New consumer protection from October 1st

New consumer protection rules come into force today, consumer affairs minister Gareth Thomas writing for myfinances.co.uk takes us through the changes to buying a home, energy companies and debt.

We’re focusing on a better deal for consumers this autumn, Mr Thomas explains. Big changes to consumer protections from October 1st will see a new organisation campaigning for consumer rights, new laws to help people keep their debts under control and new rules to make sure we’re protected when someone tries to sell us something at home.

The first, and possibly most exciting, change is the launch of Consumer Focus. This powerful consumer champion will replace the National Consumer Council, energywatch and Postwatch.

UK-wide and with a direct link to government, Consumer Focus is in an ideal position to make a difference. As one organisation, rather than three, it means a stronger voice fighting for consumers.

Working across public and private sectors, it will be able to investigate the major issues affecting consumers.

Consumer Focus will also have a remit to help customers in the energy and postal markets. Consumer Direct is still your contact point for any consumer advice, but Consumer Focus will provide specialist help for vulnerable consumers who have problems with their energy supplier.

Making companies responsible for complaints is vital – new complaint handling standards and redress schemes in the energy and postal sectors will make sure this happens.

The redress schemes will be free to use after consumers have tried to resolve their complaints with the relevant company. The scheme's guarantee complaint resolution and can award compensation of up to £5,000 for gas and electricity disputes. Companies will be bound by the decision, but consumers dissatisfied with the result will still be able to take their case to court.

Another change to current laws means consumers should always know where they stand on their debts.

From the start of October, the Consumer Credit Act will mean businesses offering credit agreements have to send customers regular statements, clearly showing the balance, interest payments and any default charges. Borrowers will also be told the implications of only making minimum payments.

Changes to the law from last April also mean that lenders have to be responsible when they offer loans or goods on finance, making sure borrowers are aware of how much they will be paying back and over what length of time. Stories of aggressive debt collection practices, or consumers only realising how indebted they are when the bailiff comes knocking, should be a thing of the past.

But if things do go wrong or consumers think their lender is being unfair, there is more help available. If you’re still not happy after taking the matter up with your lender, the independent Financial Ombudsman Service could help. You may also be able to go to the courts to challenge unfair agreements or ask for more time to pay back your loan.

Free independent debt advisers can help you if you have any concerns about your debts.

And finally, October sees more help for people buying or selling a home with access to independent redress if they have a complaint about an estate agent. Meanwhile, people buying products at home will be better protected with new cooling off rights.

These changes build on the UK’s already strong consumer protections. Providing simpler, clearer consumer law will not only protect consumers but will also benefit honest companies by driving out rogue traders, building a more competitive market place and boosting the reputation of lenders, estate agents and other businesses.

Consumers deserve a fair deal and honest, well-run businesses should not be beaten by competitors who flout the law.

For more information visit: www.oft.gov.uk and www.berr.gov.uk