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New law gives consumers better protection

DEPARTMENT FOR BUSINESS, ENTERPRISE AND REGULATORY REFORM News Release (2007/021) issued by The Government News Network on 20 July 2007

Consumers will have stronger protection from rogue estate agents and traders as a landmark Bill becomes law.

Consumer Minister Gareth Thomas said:

"This new law gives consumers important new protections. It cracks down on rogue estate agents and dodgy doorstep sellers, and introduces powerful redress schemes, which can award compensation, for consumers in the energy and postal services sectors.

"We know that many people are unhappy with the service they receive from estate agents and many agents are angry that their reputation is damaged by a dishonest minority. This law will drive up standards and require all estate agents to give their customers a good service.

"Consumers deserve a fair deal and honest, well-run businesses should not be undercut by competitors who flout the law. Our measures are good for business and good for the consumer."

Measures in the Consumer, Estate Agents and Redress Act will:

* make it compulsory for all estate agents to belong to an independent, ombudsman with powers to award compensation to buyers or sellers; agents who refuse to join could be investigated and banned from the market
* require estate agents to keep written records of dealings with buyers and sellers for six years, to be inspected without notice

* give greater powers to the OFT to remove rogue estate agents from the market

* allow cancellation and cooling-off rights to be extended to solicited visits, as well as unsolicited visits - making it harder for rogue traders to take advantage of vulnerable consumers in their home

* establish powerful redress schemes, which guarantee complaint resolution and can award compensation, for consumers in the energy and postal services sectors

* streamline and strengthen consumer representation by creating a new stronger consumer advocate, bringing together the National Consumer Council, Energywatch and Postwatch

Ed Mayo, Chief Executive of the National consumer Council said:

"This is a real victory for consumers and puts companies with shoddy services on notice that they will need to clean up their act.

"This is also a powerful piece of legislation which has benefited from cross-party input and support. More than ever before, it confirms that, in a competitive world, what is good for consumers is good for Britain".

All parts of the Act will come into force in the course of 2008.

Notes for editors

1. In 2004 there were approximately 1.8 million house sales in England, Wales and Scotland with a total value of around £266 billion

2. Estate agents make around £2.5 billion in commission fees a year in revenue from the sale of residential property in England and Wales

3. Research shows that 21% of sellers and 23% of buyers experience problems with estate agents
4. Further information on the Consumers, Estate Agents and Redress Bill is available at http://www.berr.gov.uk/consumers/consumersbill/index.html.

5. The Bill is part of a wider programme of reform to empower consumers. The Unfair Commercial Practices Directive (UCPD) is another powerful tool that will protect consumers by outlawing a host of deceptive and intimidating sales practices that are unfair but not currently illegal. It will also benefit honest businesses, by simplifying consumer protection legislation and clamping down on rogue traders. BERR and the OFT are currently seeking views on draft regulations and guidance before they become UK law in April 2008.

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