Office of Fair Trading
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OFT launches market study into consumer contracts

The OFT has today launched a market study to examine when, how and why contracts may cause difficulties for consumers.

The OFT intends to look at how well consumers understand typical contracts and how this varies when contracts are, for example, presented online, over the phone, or during a face-to-face sales pitch.

The OFT will also look at how firms approach consumer contracts, and any practices which deliberately or unintentionally disadvantage consumers. The results should be of benefit to firms who are trying to make important terms and conditions clear to consumers buying their products and services.

Heather Clayton, Senior Director of OFT's Consumer Market Group said:

'Today consumers are offered a range of complex contractual arrangements, particularly for goods and services offered online. We often see situations in many different markets where people lose out as a result of not understanding contracts. We want to understand the cause of these problems and look for remedies that will not only protect consumers, but also help those businesses that are trying to provide clarity to their customers.'

The OFT would welcome views and evidence on when and how contracts cause problems for consumers or firms. It will be contacting key parties directly, including Government departments and consumer bodies. Others who wish to make a submission should visit http://www.oft.gov.uk/advice_and_resources/resource_base/market-studies/current/consumer-contracts or email consumercontracts@oft.gsi.gov.uk.

The study is expected to be completed in Winter 2010.

NOTES

1. For more information about the market study go to www.oft.gov.uk/consumer-contracts.

2. Market studies are conducted under the OFT's general function under section 5 of the Enterprise Act 2002, which includes the functions of obtaining information and conducting research.

3. Market studies involve an analysis of a particular market with the aim of identifying and addressing any aspects of market failure from competition issues to consumer detriment and the effect of government regulations. Possible results of market studies include: enforcement action by the OFT, a reference of the market to the Competition Commission, recommendations for changes in laws and regulations, recommendations to regulators, self-regulatory bodies and others to consider changes to their rules, encouraging firms to take voluntary action, campaigns to promote consumer education and awareness, 'a clean bill of health' for the industry.

4. The OFT is unable to provide advice or resolve individual complaints for consumers. Consumers can seek advice from Consumer Direct (tel: 08454 04 05 06, www.consumerdirect.gov.uk).

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