Darling announces plans to clampdown on rogue Estate Agents

Rogue estate agents and traders are being targeted in proposals announced by Trade & Industry Secretary Alistair Darling today.

The Consumers, Estate Agents and Redress Bill would champion the rights of buyers and sellers and ensure that estate agents give consumers a fair ride, increasing consumer rights and representation.

The new measures would:
* make it compulsory for all estate agents to belong to an independent, approved ombudsman with powers to award compensation to buyers or sellers;

* ensure agents refusing to join the scheme would be banned from operating;

* require estate agents to keep written records of dealings with buyers and sellers for six years, to be inspected without notice; and,

* give greater powers to the OFT to remove rogue estate agents from the market.

Alistair Darling, Secretary of State for Trade and Industry, said:

"Buying a home is one of the most important decisions anyone can make. All people want is a straight deal. The vast majority of estate agents give that. We want to get rid of those that don't. They give their industry a bad name.

"These proposals put power back in the hands of the buyer and seller. A compulsory ombudsman scheme able to award compensation, an obligation to keep thorough written records and new powers for the OFT to strike off the rogues who don't join,will drive up standards.

"It is one of the most important decisions, it can be one of the most stressful. These proposals aim to take some of that stress away."

As well as estate agents the Bill would include measures on:

* doorstep selling - to give people the same seven-day cancellation and cooling-off rights for solicited visits, as they currently have for unsolicited visits - making it harder for rogue traders to take advantage of vulnerable consumers; and,

* Consumer Voice - to streamline and strengthen consumer representation by bringing together the National Consumer Council, Energywatch and Postwatch into one organisation and by providing a simplified information and advice service.

Commenting on these measures Mr Darling continued:

"The Bill aims to give consumers a stronger voice. Whether it is rogue estate agents or unscrupulous doorstep sellers who exploit the vulnerable we are determined to create a fair consumer and competition regime. It is good for business, good for the consumer."

General Info

1. Estate agents in the UK are currently regulated by the Estate Agents Act 1979. Estate agents do not have to obtain a licence before they can practice, but the Office of Fair Trading (OFT) can ban people it considers unfit from being estate agents;

2. The operation of the 1979 Act and the market for estate agency services, were the subject of an in depth analysis by the OFT in 2004. The OFT concluded that while the estate agency market works well in many respects there was significant consumer dissatisfaction with the services provided;

3. About 60% of estate agents currently belong to the current voluntary ombudsman scheme run by the Ombudsman for Estate Agents (OEA);

4. Proposed ombudsman schemes will need to be approved by the OFT. Following approval of at least one redress scheme, an Order will be laid requiring all estate agents to join an approved scheme before a certain time.

5. The redress provisions in the Housing Act 2004 (due to be implemented in June 2007) will only deal with complaints about Home Information Packs (HIPs), and only apply to England and Wales. The Government is committed to extending the scope of redress schemes so that they can deal with all relevant consumer complaints about estate agents, and consider complaints in Scotland and Northern Ireland.

6. The proposals to strengthen and streamline consumer advocacy were first raised in a joint DTI and Treasury report published for views in 2004. They were included as a Government objective in the Consumer Strategy published by DTI in June 2005 following a consultation in 2004/5. A further consultation on more detailed proposals was run between January and April 2006. The Government's response to this was published on 17 October.

7. In addition to the merger of consumer bodies to provide more coherent and cohesive consumer advocacy, new redress schemes are proposed for the energy and postal services sectors, to provide consumers with resolution of complaints - and compensation where appropriate - in cases where service providers have not been able to resolve an issue to the consumer's satisfaction.