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New Motor Code For Warranties

Mon, 01 Jun 2009
The Motor Codes Ltd Code of Practice for vehicle warranty products has completed Stage One of the OFT Consumer Codes Approval Scheme.

Subscribers to the code administer around two million warranties for cars and motor vehicle products every year. By signing up to this code, they have agreed to raise their standard of customer service above that required by law.

Motor Codes Ltd was established to look after motor industry codes of practice, including ones that had originally been developed and administered by the Society of Motor Manufacturers and Traders Limited (SMMT). Having completed stage one of the OFT’s code scheme, Motor Codes will now carry out comprehensive monitoring including visits to garages and customer satisfaction surveys, to ensure that the Code is working effectively. Only codes that demonstrate this can achieve Stage Two approval, and be entitled to display the OFT Approved Code logo.

The vehicle warranty code requires that members:
•give clear pre-contractual information to consumers so that they can make an informed decision on the suitability of a warranty,
•give clear information to consumers on what is covered under the warranty,
•provide a cancellation period of at least 14 days,
•give consumers access to an independent arbitration scheme for products that do not fall within the remit of the Financial Ombudsman Service, and
•agree to be subject to independent disciplinary procedures for failing to comply with the Code.
Mike Haley, OFT Director of Consumer Protection, said:
‘This is one of a number of codes entered into the OFT Approved Scheme by Motor Codes Ltd, and I congratulate them for working hard to drive up standards within the motor industry.’
'By achieving stage one of the two-stage process Motor Codes Ltd has shown that the code meets our strict criteria. They now have to prove it is working in practice. Consumers who purchase from code members can anticipate they are going to receive a much higher level of consumer protection than is required by law.’

1. The OFT's Consumer Codes Approval Scheme aims to promote and safeguard consumer interests by helping consumers to identify better businesses, and to encourage those businesses to raise their standards of customer service.
2. The scheme consists of two stages. During Stage One the code must meet the OFT's published core criteria, which contain measures designed to remove or ease consumer concerns about undesirable trading practices. At Stage Two the code sponsor must prove that its code lives up to the promises made in Stage One by demonstrating that the code is being effectively implemented by its members and that consumer disputes are properly resolved.

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