Introduction
Citizens Advice is pleased to have this opportunity to respond to the forward work programme for the new NCC – Consumer Focus. We have worked with the old NCC, with energywatch and with PostWatch in the past. We look forward to working productively with the new Consumer Focus in the future.
The Citizens Advice Bureaux (CAB) Service has two equal aims:
- to provide the advice people need for the problems they face; and
- to improve the policies and practices that affect people’s lives.
In 2007/08 CAB in England and Wales dealt with 1,734,884 debt problems,130,764 enquiries on goods and services, 115,824 queries about financial products and services, 95,379 issues concerning utilities and telecommunications, and 38,963 travel/transport & holiday problems.
The CAB service provides free, independent and impartial information and advice from over 3,000 outlets, including GP surgeries, courts, community centres and, by phone, email, online and through kiosks. In a 2005 MORI survey 95% of the public had heard of us. Our public information and advice website  www.adviceguide.org.uk had seven million visits in 2007/08 and includes a frequently asked questions section in Bengali, Chinese, Gujarati, Punjabi, and Urdu.
General comments
Information about the CAB Service
As Consumer Focus (CF) is a new organisation, we would like to offer an introductory session to our organisation, how Citizens Advice Bureaux (CAB) work, our policy functions and our plans and areas of interest. We hope that this will ensure that CF staff have an understanding of the CAB Service and the scope of our work. To that end, we attach copies of:
- a report showing the impact of our policy work; and
- a leaflet explaining how client evidence is reported by bureaux and is used to inform our policy work
It is clear that areas of interest to CF are also within our remit. We believe that it would be beneficial for CF and ourselves to work together on issues of mutual concern to make best use of available resources.
Organisation name
In terms of the name we have noted that there is already a Consumer Focus Ltd, which comes up first when the new proposed name is searched on the internet. We believe there might be room for confusion between this company and the new consumer champion and are unsure whether the name is in any way legally protected against use by others. In the event the name was to be reconsidered, we favour the original proposed name,’ Consumer Voice’, which seemed to indicate clearly what the new organisation would be doing.
Policy work
There is a huge opportunity for the new Consumer Focus (CF) to bring both their own work and that of other stakeholders to the attention of policy makers in government, both in the UK and across Europe. The draft forward plan does not detail how this might be achieved and the types of interaction and working relationships CF will be seeking with those who are in a position to make the changes consumers need. We would expect that this will involve working with:
- government departments, who will be working to party political commitments and through legislation being developed here and across the EU;
- regulators, who will need to deliver on their annual work programmes as well as reacting to new issues as they arise;
- consumer organisations, who will have both existing and new commitments; and
- business, some of whom will need to report back through annual trade association events.
The policy work of CF will therefore need to be both reactive to these existing agendas as well as having the capacity to initiate work where new areas of consumer detriment arise.
We believe that CF needs to consult widely with others when drawing up its own plans, if it is to maximise its potential impact as a partner. For this to be effective, it will be valuable for us, as a consumer body, to know what capacity the new organisation will devote to, for example, research. We will want to both feed into work initiated by CF and have information as to their capacity for available support for work we are undertaking.
Joined up working
We are concerned that most of the proposals listed in the Chairman’s message, at the front of the consultation, are either within the existing remit of a regulator such as OFGEM, OFT, OFCOM or LBRO. Where this is the case, the list therefore appears to be denigrating what is already in progress, rather than welcoming it.
There is an opportunity here to work with regulators to help them make consumers more aware of regulator engagement with consumers’ problems. There is a need to explore how a virtuous circle can be made between consumers and regulators/ enforcers. The new role of Consumer Direct might act as a conduit to provide consumer feedback on market problems at an early stage. Often many, many consumers suffer detriment before regulatory and enforcement action comes to fruition. We fear that rogue businesses are well aware of these delays and exploit them, to the detriment of law abiding business and consumers.
It may be useful to consider these work plans in terms of anything the new body can do to assist those already empowered to act and to focus on filling gaps where nobody else is already engaged.
Planning for the Consumer Council for Water (CC Water)
For water and sewage customers it will be important that current work and plans of CC Water are included in the CF work plans. The Chairman’s introductory remarks do include a challenge to public services and choice, looking at health and housing, but do not directly link this to work in the water sector.
Flooding in 2007 resulted in plans proposed in the Pitt report. CABx reported a wide range of problems and some homes are still not in occupation over a year later. Where and with what protections homes are built in the future seem likely to be an area that will require some degree of CF engagement, particularly given the Government’s agenda for house building and future flood protection
We are pleased to see some commitment to working with CC Water in paragraph 21 but note that it currently lacks detail.
Referral mechanisms
In the past, Citizens Advice Bureaux have found it very valuable to refer particularly complex or difficult cases to consumer advocacy bodies, such as energywatch. Under the new arrangements, such bodies will no longer exist.
There are a number of features of the new framework which we particularly welcome, including:
- the imposition of complaint handling standards set by OFGEM;
- the creation of a statutory Ombudsman; and
- the provision of direct lines to ‘empowerment teams’ in fuel companies for CAB and Age Concern advisers.
However, we remain disappointed that when dealing with cases that require immediate intervention from Consumer Focus, CAB advisers will have to call Consumer Direct and request that the matter be transferred to CF for immediate action. We have tried unsuccessfully to agree a protocol to allow CAB advisers to refer such clients directly to CF, as they would have done to energywatch, rather than via the Consumer Direct portal. As a result, fuel and post customers who seek the help of trusted advice agencies, such as ourselves, have an additional and unnecessary hurdle to overcome to resolve their problems. It may mean that consumers get a poorer service in comparison to that available before the Act came into force. This seems to us be contrary to the overarching objective of the Government’s Consumer Strategy, to make the UK provision for consumers amongst the best in the world.
Status of Consumer Focus and potential redress role
We have suggested in past submissions under the Consumer Voice programme that the new body will need to have super-complainant status and to engage fully with the potential for taking group actions. We see this latter status as important as a tool for CF to deliver redress for consumers in respect of those areas of detriment the new consumer champion identifies. This could include encouraging groups of consumers with the same claim to come forward.
In addition, it may be valuable for consumers if CF can discuss with the regulatory and enforcement community how to make full use of the restorative justice provision in the Regulation, Enforcement & Sanctions Act. Under the new Act there is wide potential provision for determining the best level of enforcement and of fines. We have argued that these decisions need to reflect consumer detriment and provide adequate redress. For example, where a business agrees to refund to their customers the difference between the cost of a misrepresented tariffs and its true cost, the relevant regulator/enforcer might reduce the level of fine imposed so that money is available for the refunds. This could be straightforward in the utilities sector where refunds could be reflected in bills. In this way, consumers would be alerted to:
- the breaches by the business, increasing awareness of what is required of that business;
- the activities of CF and the regulator/ enforcer on their behalf; and
- the entitlement to the refund.
CF could maintain regular communications with the regulatory and enforcement community, so as to alert them to areas of consumer detriment and discuss how their proposed actions might include requiring business to include elements of redress as part of the outcome.
Consumer education and redress could both be achieved. This could result in:
- better information about poor customer services being reported to Consumer Direct and then to the regulators; enforcers and CF;
- vulnerable consumers who might not otherwise pursue redress might gain refunds they are entitled to; and
- it could potentially help provide some redress for unfair commercial practices.
Sustainability agenda
Sustainability is an issue across the utilities sector and one in which energywatch was active. In the current climate of high fuel bills, there is an opportunity to engage consumers about how they can reduce their bills through the installation of energy efficiency measures. Publicity and information about how fuel economies might be made could be an education target for CF.
Water is another area where prices may rise, due to the cost of repairing and modernising the Victorian sewage system. CC Water are proposed to become a part of CF so that there will be a need to take on work in this sector. Whilst this summer has been wet, that will not always be the case. When it is wet, there will be flood risks. Information on flood protection and on economic use of water, particularly metered water, should be considered for the time when CC Water may join CF.
Within this agenda there is also scope to consider issues such as access to better public transport to help reduce fuel consumption for private cars, particularly in rural areas.
Specific questions posed in the consultation
a. How best can we be an advocate for the interests of energy and post consumers?
In addition to securing redress for consumers where regulators fine businesses, as explained above, CF will need to:
- Be aware of industry plans to assess potential for consumer detriment;
- Be aware of complaints data across these markets, using Consumer Direct and other agencies such as Age Concern and the CAB service.
b. Do you agree that we should be an advocate for better customer service in public services?
Yes, we believe that poor customer service is usually at the root of the consumer detriment bureaux report. But some areas of public service, such as transport, already has advocacy through existing organization with specific knowledge and expertise, such as the Air transport Users Council, who are already undertaking this work. CF should look for gaps in public service advocacy, such as in residential and day care services.
Please also see the section above on CF status.
c. Do you agree that we should find ways to champion the interests of vulnerable consumers?
Yes, this is a target for the consumer law review team and they will doubtless expect engagement from CF. Vulnerable consumers are often poorly equipped to use the legislation available to gain redress. CF could use data, for example from Consumer Direct, to pinpoint areas of detriment to vulnerable consumers, such as those with learning disabilities. Improving poor business practice for these consumers will help all consumers. Further, with the new CPRs unfair practices targeting vulnerable consumers are to be judged against a typical member of that group. Business may well be open to discussion with CF as to how their practices can better test compliance with CPRs for the range of vulnerable consumers relevant to their product range. CF could partner specialist bodies who work for specific groups of vulnerable consumers, to challenge unfair practices.
d. Do you agree that we should find ways to promote sustainable consumption?
Please see our comments under sustainability above. This, we feel, will be an important area into the future. We would encourage CF to look across markets too, for example so that the wide UK engagement with distance selling via the internet is looked at in terms of postal services as against car trips to shopping centres.
e. Are the strategic goals that we have set helpful for consumers?
It is difficult to judge the strategic goals of: value, service, access and sustainability without examples of how they might be achieved. For example, how will CF make vulnerable consumers as powerful as providers?
f. What priority would you give to each of these goals?
The goals need to work together, for example, long term value for money and value as a retained customer may be an outcome from sustainable usage of fuel. Sustainability needs to be seen as the more acceptable method of using limited resources. In the ‘access’ goal, where fuel poverty is the result of poor housing stock, we are not sure how the poor will not inevitably pay more. Whilst energy efficiency measures help, some accommodation will still be expensive to heat.
g. Are there other things in strategic terms that we should NOT do?
We are confused by the claim on page seven of the consultation that you will not duplicate work better done by others. This is a necessary objective, but in the Chairman’s message several of the bullets deal with issues already within scope for regulators and enforcers. Please see the concerns raised in our initial comments on joined up work. We believe that CF should not seek to do what others do well already. Regular liaison with those that can influence markets should include awareness of what regulators and enforcers can do and encouragement for action to be swift, so as to avoid long periods of consumer detriment. This would help consumers to be aware of those whose job is to protect them.
h. Are these criteria right for us to use in deciding how to use our resources on behalf of consumers?
Whilst the criteria seem sensible for the objectives of CF, we suggest the addition of criteria for the CF role in informing government. For example, this might include looking at whether work can influence legislative opportunities.
Consumer organizations have all said that improvements need to be made to consumers’ access to redress. This came sharply into focus with the lack of redress available through the Consumer Protection from Unfair Trading Regulations (CPRs) and is a constant failure of utility company licence condition breach provisions. The consultation refers to a need for consumer confidence to act to improve the power of consumers to influence markets, mirroring objectives from the Government’s 1999 White Paper Modern Markets – Confident Consumers. Whether redress is not being achieved should, we feel, be a criteria for judging the work of CF, it features in the priorities but not in the criteria.
i. Do you have other suggestions for what we should work on?
We agree that capacity should be available for reactive work and suggest that any plans are shared at the earliest stage, so as to avoid duplication with organizations, including ourselves.
The proposal to publish data on complaints in the energy and post sectors is welcome but we wonder whether this will be based on figures in switching or focused on customer service. We are not sure how CF will ‘expose poor customer service at paragraph 24. It would be sensible to work with the regulator or this, if they are willing.
j. Are there proposals here that you feel we should NOT pursue?
We hope that you will accept our offer of an introduction to the CAB Service, so that we can work together and avoid duplication.
The second bullet at page 13 seems to reflect what the Public Utility Access forum (PUAF) is already doing. It may be more effective and beneficial to actively engage with PUAF in order to increase their influence, rather than reinvent the wheel.
Bullet four on page 13 refers to mobile phones. This is an area where we have an ongoing interest in achieving change too. This might be an opportunity for joint working between Citizens Advice and CF.
We are confused about the CF role at the seventh bullet on page 13 which says that CF will look at consequences of Post Office closures if the Government requests this. Will the role of informing Government mean that government can require CF to undertake specific work or will the organization be led by its remit as a consumer champion, including where this is at odds with government policy?
k. Who else is working on these issues? Are they better placed to advance the consumer interest?
There are a number of these that may be of interest:
- It might be of interest to CF that many bureaux have been running a campaign on post office closures, submitting detailed responses to the local area plans published by Post Office Limited. Given their well-developed links with the local community they are clearly best-placed to respond at this level and raise local concerns.
- Social inclusion is referred to on page 14. A lack of financial capability often results in social exclusion and we have seen increased financial capability as a tool to counter that exclusion. In this context, we would like to make you aware of the extensive work of the CAB service on financial capability issues, direct to consumers and to advisers who can cascade it further:
- In 2007 we established14 regional financial capability forums covering all of England and Wales. Mainly led by bureaux, the forums meet quarterly. Their objective is to build regional capacity for financial capability work by encouraging bureaux new to this area of work and by fostering understanding and cooperation with other regional delivery and funding partners. They have already attracted 1,000+ participants from over 125 bureaux and 300 other organisations.
- Forum members have successfully delivered financial education sessions to clients and frontline workers. These have included campaigns sponsored by OFT on Christmas savings schemes and by OFGEM and BERR on getting the best deal on energy prices. The OFT and OFGEM , with Treasury and BERR support, have recently extended their schemes with the forums on a nationwide basis. The Ipsos MORI survey of the initial Christmas savings scheme led the OFT to conclude that “ Citizens' Advice [forums] because of their knowledge and commitment, as well as their strong routes to local groups, are providing the essential delivery element without which the programme could not succeed.”
- We would expect that LBRO, the Local Better Regulation Office, would be working on improving enforcement, though it is not clear that the focus will be that of consumer interest as their remit is for even handed enforcement that helps avoid unnecessary inspection.
- Effective energy markets, at paragraph 23 point three, should be within the remit of OFGEM. However, we believe that practical guides on savings on fuel consumption, which OFGEM is not currently producing, might be a useful addition to this work stream.
l. Who should we be working with and forming partnerships with?
Please see the section on policy work in our general comments.
m. What do you see as our biggest risks?
We are concerned that the new organization may not have sufficient influence to ensure that government takes action on the evidence presented by CF about consumer detriment. Whilst the CEAR Act was going through Parliament, we briefed for a requirement that would ensure a response was required from government departments. But no such provision has been included. CF will need to ensure they specifically call for responses from government to their proposals.
It should also be noted that no guarantee has been made for the continued funding of Consumer Direct, whose evidence will supply CF with information as to areas of current consumer detriment.
Lastly, we suggest that the list for CF work might be too long at this stage. A shorter list might ensure more impact could be made, rather that the new body spreading itself too thinly across a large number of projects. The result may be a reputational risk. Decisions on those areas in which to concentrate their resources should, in our view, include complaints data in those areas where no other body has engaged with the problem and by the challenges of new legislation.
n. Are there organisations we should benchmark ourselves against in terms of value for money and advocacy work?
Our impact assessment document might make a useful tool for bench marking the effectiveness of CF’s work.
o. Do these four critical success factors seem right?
The important area of influencing the UK Government and the EU seems to be missing. This was included in the CAER Act at clause 8, so that CF might inform government about the experiences of consumers and how consumers’ needs might be responded to.
p. Do you have any other comments?
It would be useful to know what funds are likely to be available for research to be carried out by the CF. This was a valuable element of the work of the predecessor organisations.
Social Policy contact: Susan Marks Susan Marks
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