'Timid Office of Fair Trading puts public at risk'

Britain's statutory consumer watchdog has put public safety at risk by failing to crack down on rogue car salesmen, builders and holiday firms, a scathing report by MPs says today.

Britain's statutory consumer watchdog has put public safety at risk by failing to crack down on rogue car salesmen, builders and holiday firms, a scathing report by MPs says today.

The Public Accounts Select Committee found that a combination of timidity and inefficiency within the Office of Fair Trading has left shoppers vulnerable to a range of "rip-off" traders.

Some car dealers are being allowed to sell unroadworthy vehicles, "thereby endangering lives", the committee found.

The OFT, which has 180 staff and a £7m budget for consumer protection, is supposed to prevent unscrupulous businessmen from preying on the public. However, the committee has found that the watchdog failed to use the Fair Trading Act to stop those who persistently flout the consumer's rights.

Consumer credit licences, without which most firms could not operate, are rarely revoked, even when there is evidence of criminal convictions against the traders involved, the MPs found. The OFT revoked the licences of just 18 firms in the year 1998-99. Only 15 of 21,200 applications for new licences and one out of 10,000 renewal applications were rejected.

Worse still, the committee found that most local trading standards offices had no confidence that the OFT would act quickly and, consequently, were referring fewer cases. In one case, it took 16 years to remove a trader's licence.

The committee called on the watchdog to improve the way it checked applications and to obtain information on convictions much more rapidly than at present. "The OFT's inability to apply the law promptly and effectively means, for example, that some motor dealers may continue to sell unroadworthy vehicles to the public, thereby endangering lives," the report states.

"Revoking a licence is a serious and effective sanction because in many industries it can put a trader out of business.

"But during the three years to 1998-99, when harm to consumers has been as great as ever, the number of licences the OFT revoked fell by two-thirds and trading standards referred 30 per cent fewer cases." The committee found that the OFT had no idea what proportion of its applicants had previous convictions and admitted it could take "a very long time" to get the information. On average, it takes at least a year to act against traders.

Used car dealers in particular were a high-risk group for the public, with a range of illegal practices mentioned including alterations to the mileage clocks of cars and false guarantees about MoTs.

David Davis, the MP for Haltemprice and Howden, and the committee's chairman, said the OFT should overhaul its procedures. "Looking back on consumer protection in recent years, it would be easy to conclude that the OFT have treated traders rather leniently. Consumer credit licences are hardly ever refused or revoked. The OFT have consistently failed to take opportunities to show traders that they will not tolerate rip-offs," he said.

The MPs said the agency did not demand sufficient information to verify its applicants' identities, calling for passport and national insurance numbers to be supplied.