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Trading Standards investigation

The motor servicing sector has been given a deadline of March 31 next year to agree a UK-wide procedure for customer protection.

Failure to do so might result in the Government stepping in with regulation, funded by a levy on garages, or mandatory technician licensing.

The industry came under fire in March from the National Consumer Council, a lobby organization funded by the Department of Trade and Industry, which threatened to make a “super-complaint” to the Office of Fair Trading (OFT) about poor servicing standards.

Last week, the NCC presented a report to the DTI, documenting issues facing the motor service and repair sector, and the resultant cost to its customers. It warns that unless the sector gets its house in order within the next nine months and produces a protection for motorists, it will urge the DTI to legislate.

The threat has been backed by the Trading Standards Institute (TSI). It recently conducted a mystery shopping exercise in which 76% of garages failed to service cars correctly. Many were members of the Retail Motor Industry Federation and Scottish Motor Traders Association.

According to OFT data, each year there are at least 1.2m unresolved consumer complaints in the sector, costing £170m. Servicing and repairs are the 13th most complained-about issue.

“We want the industry to meet OFT codes to avoid the pressure for bureaucratic legislation,” says Alun Michael MP, Minister of State for Industry and the Regions. “The Trading Standards figures identify a problem exists. We need robust codes and it’s in the industry’s interest to develop them.

If this doesn’t happen there will be pressure from the Government and the media for legislation.” The NCC and TSI have both welcomed last month’s launch of Automotive Technician Accreditation by the Institute of the Motor Industry as a step towards raising standards. But they will continue to lobby for better consumer protection in the sector, and have criticized the collapse of the RMI CarWise consumer code last September after it failed to meet the OFT’s Consumer Codes Approval scheme (CCAS).

Matthew Carrington, RMI chief executive, is in fresh negotiations with the OFT to sponsor a new, less complex code. Consultation with RMI members has already begun, but Carrington is hesitant to give a time frame for launch.

“We need something we can get in place quickly to gain consumer confidence. The key element to its success is that the motorist knows which garages to trust and which not to. We need a simple, effective scheme which is readily identifiable by the motorist,” he says.

Carrington is consulting with the TSI to identify and coach RMI members which performed poorly in its recent mystery exercise. “For even one RMI garage to miss basic points of service is wholly unacceptable,” he adds.

The SMTA is working with Scottish Trading Standards to implement its own code later this year. However, Douglas Robertson, chief executive, says he is unlikely to seek OFT approval.

“Before we could give full consideration to this we would require evidence that the OFT understands the complexities of our industry and that the CCAS is going to work,” he says.

“As far as we are aware, there is no large queue of code sponsors awaiting approval and we see little point in re-applying to join what appears to be a poorly functioning scheme.” Philip Cullum, NCC deputy chief executive, says the cooperation of motor trade organizations is vital.

“But we’ve been here before, with 11 attempts to raise standards in the last 30 years. This is why we want a challenging but realistic deadline for agreement on a properly policed self-regulatory code,” he says. “If this attempt fails, self-regulation will be dead in the water.

The National Consumer Council’s wish list:

  • The motor industry has nine months to establish an OFT-backed code of practice
  • If the deadline is missed, the DTI should step in to legislate
  • The DTI should provide Trading Standards with more resources for enforcement in this sector
  • The DTI should supervise, or even legislate for, a unified independent complaints process for motor servicing and repairs
  • The automotive sector is included in a pilot trader information service proposed in the DTI’s draft consumer strategy, whereby consumers will have access to records of unscrupulous trading
  • The OFT should make service and repair a priority sector for its consumer education work
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