launched the Society of Motor Manufacturers and Traders' (SMMT) New Car Code to consumers today. The SMMT is the first industry body to secure OFT approval for its consumer code of practice under the OFT's Consumer Codes Approval Scheme (CCAS).

The SMMT New Car Code sets out the standards that vehicle manufacturers have to comply with on new car sales; warranties on new cars and older cars where the manufacturer's warranty is still current; availability of replacement parts; advertising and complaints handling. All volume car makers, and the majority of smaller manufacturers, are signed up to the code. Over 99 per cent of the 2.5 million new car market will be underpinned by the code's provisions.

See SMMT website

By signing up to the OFT approved code, manufacturers have agreed to provide the benefits outlined within the code of practice to consumers. These include:

• an obligation on manufacturers to include in their warranties information on where consumers may seek redress
• access to the SMMT conciliation scheme which assists consumers in the event of a dispute
• an independent redress scheme (arbitration)
• a consumer guide clearly advising consumers of their rights and what SMMT members will deliver under the code
• staff training seminars to ensure that members understand their duties under the code and follow it in practice
• a new 'penalty points' system linked to compliance and a range of sanctions, including monetary fines, imposed on members for non-compliance with the code's provisions. SMMT donates the money to BEN, the motor industry charity
• regular customer surveys so that problem areas can be addressed.

All new cars will contain an explanatory leaflet about the New Car Code, so that customers have easy access to the code and how its provisions benefit them. It will also be promoted via adverts on petrol pumps and magazine adverts.

The OFT's Consumer Codes Approval Scheme will promote approved codes from a wide variety of sectors. It means that when consumers see the OFT Approved code logo they will know that the company displaying it has agreed to abide by a code of practice that is approved by the OFT. The OFT will only approve and promote codes that are shown to safeguard and promote consumers' interests beyond the basic requirements of the law.

Penny Boys, OFT Executive Director, said: 'The OFT codes scheme is deliberately rigorous and demands commitment to high standards of customer service from code sponsors and members. The OFT Approved code logo means consumers know they are dealing with supplier who has promised to treat them fairly if problems arise. Today's launch is a demonstration of our commitment to promoting the code scheme and our ongoing support to those code sponsors and businesses who meet its requirements.'

SMMT Chief Executive Christopher Macgowan said: 'OFT approval of our New Car Code is recognition of our commitment to delivering a really good service to customers. We are delighted that our work in developing a robust code that delivers on its promises of high standards has been recognised by the OFT.'

NOTES

1. The SMMT is the  trade association for the UK motor industry which representing some 600 member companies ranging from vehicle manufacturers, component and material suppliers to power train providers and design engineers. The signatories of the SMMT New Car Code of Practice (about 40 car manufacturers) represent the majority of the total new car market (99.05 per cent of new vehicle registrations in the UK – source MVRIS, 2002).

2. The Enterprise Act 2002 gives the OFT increased powers to help develop effective self-regulation through approving and promoting consumer codes of practice that meet the OFT's core criteria.

3. The OFT's Consumer Codes Approval Scheme aims to promote and safeguard consumers' interests by helping consumers identify better businesses and to encourage those businesses to raise standards of customer services  by meeting the OFT's core criteria.

4. The Vehicle Builders and Repairers Association Ltd has also secured OFT approval for their code of practice (see press release 169/04). Code sponsors that have completed stage one and are working towards approval of their code, are:  the Ombudsman of Estate Agents Company Ltd (OEA) (see press release 69a/02); the Direct Selling Association (see press release 84/02) and the Association of British Travel Agents (see press release 15/03).

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