Kerry Lorimer navigates through the maze of organisations out there to help
Today’s consumer is more demanding, better informed, and far less reticent about having a gripe than ever before. But the chances are, we are also more baffled, not least because of the proliferation of bodies that exist to help us out – if only we knew who they were.
Google ‘consumer advice Scotland’ and up pops a dazzling array of
organisations: Scottish Consumer Council, Consumer Direct, Citizens
Advice Scotland, trading standards, Office of Fair Trading. All have
the worthy aim of preventing us from being ripped off. But where do you
even start, and is it really worth the bother?
It is precisely that sense of helpline fatigue that has led the UK Government to rip up the consumer map and start again. Two years ago, the former Department of Trade and Industry came up with the idea of a new organisation with the working title of Consumer Voice, which would bring together the National Consumer Council – including the Scottish Consumer Council – and the four sectoral consumer bodies, energywatch, Postwatch, the Financial Services Consumer Panel and the Ofcom Consumer Panel.
The thinking behind Consumer Voice was that it would promote the interests of consumers across all sectors, protect those who are vulnerable or disadvantaged and provide expertise on consumer policy. It was intended to be a more powerful consumer advocate with the critical mass to engage effectively with government, regulators and industry sectors. It was also supposed to be able to provide a more cross-cutting service to consumers – on the basis that anyone caught up in fuel debt is likely to have debt problems in other areas of their lives.
Alongside Consumer Voice would sit Consumer Direct, the telephone and online advice service funded by the Office of Fair Trading and delivered in partnership with local authority trading standards services. The aim of Consumer Direct is to give consumers a single point of contact with information and advice on all sectors.
There would also be a greater emphasis on companies to provide consumers with high standards of service and to deal effectively with complaints. New ombudsman schemes would be set up to resolve complaints in cases where the service providers are unable to do so.
Extensive lobbying meant key provisions of the Consumers, Estate Agents and Redress Act, which gained Royal Assent last July, differ from the original proposals.
Most conspicuously, the name of Consumer Voice has been dropped, and the new merged organisation will simply be called the National Consumer Council - although, confusingly, the whole reform programme is still badged as Consumer Voice within the Department of Business Enterprise and Regulatory Reform, as the Department of Trade and Industry is now known.
Secondly, the Scottish Consumer Council lobbied successfully to ensure the Act contained explicit sections setting out the devolved powers and functions of the new SCC. Under the terms of the original Bill, the SCC would have had a much more limited function as an advisory committee to the National Consumer Council in London, and the organisation feared its consumer advocacy function would be put at risk. Now that has been overturned, and the Scottish organisation is pleased with its strengthened role.
Thirdly, the scope of the new organisation is much narrower than was originally envisaged, as the Financial Services Consumer Panel and the Ofcom Consumer Panel will not be part of it.
So when all the upheaval of change is over, will the new arrangements actually give consumers a stronger voice?
Douglas Sinclair, newly appointed chair of the SCC, is confident that the new body will boost the collective clout of the consumer. “The consumer is going to have a much bigger beast on their side when it comes to government and service providers,” he says. “The new body will have the legal powers and the critical mass to work across all sectors and champion the interest of consumers in both private markets and public services, and at the heart of government.”
The changes are, he says, “far reaching”. “Scotland’s consumers will have a stronger, and more effective watchdog acting for them with the ability to assess a whole lot of related issues that straddle the different areas,” he says. “And there will be radical improvements to the level of legal protection that consumers will enjoy should things go wrong.”
The intention, says Sinclair, is to get the best out of the three organisations to be merged into the new body. That may well mean the new organisation taking on staff from energywatch and Postwatch to ensure their specialist complaints handling expertise is not lost. “The structure is still to be defined and decided, but we’re absolutely keen to ensure the new Scottish Consumer Council gets its fair share of Postwatch and energywatch resources,” he says.
Consumers will also benefit from the statutory obligation on energy companies and Royal Mail to clean up their act when it comes to complaints, he believes. “They’ll have no option but to up their game when it comes to dealing with customers,” he says. “And if they don’t, consumers can go to new statutory ombudsmen who have the teeth to enforce the best deal for consumers when companies get it wrong.”
With regard to complaints, the focus will be on ensuring that companies treat customers properly from the start, and that they get it right first time, says Sinclair.
“We want to prevent complaints happening in the first place rather than picking up the pieces for consumers after the damage has already been done,” he says.
“And very often, how the complaint is handled by the company causes more problems for consumers than the original issue that went wrong. The regulators in energy and post will have statutory requirements to set proper standards for complaints handling and, for the first time, companies that do not meet these standards will be obliged to answer for their actions.”
But isn’t the new system just as confusing as the old one? “If the old one was confusing then that’s surely an argument for coming up with something better,” says Sinclair. “You can’t just slot consumers into convenient pigeonholes as people who just post letters, people who just buy electricity, people who are just tenants, just patients and so on. Consumers who are having a tough time with fuel poverty are pretty likely to face dealing with failing markets and have problems accessing public services at the same time.”
There will be a nationwide programme to explain the changes, says Sinclair. The programme will demonstrate, critically, that the new arrangements will ensure people who need help will get it.
Tricia Dow, director of Postwatch Scotland, which will continue until its abolition to scrutinise the high-profile post office closures plan, says it is still unclear how the new arrangements will work.
“The new [national] organisation has only just got its chief executive in place, so until we see how it’s forming, it’s difficult to comment,” she says. “We are not exactly sure how it will work. There are a lot of Is to be dotted and Ts to be crossed.”
The success of the new system will be determined by how easy it will be for consumers to complain, she believes. “It’s no good sitting there dissatisfied with a service that’s not meeting what it’s promised to deliver,” she says. “It’s very important that the system makes it easy, that customers who need help get the right help at the right time.”
She is keen to play down the possibility that vulnerable consumers will be left with less support. “Anyone who needs help will get it,” she says. “It would be easy to say, just because we’re going, that everything will be far worse.”
So how should ‘vulnerable’ be defined? “In my own view, it can never be a closed door,” says Dow. “Circumstances change, for example, the floods last year, and lots of people became vulnerable who had not been vulnerable before. If there’s any rhyme and reason to it, the definition won’t be a strict one.”
The task of definition has been given to the new SCC – a job it knows will take time and careful thought. “The important thing is that we come up with a definition that protects people and, at the same time, is not so ill-defined that pretty well everyone you can think of is classed as vulnerable,” says Sinclair.
David McNeish, parliamentary and policy officer at Citizens Advice Scotland, an umbrella body representing local Citizens Advice Bureaux, is one observer struck by the irony of a reform that was intended to declutter matters for the consumer but is still looking anything but simple.
He describes the reorganisation as “neither one thing nor the other”: “It’s not a wholesale seismic shift, but it’s still a major disruption,” he says.
McNeish’s concern is whether people will be able to navigate the new system. “In terms of what it means for energy, it’s made things more complicated,” he says. “Before, if you had a problem you tried to sort it out with your supplier, and if they couldn’t help, you went to energywatch.
“Now you get advice from Consumer Direct, and if it’s more complicated, you can go to the Ombudsman, and if you’re a vulnerable customer, you can go to the National Consumer Council.”
The Act places huge emphasis on the companies’ internal complaints structure, he points out – faith which he fears may prove misplaced. “It’s putting the cart before the horse to take away the existing body that deals with complaints before there’s any guarantee that better internal complaints handling is in place,” he says.
There have also been concerns over where customers whose complaints cannot be dealt with by Consumer Direct will end up. Citizens Advice anticipates a sharp increase in the number of people seeking help from their local bureaux on disputes with utilities companies – and it does not yet know in what circumstances complex cases will be referred to the SCC.
Trading standards officers, too, are worried about the potential impact on their workload. “There will be new redress schemes for the regulated utilities…but only time will tell how effective these are at bringing consumer disputes to a satisfactory outcome,” says Ken Daly, trading standards manager at Dundee City Council. “If these fail, people will be bounced to other advice sources like us.”
Unfortunately, not all councils would be able to cope: many have seen their consumer advice capacity dwindle since Consumer Direct took on that role in 2004.
“There is a threat that since Consumer Direct will not be in a position to intervene on behalf of disgruntled utility consumers, there will be a significant workload that will be displaced onto local authorities under current partnership arrangements to deal with referrals from Consumer Direct on other consumer issues,” says Daly.
But regardless of the impact of the new system on consumers, the process of setting it up has opened interesting questions. There is, in particular, a debate to be had on the way the consumer lobby is organised and funded in the UK.
Campaigners say the fact that this reorganisation is happening at all highlights how closely consumer bodies are tied to the Government. We tend to accept that bodies such as the SCC should be publicly funded, but is that the case? The United States, for example, has a well developed consumer advocacy lobby which is tied neither to government or business. There are also examples of powerful consumer voices in this country, such as Which? magazine, whose effectiveness relies on its independence.
Luke Gibbs of OfcomWatch, a group blog on media and communications regulation, says it is much more convenient for policy makers to have the consumer lobby publicly funded.
“It’s easier to be independent if your money is sourced from members of the general public,” he says. “If you’re empowered by legislation, and funded by the public purse, it’s much harder.”
Which is certainly one debate that could continue beyond the current programme of reform.
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