Thursday, 21 August 2014

Spain leads the charge to limit bank card fees

Banks say banning card fees would increase costs for the consumer. David Ortega, of CI Member OCU, explains why Spain and the EU disagree.

The Spanish government, as part of a package of measures to boost the economy which should enter into force on 1 September, has decided to limit the fees for payments with credits or debit cards: to 0.3% for credit card payments and 0.2% for debit card payments.

As an additional constraint, a maximum fee of seven cents is foreseen for debit payments, to avoid cases where the new scenario could generate higher commissions than today.

For small payments, of up to 20 euros, these commissions are set at a lower level: 0.2% to 0.1% for credit and debit cards.

These regulations shall apply to all payments made at points of sale in Spain in which at least one Spanish provider of payment takes part. This also includes e-commerce transactions.

Business cards, corporate or cash withdrawals at ATMs are excluded.

Spain  is effectively  putting into practice the proposed regulation of the European Commission on interchange fees, which aims at regulating maximum fees as a measure to promote the internal market.

The current economic context, the gradual economic recovery and the need to invigorate consumption across all channels - including the electronic one - call for the availability of safe, efficient and competitive electronic payments.

But how does this work? A multilateral interchange fee (MIF) is a fee that a retailer's bank must pay to a consumer’s bank for each card payment.

MIFs typically involve four parties: two banks, a consumer (the cardholder) and a retailer (merchant accepting a card payment). For every individual card payment the retailer pays a charge to its bank called a Merchant Service Charge (MSC), most of which the retailer’s bank passes on to the consumer’s bank under the name of a MIF.

As a result, the final amount received by the retailer is less than the amount paid by the consumer. To compensate this loss of income, retailers usually add up these fees to the final price paid by consumers. Hence the consumer detriment.

Through the legislative process at EU level, there has been heavy lobbying by some card issuers and some banks to stop this initiative.

According to the evidence presented by these groups, the proposed limits would indefectibly lead to an increase of bank fees in general (e.g. in the form of card issuance fees).

Part of the evidence used by these companies would be based on Spanish figures.

According to them, since Spain adopted the first MIF limitation measures back in 2006, bank fees have not ceased to increase. Perhaps.

However, nobody has been able to substantiate that such increase is solely or mainly due to the MIF limitation measures.

In the meantime, the credit crunch and the burst of the real estate bubble in Spain have ravaged the Spanish banking system.

In this context, can anybody seriously argue that the reason why Spanish banks have consistently increased their fees is due to the MIFs limitations?

How can that be deducted from the banks’ accounts?

Moreover there are still commission free cards on the market, which proves that the alleged causal link is hard to prove.

OCU and BEUC reject these arguments and support the European proposal which should  boost the internal market for consumers.

Spain is the proof that such a ban or limitation is possible, without the catastrophic consequences for consumers that some lobbyists seem to find so inevitable.

Tuesday, 15 July 2014

Will consumer rights be at the heart of global sustainable development policy?

CI’s Head of Advocacy Justin Macmullan, outlines why the inclusion of consumer rights is fundamental for the future of sustainable development.

In 2015 the UN General Assembly has the task of agreeing a set of Sustainable Development Goals (SDGs) that will build on the momentum created by the Millennium Development Goals (MDGs).

Like the MDGs, the SDGs will represent a major international agreement and have the potential to influence development policy for years to come.

Good progress has already been made and a zero draft sets out seventeen goals with a number of targets under each.

But there is something missing. Consumer rights are not mentioned. CI believes this is a serious omission and we are campaigning for consumer rights to be put back into sustainable development.

The missing link


The zero draft does include a goal on Sustainable Consumption and Production (something CI has long campaigned for and strongly supports), however this is largely about supporting and promoting environmental and ethical consumption and, as important as this is, it doesn’t address the wide range of issues that consumers struggle with.

Apart from sustainable consumption and production, there are also many other goals and targets in the draft that consumer organisations would recognise and support – including poverty eradication, promoting an efficient and equitable economy, water, energy and health to name just a few.

Why consumer rights matter

The consumer perspective is important for two reasons.

Firstly consumer protection is fundamental to the implementation of many of the other goals that have been proposed and “implementation” is important. As we have seen with the Millennium Development Goals, it is one thing to develop a set of ambitious goals but it is another to deliver on them.

However consumer protection is also an important issue in its own right. Any full definition of sustainable development should include consumer protection.

After all, people’s ability to consume, the consumption choices they have available to them and whether they are treated fairly as consumers, fundamentally effects the quality of their lives and the lives of those around them.

To give just three examples of why consumer protection is important:
  • The first of the proposed SDGs is to ‘End poverty everywhere'. To achieve this poor and vulnerable people need to be sure that they can spend and save their limited income safely, yet they are often amongst the most exploited in the marketplace.
  • The third of the proposed SDGs calls for ‘Attaining healthy lives for all'. This means that consumers need access to healthcare but also protection against unsafe products and services that cause ill health, injury or death.
  • The eighth of the proposed SDGs calls for 'Sustained, inclusive and sustainable economic growth'. It is hard to see how this can be achieved unless consumers are represented and empowered to play their part in the economy.

Similar points can be made in relation to almost every one of the proposed Goals.

Putting consumer rights back into sustainable development


For this reason Consumers International is campaigning for implementation of the UN Guidelines for Consumer Protection to be added as a target under the proposed goal relating to ‘inclusive societies and access to justice’ or ‘means of implementation’.

This is a practical and realistic proposal. The UN Guidelines are internationally agreed and they have proved their value over more than 30 years.

Through CI’s State of Consumer Protection report we have also demonstrated that it is possible to measure their implementation (though we look forward to seeing what more can be done in this area with the right resources).

The process of negotiating the SDGs is already well advanced, so please join CI’s call for consumer protection to be included in the SDGs by contacting your Minister for Foreign Affairs.

You can also watch my video message on these goals - feel free to share.

Monday, 14 July 2014

Junk food World Cup: CI shows football puts profits ahead of world obesity crisis

Competitive sport and junk food should not go hand in hand. Consumers International’s social media campaign during the World Cup in Brazil this month demonstrates that unfortunately they often do, says CI's Nora Blascsok.

The tournament is being used by the food industry to market unhealthy food. Coca Cola is one of FIFA’s major partners and McDonald’s is one of the first-tier World Cup sponsors.

FIFA partners pay between $25-50 million each per year, while first tier sponsors pay between $15-20 million each .

Besides sponsors, other companies like Pepsi, Domino’s and KFC use the World Cup to sell more food and drink products. According to consumer research firm Webloyalty, sales of unhealthy food and beverages tied to the World Cup will reach $459 million in the UK alone.

To highlight the problem, CI asked people to collect examples of adverts in which pictures of footballers and other images relating to the World Cup are used to advertise food and beverage products high in fat, salt or sugar.

These examples were then tweeted or posted on Facebook using the hashtag #JunkFoodWorldCup.

CI Members, as well as many other people on social media around the world, actively participated in the campaign.

Pictures of billboards, TV adverts, interactive marketing promos and publicity stunts involving famous footballers were published on social media, showing how truly global the reach of the food industry and its marketing machine is, especially during events like the World Cup (see our collection of pictures on Facebook).

The social media campaign has reached an estimated 76,090 accounts on Twitter, with the hashtag #JunkFoodWorldCup mentioned in 716 tweets over a period of nearly three weeks.

Many of the adverts tweeted or posted on Facebook use techniques that are known to be appealing to children.

Not only do they star footballers who are well-known and admired by children throughout the world, they also use bright colours, music and often contain an interactive element (such as competitions or games).

CI food expert Anna Glayzer points out: “If children see their favourite footballer advertising crisps or a highly sugared beverage, they will associate that product with sport and with being fit and healthy.”

200 million children globally are either overweight or obese, with 40-50 million classified as obese.

Obesity in childhood has a high likelihood of leading to diseases such as diabetes, cardiovascular disease and cancer in adulthood.

Currently 2.1 billion people are obese and overweight worldwide.

CI is campaigning for global action to address the marketing of unhealthy food. In our publication, Recommendations towards a Global Convention to protect and promote healthy diets, CI calls on governments to restrict advertising that is likely to create an erroneous impression about a product’s health benefits and other characteristics, and to prohibit or restrict the sponsorship of international events by companies and brands associated with unhealthy foods and beverages.

You can see some of the images posted to Twitter  which show the extent of 2014's junk food promoting World Cup.

Protecting consumers in a new era of digital enterprise

Consumer protection faces dramatic change thanks to the fast-growing collaborative economy, argues CI Director General Amanda Long. 

I’ve just returned from California, where one of my engagements was to speak at the ODR 14 conference.

The success of ODR – online dispute resolution – is one of Silicon Valley’s best kept secrets. Take Modria, the ODR platform founded by this year’s organiser, Colin Rule.

It resolves more than 60 million disputes for users of eBay and Paypal every year – a figure that speaks to its appeal and advantages to consumers over traditional routes to redress, such as small claims courts.

Other providers, such as Youstice, are entering this space with their own innovative takes on dispute resolution.

They form part of a nascent, but growing landscape of apps and services that look to remove the friction and frustration of seeing complaints and disputes through to successful resolution. Examples of the wider landscape include the train refunds app in the UK, which makes it easy for commuters to claim the compensation they are due for delayed journeys.

My speech  formed part of a session entitled ‘Consumer Protection and the Collaborative Economy’.

Fellow speakers included former Directors of Trust and Safety from AirBnB and TaskRabbit.

The collaborative economy has grown at an astonishing rate in a short time. Take two of its best known platforms – Airbnb, the peer-to-peer short-term accommodation letting service and Uber, the service that links drivers with people who need transporting between places.

Airbnb has gone from zero to 600k listings and 15m guest bookings in less than six years. Uber has gone from zero to activity in 130 cities globally, providing millions of trips in less than five years.

That growth reflects their popularity with consumers, who have responded positively to the innovation and competition, choice and value these platforms have brought to their respective sectors.

However, as the speech noted, the rapid growth of these services can present a range of challenges on how to ensure longstanding consumer protections - such as those relating to fair treatment and safety - can best be transposed to the collaborative economy.  And how to achieve that without strangling the innovation that sets these companies apart.

The rulebooks that govern the markets that collaborative economy enterprises are disrupting were drafted at a time when services of this kind were unimaginable.

Therefore, the wisdom of just throwing the existing rulebook at these services has to be questioned.

Particularly where the service in question blurs across traditional regulatory siloes. Yet that’s what we’re seeing in the responses of some city authorities – a reflexive reaction that risks favouring incumbents more than it favours consumers.

Neither is complacency the answer. Indeed, providers of collaborative economy services need to realise that a perception of complacency, or worse, immunity, is likely to attract the kind of sub-optimal reflexive reaction outlined above.

So what is the answer? Simple: consumers must be the winner. But while this answer is simple, figuring out how we arrive at it will be more complex.

In some instances legislation and regulation will undoubtedly need to be rethought; and this has to happen in ways that can deliver a dual outcome that supports both innovation and protection, rather than having one trump the other.

But the key response has to come from collaborative economy enterprises themselves.

They will need to evince their pro-consumer credentials by demonstrating that where their innovation delivers a better proposition for consumers, protection is designed into that proposition.

Consumer bodies are ideally placed to help both collaborative economy enterprises and the relevant authorities navigate this complexity; and have an interest in doing so.

We understand the protections that must endure and why that is so; and have a deep understanding of the mechanisms by which this can be achieved.

And we also understand the benefits that collaborative platforms are delivering to consumers. Collaboration with us will be key to arriving at the right answer.

Wednesday, 4 June 2014

Empower financial consumers with CI's latest e-learning course

CI's financial services expert Nicola O'Reilly outlines our new e-learning course on basic financial services – a great way to help consumer advocates campaign for better protection.

Our aim to develop a stronger consumer movement will be taking a major new step over the next couple of months with the launch of our second e-learning course.

Free to staff of CI Members and CI Supporters, our second course looks at how consumer groups can use, understand and influence policies and practices in financial services.

We have partnered with the SMART CAMPAIGN to deliver this course which is based on their Client Protection Principles.

With an estimated 150 million consumers entering the financial services market each year, we also need many more consumer advocates working in this area to ensure the way consumers spend, save, send and receive money is secure and reliable and clearly and competitively priced.

You can receive updates on how to register by downloading the application form on the CI website.

The course is made up of five one-hour sessions, taken over a five week period starting on 18 June 2014.

The seminars are conducted online via our Adobe Connect service, with an offline alternative for those with unreliable internet. This e-learning experience will give consumer advocates the knowledge and confidence to:
  • Understand what financial consumer protection looks like in practice
  • Explain to others the need for financial consumer protection and the role of consumer advocates
  • Show how good practices in financial services can improve the consumer experience
  • Find tools and resources needed to develop advocacy campaigns in financial services    
  • Know how to use consumer advocacy to improve financial consumer protection.

This course is specifically designed for those who know about consumer protection and are looking to apply that knowledge to financial services. Each seminar will include a tutorial, with a speaker from CI and an expert from our partners at the SMART CAMPAIGN and a Q and A session.

Participants who complete the course can expect to earn a certificate, signed by CI, giving them the confidence and credibility to engage their national standard body on consumer issues within the international context.

Why is CI doing this? Consumers International exists for two reasons: to campaign for consumer rights at the international level and help develop consumer rights protection where it’s needed most.

On the first issue we are working with our Members and Supporters in every region of the world – and with international decision-making bodies such as the G20 – to stand up and demand a better deal for consumers.

On the second issue (what we at CI call Organisational Empowerment) we are putting tremendous efforts into improving consumer protection in countries and communities where it is poor or non-existent.

Financial services is used by consumers all over the world on a daily basis, those consumers need representation, so we are providing this e-learning to support more consumer advocates to work in the area.

We hope that our financial services e-learning course (together with others we have planned on campaigning, business development and communications) will help our Members and Supporters effectively serve and protect consumers.

Don’t forget to email if you want find out more or simply download an application from the CI website. 

Thursday, 29 May 2014

Amanda Long: We must act now to stop obesity killing millions

As worldwide support for our call for tougher action on unhealthy diets shows, there is an overwhelming consensus that the obesity crisis is out of control. CI's Director General, Amanda Long, on why we need immediate action.

Last week, we launched a new set of Recommendations that call for a Global Convention to protect and promote healthy diets, drawing worldwide media coverage and support.

Developed in consultation with Members of both Consumers International and the World Obesity Federation, as well as a wider network of public health experts, our Recommendations have already received endorsement from the likes of  the UK's Association of Directors of Public Health, the US Public Health Institute, World Cancer Research Fund, European Public Health Association , and the UN's food chief Olivier De Schutter. Not to mention the support of our 250 membership orgainsations around the world.

Such strong support underlines the fact that the case for a Global Convention on healthy diet is now overwhelming. We face an unprecedented health crisis, that is largely preventable – yet action is falling far short of what is required.

Here are a few shocking statistics:
  • One person every seven seconds dies of diabetes – nearly half of those deaths (44%) are attributable to overweight and obesity
  • 9.4 million people die of hypertension every year – with high salt intake a major risk factor for that disease
  • obesity rates have nearly doubled since 1980
  • 2.3 billion people will be overweight by 2015.

This crisis is truly global – the highest rates of growth for obesity and overweight are now found in low and middle income countries.

As Margaret Chan said in her opening address to this year’s World Health Assembly:

"We see no good evidence that the prevalence of obesity and diet-related non-communicable diseases is receding anywhere. Highly processed foods and beverages loaded with sugar are ubiquitous, convenient, and cheap."

The figures are absolutely compelling. Yet our collective response is lagging far behind what is needed.

Calling for a Global Convention inevitably draws comparisons with the Framework Convention on Tobacco Control (FCTC). Of course food is not the same as tobacco – but in public health terms we are facing a similar, or even greater, crisis.

The point is about impact.

When it comes to the scale and scope of the impact, tobacco and unhealthy food are directly and very worryingly comparable. 

Smoking still kills six million people a year and rates continue to rise in many countries.  In some countries however, rates are decreasing; in large part because concerted efforts by governments to put public health ahead of the commercial interests.

The FCTC is a major part of this story. It was a ground breaking international agreement that built political will and led to co-ordinated action around the world.

The shocking truth is that, today, poor diet is the number one cause of premature death globally – more than smoking.

As we seek to tackle poor diets we need to learn from the FCTC success, without repeating the thirty years of debate that led to its adoption. We cannot afford to allow the food industry to repeat the foot-dragging strategy taken by the tobacco lobby.

How many times have we said to ourselves – if we knew then the harm caused by tobacco, we’d have done things sooner? Well we do know the damage of unhealthy diets– let’s make amends and prevent a similar catastrophe.

We believe that the global community can, and must, do better than the story of tobacco controls.  The vast majority of deaths from unhealthy eating are preventable. There is widespread agreement about the policies that will have an impact – but we are not doing enough and we are not taking action fast enough.

Of course there are some good examples. Governments that have moved on this such as Finland, or more recently Argentina, with programmes to reduce salt in food. Others such as the UK have pushed for clearer labelling. And of course the recent decision by the Mexican government to tax soda and junk food.

At the city level the excellent lead taken by Michael Bloomberg when he was Mayor of New York, introducing calorie labelling in restaurants, making the food that the city authority provided in schools and hospitals healthier.

Companies are also responding by reducing fat, sugar and salt in food, improving labelling and some efforts to reduce marketing to children.

Many of these developments have been the result of pressure from campaigners all over the globe – including CI Members.

But the response – whether from governments or the food industry - is inadequate.

Ten years ago, the WHO adopted the Global Strategy on Diet Physical Activity and Health. It marked a significant step forward but steadily rising figures for obesity and non communicable diseases show that it is clearly not enough.

Individual related WHO programmes and guidance, and Codex initiatives on labelling are all important steps, but without the political will and comprehensive approach offered by a Framework Convention they are not having the impact that is needed.

The WHO Global Action Plan for the Prevention and Control of Non-Communicable Diseases, that was adopted just last year, calls for a ‘halt’ in the rise of obesity and overweight.

Just a halt. Given the rate of increase, this was thought to be realistic. What a sad indictment. It should not be accepted. It is just not enough.

Back in 1998, then director of the WHO, Dr Gro Harlem Brundtland speaking on the FCTC said:
‘Tobacco control cannot succeed solely through the efforts of individual governments, national nongovernmental organizations and media advocates.  We need an international response to an international problem’.

The direct parallel is here.  This problem is global and systemic and requires a global, systemic response.

We need concerted action on a global scale.  In doing so governments will be truly serving their citizens. Putting them first. Acting for those they represent and sparing them the horror story from poor diet that we all saw happen as a consequence of inaction on tobacco controls.

The world cannot wait another 10 years until we find the will to take the action necessary.   And we cannot contemplate the 30 years it took to get the FCTC agreed.  We cannot let history repeat itself.

Saturday, 24 May 2014

Birth choice: CI's UK Member delivers website to help expectant parents

Using public data, Which? has created a website to help parents easily understand crucial information that can help them make the best decisions ahead of their child's birth, says Sonia Sodha, the organisation's Head of Public Services and Consumer Rights Policy. 

Which? Birth Choice is a free-to-use website that brings together everything expectant parents need to know to decide where to have their baby.

Information on different birth environments and personalised statistics are drawn together and presented in a way which recognises the importance of personal considerations alongside medical factors so that women can make an informed birth choice. 

Which? Birth Choice stemmed from the desire of Which? to use available data to empower consumers in public services.

The Birthplace study (BMJ 2011) revealed that where women plan to have their baby has a significant impact on birth outcomes.

However Which? research found that at the beginning of their pregnancy a third (34%) of mothers said they knew nothing or not much about the amount of choice they had about where to give birth and half (49%) said the same about the different types of maternity units available to them.

Furthermore, as health data is often put into the public domain in a form that is useful to clinicians, Which? identified a real need for a site that could not only use evidence to help women make a birth place decision but to do so in an accessible and interactive way, enabling women and their partners to easily understand the information.

And so in January 2014, Which? Birth Choice was launched. Our unique and interactive ‘Find and Compare’ tool asks questions about an individual’s preferences and circumstances to present the options that may be best for them.

Women answer questions such as “Do you think you will want to use a birthing pool during labour?” on a sliding scale and provide their age and postcode.

Responses are combined with evidence on place of birth, NICE guidance and a database of maternity unit locations to propose which local maternity services are the “best fit” and a “good fit” for the woman.

All of the maternity units in the UK have their own unit page on which information about facilities and women’s experiences of care is displayed.

The data which is presented in easy-to-read bar charts is manipulated according to the answers a woman provides in the ‘Find and Compare’ tool to display stats for women who are statistically similar to them.

This makes the information relevant and ultimately more useful. Women and their partners can also view units side by side to make direct comparisons and understand the differences between them. Where a home birth is suggested as a suitable option there is plenty of evidence-based information provided to help inform their choice.

The site is currently receiving over 11,000 visits a month and our average visit time of 17 minutes indicates excellent levels of engagement.

Visitors to the site are exploring the advice articles and using the ‘Find and Compare’ tool. It has been well received by the midwifery community and the the Royal College of Midwives officially support us.

By providing both general information about labour wards, birth centres and home births as well as an interactive decision making tool the site empowers women and their partners to understand the potential benefits and risks of different maternity choices.

Understanding that they have a decision and what the impacts of that decision may be enables women and their partners to make an evidence-based choice that is best for them and their baby.