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Modernising consumer markets: Citizens Advice formal consultation response

4 July 2018

Modernising consumer markets: Citizens Advice formal consultation response [ 0.61 mb]

We are pleased to respond to the Government’s consultation on Modernising consumer markets and look forward to working with it in the coming months and years to fix the market failures it identifies.

We welcome the ambitious analysis the Government has put forward and its acknowledgement that markets have too often tilted towards companies’ benefit and away from consumers’. We also support its understanding of the ways in which markets fail consumers, its proposals to rank firms on how they treat loyal customers and its new strategic steer for the Competition and Markets Authority.

Having set the Government’s ambitions appropriately high, bold action will be expected to fix the problems it sets out. In summary, our principal recommendations are that Government should:

  • Fund a statutory, independent consumer advocate in the telecoms market

  • Make firms publish how much they are overcharging loyal consumers and take further, evidenced action to reduce price differentials in essential markets

  • Enshrine minimum standards for people with mental health conditions in essential markets

  • Extend mandatory dispute resolution to every market, but particularly the used car and home improvement markets

We offer brief commentaries on each issue, which are addressed in more detail in subsequent answers to your questions. We also make further recommendations in our answers to selected questions below.

We recognise that time for parliamentary business is at a premium and that much action can be taken to help consumers without primary legislation. However, issues like giving the CMA proper civil fining powers, creating statutory advocacy for telecoms consumers and enhancing consumers’ data portability rights might best be addressed by a short, targeted Consumer Bill. In thinking about the next steps for the Green Paper, we urge the Government to give legislative options due consideration.

The need for telecoms advocacy

Broadband and mobile phone services are essential services and consumers have more problems with their telecoms provider than any other essential service: 27.6 million problems each year. Yet unlike other essential services such as water, energy and post, there is no independent consumer advocate. As we know from other sectors, a small investment in consumer advocacy could make a serious dent in reducing consumer detriment and improve the functioning of the market. In water, for example, consumer advocacy has helped 250,000 low income consumers reduce their bills by up to 80%. In energy, we helped reduce consumers’ energy bills by £300, by shining a spotlight on the profits of energy network companies and encouraging them to return money to consumers.

But a consumer advocate can do more than just expose and help fix existing detriment. In the big conversations about the future of these markets - from the rollout of full-fibre broadband to mobile spectrum allocation and the relationship between BT and Openreach - the conversation is one between regulators and industry. Given how pivotal telecoms is to the wider economy, it’s critical that the voices of consumers and small businesses are also heard.

Our detailed views on telecoms advocacy are set out in response to Question 5.