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Automation for the Nation

Consumer

13 December 2018

Automation for the Nation 468 KB

Consumers shouldn’t pay for the mistakes of their essential service providers. But clunky and outdated compensation processes mean too often consumers do, and the impact can be severe.

The growth of automatic compensation has helped ensure consumers don’t lose out in some areas such as missed appointments in water and supply disruptions in energy. But automatic compensation is still not the norm. The result is some consumers not receiving the compensation they’re due, with our research finding that 1 in 3 consumer problems goes unclaimed. We have identified 4 key barriers that consumers face when claiming compensation:

  • Awareness of the initial problem, and their rights to compensation

  • Confidence in securing worthwhile compensation

  • Access to information on how to complain

  • Complexity of the customer journey when making a claim

Our research outlines key design features that are necessary for compensation schemes to be successful and accessible - whether automated or otherwise. These include introducing incentives to ensure companies comply, integrating retailers into compensation processes to prevent disputes over responsibility for compensation, and providing clear information to consumers.

Essential service providers should have a duty to simplify their complaints processes, and automate them where feasible. Compensation incentivises companies to improve their services, and - as a consequence - improve the consumer experience.

To make automatic compensation a success:

  • Regulators should introduce guaranteed service standards - with automatic compensation attached.

  • Regulators should ensure there are adequate incentives to ensure company compliance with automatic compensation schemes.

To improve all compensation processes:

  • Providers should present clear information on consumers’ compensation rights and claims processes.

  • Providers should remove the identified barriers to customer complaints.

  • Regulators should ensure consumers don’t lose out on compensation because of disputes between a retailer and a supplier.