Labour to oppose end of OFTs agency regulation role

Shadow consumer rights minister Stella Creasy says Labour is to oppose the abolition of the Office of Fair Trading’s role as a watchdog over estate agents.

 From 1 April the OFT will be abolished and its estate agency law enforcement functions transferred to other bodies including HMRC and some local authorities.

Labour opposes the move because it claims the government is refusing to abide by European law on precisely how it will settle disputes involving, amongst others, estate agents.

“Without this protection the moves to transfer the OFT’s powers and lack of clarity about the role of Ombudsmen could leave an enforcement gap In which sharp practice by estate agents and letting agents could flourish” says Creasy.

This week Creasy, the MP for Walthamstow, claimed that a new form of contract was being used by estate agents in parts of London and south east England.

She says ‘sale by informal tender’ contracts are being initiated by estate agents who encourage competitive bids with the successful bidder being charged an ‘introductory’ fee – in some cases as much as 2.5 per cent of the sale price plus VAT. This may be on top of a more traditional charge levied on the seller.

There is nothing illegal in this but Creasy says “without quick action it could spread across the country."

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