Newsroom

Young consumers can be smart consumers, says OFT

87/07    20 June 2007

The OFT is today highlighting problem sectors for young consumers as schools from across the country take part in the final of a competition testing pupils' consumer skills in areas such as shopping and finance.

Research by Mintel shows that 7-19 year-olds spend £13.9billion every year using pocket money alone and cash is primarily spent on clothes, computer games, petrol, savings and going out. But a study carried out by the Financial Services Authority revealed a widespread lack of financial knowledge among young people and lack of awareness when choosing products.

The final of the Young Consumers of the Year competition for 14-18 years-old is organised by the Trading Standards Institute and follows regional heats involving hundreds of UK schools. The final in Manchester on June 27 involving 12 schools is the last stage of a competition which aims to develop consumer skills and knowledge and improve confidence in areas such as money and finance, food and health, safety and the environment.

The OFT has today identified some of the most typical consumer problems and scams affecting young people.

• Text messaging scams - young people are targets of text messages, which might try and get callers to call premium rate numbers, including messages to 'ring this number for an urgent message from your mum and dad' or 'someone you know fancies you' which end up costing £1.50 for the call.
• Ringtone scams - involve companies not sending ringtones out or signing young people up to receive regular ringtones. To stop them, text the number back with the words STOP ALL. If this doesn't work you can report them to the premium rate regulator ICSTIS.
• Debt and finance - the Consumer Credit Counselling Service has found that the average amount owed by 18-24 year-olds in debt is £12,790 (excluding student loans). Before buying, stop and think if you can afford it. Buying on credit can mean you end up paying a lot more in the end.
• Pre-owned computer games - these should still work and be in a reasonable condition. When buying from a retailer the law states that goods must not be damaged unless the person selling the item points these faults out.
• Internet sites - when buying on the internet, read terms and conditions, do not put personal details or credit/debit card details in an email or personal details on social networking sites, and print out any confirmation emails.

OFT Consumer Education's Paul Burton said:

'The amount spent by young people is enormous and they are increasingly involved in spending decisions whether it is mobile phones, computer games or traditional areas like clothes. Having a skilled group of consumers shopping around and aware of their rights benefits us all. The participants in Young Consumers of the Year gain valuable skills and a grasp of key consumer issues that they can pass on to parents, friends and adults.'

Case studies involving young people are available as well as interviews with participants and OFT representatives before and during the event. Please contact the OFT press office for information.

NOTES

1. How would you do? The hundreds of schools participating in the Young Consumers of the Year competition successfully answered questions on food and drink, safety and the environment, consumer organisations and finance. Sample questions were a) name the government body responsible for food safety? [Food Standards Agency]; b) Toys with small, detachable parts must not be sold to children under what age? [three years]; c) If you buy a shirt labeled 100% silk and then find that it is 50% polyester, what law has been broken [Trade Descriptions Act 1968]; d) Which Government department is responsible for collecting income tax? [HM Revenue and Customs]; e) A decline in general economic activity over a six month period is called what? [a recession].

2. The Financial Services Authority's 'Levels of Financial Capability in the UK: Results of a Baseline Survey' in March 2006 found few young people take responsibility for money management and are particularly prone for living for the day. Mintel's report, Pocket Money Market Intelligence June 2006 found that pocket money is worth £13.9billion for the 7-19 age group. The Consumer Credit Counselling Service has found that the average debt of people aged 18-24 is £12,790. This is obtained from CCC's data on 290,000 people in debt and gained through calls and visits to their counsellors.

3. Young Consumers of The Year is a competition that involves hundreds of schools and youth groups from across the country, that rise to the challenge to become the nation's top young consumers of 2007. Coordinated by the Trading Standards Institute, it invites teams of four aged between 14 and 18 years old to compete in a knockout quiz and has links to several different areas of the national curriculum.

4. The competition is sponsored by the Office of Fair Trading, Argos, Consumer Education Liaison Group, Experian, Food Standards Agency, Financial Services Authority, and the British Toy & Hobby Association.

5. Regional winners have been invited to attend the final which will be held at Manchester Central in Manchester on 27 June 2007. There are prizes for all contestants with winners collecting £1000 for their school and the coveted Young Consumers of the Year Trophy, along with many other prizes.

6. The 12 schools in the final are: St Albans RC High School, Wales; Caldicot Comprehensive School, Wales; Chatham House Grammar School, South East; Altrincham Grammar School for Boys, Manchester; Portobello High School, Scotland; Holy Cross High School, Scotland; Arthur Terry School, West Midlands; Heanor Gate Science College, East Midlands; Plymouth College, Southern; Allerton High School, West Yorkshire; Chislehurst and Sidcup Grammar School, London; St Joseph's College, Northern. 

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