Consumers, Estate Agents and Redress Bill [HL]

My Lords, the amendment requires that the existence of a functioning and effective internal complaints-handing procedure in the case of each supplier and prospective member be made a prerequisite of the approval of these schemes. The current provisions take fully into account the importance of service providers establishing effective internal procedures for handling consumer complaints. The redress provisions are based on the premise that, except in exceptional circumstances in which immediate intervention is warranted, service providers will have the opportunity to resolve disputes first hand. Although we understand the motivation behind the amendment, we feel that the approach we have chosen is in line with better regulation principles, a point to which I shall return. We are giving regulators the power to make regulations to prescribe complaint-handling standards that would be binding on suppliers. Information about suppliers’ levels of compliance with any prescribed standards would be placed in the public domain. This is a fundamental aspect of the new model for consumer redress being introduced by these measures. We consider that, between this requirement and the requirement to belong to a redress scheme which industry must fund, suppliers will face strong incentives to introduce effective internal procedures for handling complaints. This amendment would place an additionalburden on regulators and scheme administrators in determining whether suppliers operated appropriate and effective schemes, although I take on board the points made by noble Lords. These provisions will need to adaptable and applied on a sector-by-sector basis, with each regulator being able to take a different approach to suit the sector’s own particular requirements. In some instances, these provisions will need to work alongside existing legislation, and this will be different for each sector. I shall look at this issue again, but we believe that it is possible to achieve the desired outcomes mentioned by the noble Baroness, Lady Wilcox, through the monitoring of performance, especially in the sphere of complaint-handling standards.