Consumer Focus, the body set up by the last government to represent consumers and challenge companies, will be scrapped, the BBC has learned. Other consumer bodies facing abolition include the Office of Fair Trading and Consumer Direct. Their activities will be taken over by Citizens Advice and Trading Standards offices. The government refused to confirm or deny the changes ahead of an imminent announcement on public bodies.
Speaking on Radio 4's Money Box programme, Consumer Focus chief executive Mike O'Connor, who warned his staff on Wednesday that their future was in doubt, would not confirm the move publicly. "Government has to take this decision and we wait to see what they have got to say." But he defended the value for money of his organisation. "We cost the taxpayer in our core grant about £6m a year. Just last week we won a return to consumers of over £70m from the energy companies. And three months ago through our super complaint we changed the ISA rules so savers will get an extra £15m a year." NPower has recently refunded £70m to 1.8 million customers who it had overcharged for gas in 2007. Banks will pay interest eight days earlier on ISAs that have been moved.
However, pressure group the Taxpayers' Alliance, which wrote to Business Secretary Vince Cable on 8 October calling for Consumer Focus to be abolished, says it duplicates work done by private organisations such as the Consumers' Association. Speaking on the programme its director Matthew Sinclair said Consumer Focus was also too close to government to be fully effective. "It does fulfil a function which is replicated in the private sector. It's not representing consumers because it can't speak against government," he said.
Mike O'Connor said that no other organisation had its powers or could be so effective. "The Consumers' Association does not have the powers which we do. We have a vital power, we can make companies and regulators and government give us information so you may be asking people to do things but without the powers that we have."
The BBC has also learned that Citizens Advice is being lined up to take over the activities of Consumer Direct, which offers free help over the phone to consumers who are victims of scams or want advice on their rights. The Office of Fair Trading, which took the long running but ultimately unsuccessful case over the banks' overdraft charges, will be merged with the Competition Commission. The government has discussed passing the OFT's consumer activities - including court action - to trading standards departments in local authorities.
Mick McAteer, founder and director of the Financial Inclusion Centre, told Money Box: "If you take away one of the main bodies whose tasks is to represent consumers I think you will undermine consumer protection." A Cabinet Office spokeswoman said the report on the future of hundreds of public bodies "is likely to happen in the next couple of weeks". She would not comment on the claims that these consumer bodies would be scrapped or merged.
