Beware of the conmen

The Office of Fair Trading has launched a campaign to highlight the problem of financial confidence tricks. But is enough being done? OFT chairman

What is the OFT doing about the scams running rife in Britain, many from abroad?

We are having a crackdown on scams run by very professional operators and which are hitting people by post, phone and the internet from all over the world. The message to consumers in our awareness campaign is to ignore offers that promise you something for nothing.

Be aware of telephone cons where you are notified by post of a win in a sweepstake which includes instructions to ring a premium rate 090 number to claim the prize. Watch out for rip-ffs such as the Nigerian advance fee fraud where someone abroad offers you a proportion of an enormous sum if you pay 'costs' in advance, and investment-related scams where you receive an unsolicited phone call offering the opportunity to invest in a 'soon-to-be-rare' commodity.

Never part with your money in order to get more money. If it seems too good to be true, it probably is. Don't accept a prize from a draw you haven't entered and don't respond to telephone lottery or other 'wins', where you pay an upfront admin fee before you receive your 'prize'.

We are working collaboratively with colleagues throughout the world, including Holland, Switzerland, Canada and Belgium, to clamp down on scammers and get the culprits into court.

What power do you have to work on behalf of consumers who buy faulty goods or services abroad?

Section 75 of the Consumer Credit Act says if you buy goods between the value of £100 and £30,000 on a credit card and they prove faulty or unsuitable, or the firm goes bust before they are delivered, the credit card company is equally liable for the goods. However, there is a dispute about whether this extends to purchases made abroad. It is not merely a matter of people shopping in the EU, because the internet has opened up the global market for credit-card purchase. We went to the High Court for a declaration on this matter and they found against us. We are awaiting our appeal to be heard.

Can the OFT do anything to stop credit services misleading the public with unfair offers such as time-limited 0% finance, where the purchaser buys on so-called 'free-credit', only to discover extraordinarily high interest rates are applied if they don't pay on time?

We monitor newspaper ads of credit offers in both the national and regional Press, as well as working closely with local trading standards offices. We have had a lot of that kind of advertising stopped. We have no problem when companies offer 0% finance and make it clear what the time span on it is.

There are Government regulations saying that information on the length of the deal must be prominently displayed. But it is important for consumers to do their own sums before they enter into any agreement. A 0% finance deal on an item worth £1,000 over six months means that, at the end of that time, the consumer should pay just £1,000. Consumers must look at the total cost, not just the percentage interest rate.

What plans are you making to regulate mortgages so that the consumer is able to make simple comparisons?

This is the remit of the Financial Services Authority rather than us. There are natural crossovers between our work and theirs. However, as in all things, we look to see if the market is competitive and if the customer is getting clear information. If the answer to both is yes, the consumer is in the driving seat. As in any other field of consumer protection, that is more effective than any regulatory body can hope to be.

The OFT says it exists to encourage active competition in the market place and says it will deter all forms of anti-competitive behaviour, including cartels and the use of market power. Isn't this interference in the commercial world?

We are stamping down hard on cartels, ie, when companies get together, typically secretly, to take money out of the consumer's pocket. When Argos and Littlewoods ran a fixed-price agreement together on a number of Hasbro toys, including Monopoly, they were fined in excess of £22m. They appealed but our case on the decision was upheld by the Competition Appeal Tribunal.

We undermine arrangements like that by our leniency programme, so that anyone coming to us with information about any form of price fixing can receive immunity from penalties themselves. This is all in the name of fair competition in the marketplace.

What is your relationship with the Competition Commission? Doesn't your work overlap?

We look at and clear the majority of company mergers. We look at around 200 mergers a year and clear 85% of them, where they pose no threat to competition. The remaining 15% are referred to the Competition Commission as the Monopolies and Mergers Commission was renamed. We are here to ensure that consumers and businesses benefit from fair competition.

The Competition Commission exists to do in-depth investigation into mergers. We refer major corporate deals which might impact negatively on the consumer. For example, we referred the bid by Lloyds Bank for the Abbey National to the Competition Commission because they were outright competitors.

Had that deal gone through, it would have lessened competition and choice in the banking sector. However, a bid by the Spanish bank, Santander, posed no such threat because it is a newcomer to the British marketplace.

Should the public still need Which? magazine or the BBC's Watchdog programme if you are doing your job properly?

Programmes such as Watchdog and publications such as Which? are a source of good consumer advice. It is not a matter of rivalry. We all have a role to play.

What are you doing to make consumers more aware of their rights? Why don't you run more advertising campaigns as other Government departments do?

Our responsibilities run wide so we have to be as effective as we can be within our £55m annual budget. In the run-up to Christmas, we did a major debt campaign and we have launched a scam awareness one this month. Although we run paid-for adverts, we find we can spread the message in more effective ways, by making use of not only national, but London and regional media right across the UK.

Last week, in Crawley, we had one in a series of roadshows that are running across the country, with a consumer stand offering shopping tips and leaflets. We are working hard to raise consumer awareness of rights.