The Office of Fair Trading
The Office of Fair Trading (OFT) is a department of the government which is used to protect the general public from certain business activities and economic problems.
Principally, the office ensures that businesses operate on a fair basis and that the consumers and/or the general public are not being misled.
Unfair business practices
Common business practices that the OFT seeks to clamp down on include the following:
A cartel involves a number of businesses that collude together to set the market conditions to how they would like them. Essentially, cartels ensure that businesses’ profits are maximised for those companies involved and the consumer loses out because there is less competition in the market. A good example of cartel activity is price fixing. If companies act as a cartel to fix prices it will be for their benefit because they know that the other business will not undercut them and sell more goods (which would occur under normal business conditions). Instead, all businesses will benefit from the higher price and consumers will have to pay more money.
There can be a number of different varieties of scams aimed at the general public which, naturally, the OFT will attempt to clamp down on. A common example is when a company targets vulnerable individuals both over the phone or the internet and misleads them about what they are actually buying.
- Mergers between companies that are not in the public interest
If two companies merging in a particular industry were to leave a significant lack of competition in that area, and possibly even provide the new merged company with a monopoly, then the OFT may well step in and block the merger. In situations such as this the matter will often be referred to the Monopolies and Mergers Commission, which will analyse the fairness of the merger and look upon the likely effect it will have on consumers.
The essential purpose of the OFT is, therefore, to protect the consumer. Whilst we live in a capitalist system where the market is used to dictate business activities and their profitability, nobody is claiming this is a perfect system. The OFT, therefore, is used as a way of protecting the consumer should these practices become unfair to the public and against the spirit of competition.
If you feel you have been misled by a particular business perhaps in terms of the way the product was advertised or the way in which it was sold to you, you should contact the OFT.
Another possible route to holding a particular business to account will be through a solicitor, who may well represent you if you have been misled by a company and suffered loss as a result. A solicitor will also be able to advise on the most appropriate action and recourse as a result of the company’s actions.