DEPARTMENT FOR
BUSINESS, ENTERPRISE AND REGULATORY REFORM News Release (Reference
2007/007) issued by The Government News Network on 5 July 2007
Consumers are set
to benefit from powerful redress schemes, which guarantee them
complaint resolution and can award compensation. Proposals on the
schemes are being consulted on by the Department for Business,
Enterprise and Regulatory Reform (BERR).
The new arrangements would initially cover the energy and postal
services sectors. Currently, consumer bodies in these sectors can
only seek to resolve the thousands of complaints they receive
through persuasion. They have no powers to enforce resolution and
cannot specify redress or compensation.
BERR Minister Stephen Timms said:
"For the first time, consumers will have guaranteed access
to redress schemes which have the teeth to enforce their awards.
Our proposals will give people certainty that their complaints
will be resolved and that they will receive compensation when it
is warranted."
The Government also intends to place a duty on Ofgem, the gas and
electricity regulator, and Postcomm, the postal services
regulator, to prescribe new complaint handling standards for their
sectors. Suppliers will have to work hard to resolve complaints
themselves in the first instance, with the redress schemes
available if agreement cannot be reached.
These proposals are within the Consumers, Estate Agents and
Redress Bill, which is receiving its final reading in the House of
Commons today. The Bill contains a range of important provisions
that will give greater protection to UK consumers.
Mr Timms said:
"The Bill contains a package of measures that will benefit
consumers and give them a stronger voice. Estate agents will have
to belong to an ombudsman scheme, and the Office of Fair Trading
(OFT) will get new powers to detect and ban rogue estate agents. A
new more powerful National Consumer Council will be set up, and
consumers will get new rights in relation to doorstep selling."
The Government's consultation proposes the following scope
for the redress schemes, and invites views on whether:
* All regulated providers in the gas, electricity and postal
services sectors should be required to become members of a redress scheme
* Domestic consumers and the smallest businesses should have
access to the redress schemes and
* The scheme should handle all types of complaint
Notes to Editors
1. The consultation can be found at http://www.gnn.gov.uk/environment/dti/
and will close on 27 September 2007.
2. The position of consumer representation and redress in the
water sector will be the subject of a separate consultation in 2008.
3. Redress schemes provide consumers with resolution of their
complaints against suppliers of goods and services, where the
suppliers have failed to resolve the complaints to the
consumer's satisfaction. They are independent of consumers
and of suppliers. Redress schemes can reach an impartial
judgement on complaints that are referred to them, and can reach a
decision which is binding on the supplier.
4. Where a decision made by a redress scheme is in the
consumer's favour, the decision may specify that the supplier
should provide an apology or explanation; pay compensation; or
take such other action in the interests of the consumer as may be specified.
5. This approach represents a departure for some sectors, where -
for over twenty years - there have been public bodies charged with
handling complaints which the regulated providers have not
addressed to the satisfaction of their customers. The new
arrangements give regulated providers an incentive to invest in
resolving complaints through their internal procedures rather than
having to take matters to redress schemes for resolution
6. Government will set out its response to the consultation by 21
December 2007. The relevant regulated service providers will then
be able to complete the preparations for their schemes. The
Secretary of State will need to make an Order before the schemes
can formally commence.
7. It is envisaged that the redress schemes in the energy and
postal services sectors will be in place by summer 2008.
Further information on the Consumers, Estate Agents and Redress
Bill is available at http://www.berr.gov.uk/consumers/consumersbill/index.html
Department for Business, Enterprise & Regulatory
Reform
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http://www.dti.gov.uk