Empowering and protecting consumers
3 September 2011
Empowering and protecting consumers ( 190kb)
Consultation on institutional changes for provision of consumer information, advice, education, advocacy and enforcement
1.1 Citizens Advice and Citizens Advice Scotland welcome the Government's consultation on reform of the consumer landscape.
1.2 We wish to ensure that the outcome provides consumers with access to the best possible information and high quality individual advice about their rights; that consumers have powerful
advocates representing their views to the Government, industry and regulators; and that there are strong enforcement and consumer protection agencies ensuring fair and effective markets, basing this work wherever possible on evidence that our organisations obtain from providing services to consumers.
1.3 The Government has proposed some significant reforms to the consumer landscape so that in future the organisations which have the brief to look after and advocate for the consumer interest are those which are best known and trusted by consumers, are evidence based and have their feet firmly on the ground.
1.4 We agree that consumer advocates should have strong support from consumers, and citizens, if they are to have the right to speak on their behalf to influence businesses, regulators and governments.
1.5 To earn this support and trust, consumer advocates need to be totally rooted in and in touch with the consumer community; passionate about getting the best deal for consumers, whoever they are and whatever the issue, and competent and creative in arguing for and securing solutions. Consumer advocates should not be remote from consumers and they should support and enable consumers to advocate on their own behalf if they can and wish to do so.
1.6 We also agree that there is a need for change to the consumer landscape at this time.
1.7 Many consumers today feel extremely uncertain and their confidence has declined in the past year. For example the GfK NOP monthly consumer confidence index reports the overall consumer confidence index, at -31, is now at the lowest it has been since the downturn in 2008/09 and the early months of the 1990s.
1.8 Research by Which? is finding that consumers are justifiably more worried about energy and food prices than ever before. And public spending cuts and future tax levels aren't too far behind. Which? also finds that over three in four adults have reduced their spending in the last few months - entertainment, holidays and clothing were most likely to get cut.
1.9 In fact, the current situation has caused some people to delay major life changes, with 11% holding back on changing job and 9% on moving house.
1.10 For some consumers these financial pressures are, frankly, terrifying - with 5.5 million households now living in fuel poverty; over 4 million households in England, 777,000 households in Scotland and 332,000 households in Wales.
1.11 Other consumers are worried about a range of issues from the rising costs of care to the declining value of their pension investments or the lack of local public transport. Some consumers are totally fed up with "choice overload" and overly complex product offers from a range of markets and other consumers have no choices whatsoever.
1.12 And whilst consumers feel the pound in their pocket is just not punching at the same weight as it did in the past they are also paying for an estimated ?6.6bn of detriment each year caused by unfair commercial practices, such as pressure selling, and scams.
1.13 Not surprising then that consumers told the Citizens Advice service last year that tackling scams and rip offs should be a high priority for the Governments comprehensive spending review (CSR) and in a current survey by the Citizens Advice service consumers are saying the scams they are most concerned about are cold calls from debt management companies and unethical energy selling practices.
1.14 Low consumer confidence means that many consumers are just not using their market power. The 2009 Consumer Focus report, Streetwise, highlighted that three in four consumers feel big companies treat them as numbers rather than people and three in five think large companies would willingly mislead them to make money. As a result:
- 3 in 4 have never used the internet to leave feedback about a company
- 1 in 4 of the most wealthy consumers have never taken their business elsewhere due to being treated badly
- half of the poorest consumers haven't either, and those aged 15 - 24 years old are even less likely to
- 2 in 5 have not changed supplier after being treated badly
- 3 in 5 have not made a complaint about bad customer service
- 2 in 3 have still gone on to buy something even after they heard of others bad experiences.
1.15 Over the horizon every economically regulated market from energy and postal services to water and public transport is throwing up long term challenges about availability and level of services, the cost and quality - significant debates and decisions being taken now about the future financing and operation of those markets will affect consumers, communities and our economies in decades to come. The consumer voice should be heard loudly in those discussions.
1.16 And their voice should be heard loudly in Wales and Scotland as well as across Great Britain.
For more information about our work on consumer issues see Getting a better deal for consumers.