Office of Fair Trading

Based on expanded powers granted under the Enterprise Act 2002, the OFT explored how different market sectors operate, in order to help markets work well. It sometimes researched one particular market in detail or, for example, how codes of practice or professional rules operated across different markets in a range of businesses.

The results of the research, which were published, helped the OFT to assess what action, if any, needed to be taken to protect consumers' interests. They could recommend stronger enforcement, or a change in the regulations, or suggest an awareness raising campaign for consumers (but will not always recommend intervention and when this is the case, will ensure that any non intervention decision is well informed and open to public scrutiny).

In 2006, the OFT restructured in response to Treasury proposals for splitting the department into separate consumer and competition regulators. The OFT argued that to protect consumers effectively, it had to be able to use both consumer law and competition law approaches in a holistic fashion. Moving away from division by legislative area, the OFT created divisions based on market sector.

These officials are supported by a dedicated economics branch also including statisticians and financial analysts (the Office of the Chief Economist), a legal specialist, and a policy advisory branch.

In May 2006, the OFT investigated the charges being imposed on customers of credit card companies. In its report, the OFT confirmed these charges were unlawful as they amounted to a penalty, rather than the actual losses suffered by the companies. It said it would be prepared to investigate any charge over £12 (£16 for Egg credit card accounts)[5] indicating that £12 would not be a "fair and acceptable charge" itself.

The OFT said it would be up to a court to determine such an amount based on the established legal precedent that the only recoverable cost would be actual costs incurred, i.e., liquidated damages.

The credit card companies did not produce evidence of their actual costs to the OFT, instead insisting their charges are in line with clear policy and information provided to customers. Charges have been as much as £38 per item, which campaigners argue is well beyond the cost of sending a computerised letter.

In 2009, after customers complained to OFT about deceptive practices by two websites operated by a man in the state of California that misrepresented themselves as being British, it coordinated actions with the U.S. Federal Trade Commission, which began an enforcement action. Two years later a consent decree required the companies to end those practices and represent their location honestly.[6]

In September 2010, the OFT sent warnings to 129 firms after its review of debt management companies found widespread problems, with firms putting profits ahead of customer care. Since it issued that warning, 87 firms have surrendered their licenses.

In March 2010, Consumer Focus submitted a super complaint to the OFT raising concerns that transferring cash ISAs were taking too long and there were arbitrary rules preventing transfers into some of the most attractive accounts and that interest rates were not sufficiently transparent.

The OFT responded in June 2011, with a number of recommendations to ensure that transfers of cash ISAs work better and that there is greater transparency of interest rates. This included the following agreements from cash ISA provider to:

• Comply with new industry guidelines to complete end to end transfers within 15 working days
• Provide personalised interest rate information on cash ISA statements delivered in electronic and/or paper form

In April 2011, the OFT fined Reckitt Benckiser £10.2 million after it found that it had abused its dominant position in the market for the National Health Service (NHS) supply of alginate and antacid heartburn medicines. The OFT found that Reckitt Benckiser abused its dominant position by withdrawing and de-listing Gaviscon Original Liquid from the NHS prescription channel in 2005.

In March 2012, the OFT accepted undertakings from "daily deals" company MyCityDeal, which trades as Groupon, to change some of its trading practices following an OFT investigation. The investigation found widespread examples of Groupon's practices that breached consumer protection regulations.

The OFT had specific concerns over practices involving reference pricing, advertising, refunds, unfair terms, and the diligence of its interactions with merchants. Groupon engaged openly and constructively throughout the investigation and signed undertakings that it will change its practices to comply with the law.[7]

In September 2012, the OFT commenced an investigation into the hotel online booking sector.[8] The complainant, a small online travel agent, Skoosh, claimed that the hotels it bought room bookings from were under pressure from other resellers to maintain minimum prices.[9] On 31 July 2012, the OFT issued a Statement of Objections against Booking.com, Expedia, and Intercontinental Hotels.[10]

In the OFT's provisional view the parties had infringed competition law. In January 2014, the OFT accepted commitments proposal from the defendant parties in lieu of any fines. The OFT's Rasmussen acknowledged there was a chance the set up could lead to further monopoly, but he said the OFT would be monitoring movements in the market.[11]

In March 2014, the price comparison site, Skyscanner, challenged the OFT's decision with the United Kingdom's Competition Appeal Tribunal.[12]