Page 5: Other legislation
Consumer Credit Act 1974
Many consumers make purchases on credit. This helps them to budget and spread the payments over a period of time. All of the larger and more expensive products sold by DSGi are available on credit.
There is a general concern about the level of consumer debt in the UK. There is recognition that credit is a complex area, which some customers have difficulty in understanding. The Consumer Credit Act requires all credit agreements to be in writing and the customer must be given an accurate copy of the agreement.
The Advertising Regulations made in 2004 also ensure that customers are given full and accurate details of the credit on offer. In particular, they must be made aware of the interest rate. The Annual Percentage Rate (APR) shown in advertisements is an interest rate which is calculated in the same way for all types of credit.
Comparison of APRs enables the customer to compare the cost of credit from different suppliers. In order to offer credit the company must be licensed by the Office of Fair Trading. The licence is subject to regular review. It can be taken away at any time if the company is considered to be unfit to hold the licence. The Consumer Credit Act also creates criminal offences for certain breaches of the act, in particular misleading advertising.
Video Recordings Act
The Video Recordings Act makes it an offence to supply an age restricted product such as a video, DVD or computer game to a person under the relevant age. It is enforced by Trading Standards officers who often use an underage person to make a 'test purchase' in a store. DSGi's training ensures that all staff are aware of the law and a prompt on-the-till system appears whenever an age restricted title is about to be sold. This requires the salesperson to ask the customer their age if they appear to be below the legal minimum age.
Extended Warranty Pricing
New legislation came out in 2005 which requires a company to show the price of any extended warranty it offers with its goods. This applies to prices in advertisements, on the Internet, and in-store. It also requires the trader to provide the customer with full information about the terms of the extended warranty and other options which may be available.
DSGi have long recognised that there have been concerns in the market about the value of some extended warranties. It has developed its own products which offer a full and comprehensive after sales support service going far beyond a simple product repair service.
The Competition Commission
The Competition Commission is an independent public body set up under the Competition Act 1998. It replaced the former Monopolies and Mergers Commission. It is empowered to conduct enquiries into company mergers and takeovers and into particular markets.
The Competition Commission's work is aimed at ensuring that markets work well for consumers. It is important that there is fair and unrestricted competition within the market, otherwise a large company which has a very large market share can operate unfairly and may try to fix prices or drive competition out of the market. There are very severe penalties for any company found operating in this way.
It is also important that acquisitions and mergers are monitored to prevent companies becoming so big or powerful that they are able to eliminate competition and act in ways which are detrimental to customers wishes.