Consumers, Estate Agents and Redress Bill [HL]

My Lords, I am grateful to the noble Baroness for that. She made a point earlier about there being no Minister for consumer affairs. There is currently such a Minister; it is my right honourable friend Ian McCartney, Minister of State at the DTI with responsibility for consumer affairs. The point she has raised in her intervention is a valid one, and something we ought to look at in Committee. On redress schemes generally, the ones that are established are there to resolve complaints whereservice providers have not been able to do so and award compensation and redress to consumers where appropriate. Consumers with a complaint should initially approach the service provider in the first instance. If needed, consumers would then be able to use the Consumer Direct service as a source of impartial advice and assistance to help. In the event that a supplier could not provide a satisfactory response to their complaint, the consumer would be signposted to the relevant redress scheme to investigate the complaint on their behalf. The point was made by the noble Lord, Lord Razzall, about having one ombudsman scheme. The fact is that under the Bill we are leaving it to industry to come forward and seek approval of suitable redress schemes, in the plural, so the situation could be that several schemes are approved. It is also the case that the approved schemes will have to conform to minimum standards. Such standards will pay due regard to best-practice principles for redress schemes. Doorstep lending has been raised by a number of noble Lords, including my noble friend Lord Borrie and the noble Baroness, Lady Oppenheim-Barnes. Currently, it is a criminal offence for lenders to agree a credit agreement in an unsolicited visit to a consumer’s home. Consumers already have a cooling-off period for credit agreements agreed in their home. We will consider the regulations on doorstep lending in the Bill on doorstep lending when we draft the new regulations. Consumer credit legislation already requires lenders to give borrowers details of their cancellation rights, and the proposed consumer credit directive, if agreed in its present form, will extend those rights. It would not make sense to change the present provisions until the outcome of negotiations on the directive is clear. The Consumer Credit Act 2006, which we are in the process of implementing, already has a number of requirements on post-contract transparency in the form of statements and notices that need to be sent to consumers. My noble friend Lord Borrie and the noble Lord, Lord De Mauley, among others, referred to doorstep lending. From a consumer’s perspective, the changes we are making to doorstep selling and the current consumer credit legislation will mean that consumers will be clear on their rights. The consumer credit legislation already requires lenders to give borrowers details of their cancellation rights. The noble Baroness, Lady Oppenheim-Barnes, mentioned consumer education. The NCC is responsible for consumer education and will continue to be. The OFT has a role to support Consumer Direct in consumer education. Consumer Direct was rolled out nationally earlier this year—a year ahead of schedule—and provides advice on all consumer issues. We are exploring with the OFT whether to run an awareness campaign on the implementation of the new doorstep selling regulations expected to come in in April 2008. In response to a question raised by the noble Baroness, Lady Oppenheim-Barnes, the Office of Fair Trading has a function under the Enterprise Act 2002 of publishing educational material or carrying out other educational activities for consumers. The Bill provides for the new National Consumer Council the function of facilitating consumer education which complements the role of the Office of Fair Trading. My noble friends Lord O’Neill, Lord Borrie and Lord Whitty and the noble Baroness, Lady Oppenheim-Barnes, among others, spoke about Farepak. One cannot observe the Farepak saga without having a great deal of sympathy for those who, as a result of the company’s collapse, have lost money that they have saved and understandably feel badly let down. The circumstances of the collapse will be properly investigated by the DTI’s Companies Investigation Branch. The administrators will in due course report to the Secretary of State on the fitness or otherwise of the directors of Farepak. The question was raised about whether the Bill should include some provisions to covers such cases. The Government are working very closely with the administrators, the Family Fund people and all those who are dealing with this difficult situation. My right honourable friend the Minister of State for Trade, Investment and Foreign Affairs met the chief executive of the Office of Fair Trading on 8 November; he asked that the OFT work with the Financial Services Authority and DTI officials to look at the regulatory framework in which Farepak operated and consider options to address any issues raised. A report will be made to him at the earliest opportunity and we will then be able to take a view on what action is required. However, I can assure noble Lords that we will take the necessary steps as expeditiously as possible to learn the lessons from the Farepak saga and to ensure, if at all possible, that there is no recurrence of this disturbing situation. The noble Baroness, Lady Oppenheim-Barnes, spoke about the full range of the new consumer body’s remit not extending to Northern Ireland. The General Consumer Council for Northern Ireland already covers all sectors, including utilities, other than postal services. That is why the remit of the new National Consumer Council extends to Northern Ireland only in respect of postal services. The noble Earl, Lord Caithness, the noble Baroness, Lady Hanham, and the noble Lord, Lord Razzall, spoke about the regulation of estate agents and whether they should be qualified. Estate agents are currently regulated by the Estate Agents Act 1979, which lays down the duties agents owe to clients and to third parties. It gives the OFT the power ultimately to prohibit those persons it considers unfit to carryon estate agents’ work. In addition, the Enterprise Act 2002 and local authority trading standards services can require an estate agent to change aspects of his conduct when the agent breaches specified consumer protection measures. Estate agents are also covered by the Property Misdescriptions Act 1991. However, following on from the studies and consultations that have taken place, we do not believe that licensing would in practice improve consumer protection as the evidence suggests that most estate agents who were subsequently banned had no criminal history and consequently would have been able to obtain a licence. Misconduct has appeared to be the result ofa lack of integrity by individuals rather than a consequence of a lack of qualifications or knowledge of the law. That is the Government’s position. I was asked about Consumer Direct. The new NCC will continue to carry out the sectoral functions currently undertaken by sectoral consumer bodies including Post Office monitoring and help for customers facing disconnection from energy supplies. I have dealt with questions on the budget. A number of noble Lords spoke about vulnerable consumers. The Bill allows for the new NCC to determine for itself how to assess and categorise vulnerable people for these purposes. The Bill also enables the new NCC to act on behalf of consumers who become vulnerable through disconnection of their gas or electricity supply. I was asked why the Ofcom Consumer Panel and the Financial Services Consumer Panel were not consulted. We consulted on their inclusion in January to April of this year. The majority of responses agreed that the panels had a different role to that of other statutory consumer bodies such as Energywatch and Postwatch and that both roles were important and were maintained by the proposals. There will be a consumer advice line for people to ring—it will be an 0800 number, a point raised by my noble friend Lord O’Neill. Arrangements will be simpler—a point made by the noble Lord, Lord Razzall—and consumers should be able to contact Consumer Direct directly for complaints rather than first finding out the correct body to contact. The three-month period refers to the time allowed for companies to resolve complaints. The new council has a duty to act on behalf of vulnerable consumers without having to wait. The noble Baroness, Lady Byford, spoke about post offices. People can still get their money from post offices and will continue to have the option to do so. The Post Office card account contract ends in 2010. A number of noble Lords asked why all the consumer bodies were not being merged into one consumer advocacy body. I have already mentioned the Financial Services Consumer Panel and the Ofcom Consumer Panel. There are special reasons why water and transport were not included. With respect to water, the consumer representation has only recently been reformed. Similarly, with respect to transport, the Air Transport Users Council is a division of the sectoral regulator, the Civil Aviation Authority, so it was not thought appropriate to incorporate that at this stage. There are four reasons for not including lettings. The Bill amends the Estate Agents Act 1979, hence its provisions do not apply to letting agents. Tenancy deposit schemes, however, are to be introduced in April 2007 under the Housing Act 2004. The Government support voluntary self-regulation of letting agents. Agents who are members of the Association of Residential Letting Agents, the Royal Institution of Chartered Surveyors and other groups have provided financial support to the national approved letting scheme. However, we will continue to monitor the operation of the lettings market. Approved redress schemes dealing with complaints about letting agents on a voluntary basis can already operate, but that would be a matter for the scheme administrators. The OAEA has recently started dealing with complaints about letting.