Farepak’s collapse shows why legislation is urgently needed to protect pre-payments, says Paul Dobson
Section 8 of the Enterprise Act 2002 (EnA 2002) gives authority to the Office of Fair Trading (OFT) to make arrangements under which it can give its formal approval to codes of practice containing provisions for the protection of consumers. This section requires the OFT to specify criteria that it will apply in deciding whether to grant or withdraw such approval.
The OFT got off to a flying start and, while EnA 2002 was still only a Bill, consulted upon and then published the core criteria for its Consumer Codes Approval Scheme (CCAS). There must be hundreds of consumer codes operating in the UK economy. Yet, nearly five years after EnA 2002 was passed, there are still only six consumer codes that have achieved approval status, and one of those has since been withdrawn from the scheme by its sponsor.
Why are there so few? In large part, the answer is that for most sponsors and their member
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