Could your Facebook friends stop you buying a house?

Lucy Hopkins,  Head of Sustainability and Consumer Futures, looks at why it's important to examine the downsides of the digital revolution.

Imagine a world where a company can refuse you a loan because your friends on Facebook have bad credit ratings.

Or one where you get worse deals than others when buying online because a company has tracked your search patterns and know that you’re not much of a bargain hunter. These things are already happening in the online world.

This is not to say that digital advances are a bad thing.

Widespread access to the internet and the tools and applications that have been built on it has brought many benefits – increased access to information, transparency, convenience and new means of communication to millions of people.

But there has been less focus on what the potential risks and challenges might be for consumers who are already adopting these technologies or who will take advantage of the new digital services and opportunities as they start to enter the mainstream in the next few years.

The Consumer Focus report, All that’s digital isn’t gold: The challenges and risks of the digital age, looks to address these concerns. Read it in CI's newly-launched Resource Zone. 

It covers issues from new web monopolies and online reputation management to unfair terms of data sharing and behavioural pricing.

The aim of highlighting these and other detriments is to prompt debate. It’s also to persuade those who are in a position to pre-empt and prevent these (regulators, enforcers, consumer groups and companies that operate in this area) to begin to think about, understand and respond to these consumer detriment issues now before they become widespread problems.

With change happening so fast, these groups also need to start to consider how best they can respond to the challenges these detriments will present to our traditional regulatory frameworks.

Challenges like the global nature of the downsides and the wheels of regulation not turning fast enough. These issues need to be addressed whilst the window of opportunity is still open.

Emerging trends: What will be the big changes to impact on the consumer movement?

We live in a constantly changing world. As an organisation working to advance the interest of consumers everywhere, CI has to make sure it is constantly adapting to new realities and anticipating future challenges, says CI campaigns officer Tom McGrath. 

That’s why every year we undertake a process to identify emerging consumer issues which could become future priorities for us and our member organisations.

So what issues are emerging?  Advances in technology are bound to be a key influencer.

In financial services,  technology has driven many recent innovations such as mobile services and near-field payment systems.

With consumer trust in traditional service providers at historic lows, and hundreds of millions of consumers as-yet unbanked around the world, many predict further new developments in this sector in the near future.

Alternative currencies such as Bit-Coin, for example, are now being accepted by some major online retailers.

With benefits including the ability to make international transfers free of charge, will alternative currencies become a significant global phenomenon in the next few years?

3D printing is another hotly anticipated new technology. Increasingly affordable, there is talk of a new era of ‘personal fabrication’, where consumers will be able create products at the push of a button.

What about technology which takes power away from individuals?

Self-driving cars, once confined to science fiction, are now viewed by many as the future of personal transportation.

Recent years have shown that technologies can evolve at break-neck speed and governments have not always kept pace.

It is vital that consumer organisations monitor developments closely and are in a position to respond to new issues.

At the same time, we must be careful not to neglect ‘older’ issues that can resurface, or indeed existing challenges which are  evolving.

Consumer  credit will continue to be a big issue – with ‘payday’ loans charging exorbitant interest rates causing concern in the US and UK.

Similar ‘payroll loans’, where repayments are deducted directly from the salaries of borrowers, are becoming increasingly widespread in places like Mexico and Brazil. 

Demographic change

Emerging issues have to be viewed in the context of longer term trends.  For example, many countries are experiencing profound demographic change. 

In advanced economies this tends to be driven by migration and ageing populations, while in many developing and emerging economies the proportion of young people continues to swell.

Perhaps of even more significance, the middle class in many of these countries is growing in size and influence. Urbanisation and suburbanisation, while not new, will also continue to change the way people live around the world.

Increases in wealth and access to technology will empower more and more people to demand consumer rights.

At the same time, hundreds of millions of consumers around the world will continue to lack access to the most basic goods and services.

One key factor will be how well governments are able to fulfil their duty to protect consumers.

In the most recent Euro crisis, consumers in Cyprus came disturbingly close to taking a haircut on their savings despite EU laws to protect deposits below 100,000 EUR.

Trade initiatives

Many countries are pinning their hopes on bilateral trade agreements like the Trans Pacific Partnership and
Trans Atlantic Trade and Investment Partnership. 

As the negotiations eschew contentious points like tariffs and quotas to focus instead on ‘regulatory harmonisation’, there are real concerns that ‘lowest common denominator’ outcomes will weaken important consumer safeguards.

Our recent global assessment of the state of consumer protection showed that many CI members are not only concerned about the lack of consumer protection measures, but also the failure to implement them effectively.

Will consumer organisations need to focus more resource on holding regulators to account in the next few years?

With so much work on our hands to address consumer concerns right now, it is easy  to concentrate on  the present. 

But making sure to take a step back every so often will help all of us to make sure we are still moving in the right direction.

Do you have any answers to the questions posed here? What are the key emerging issues in your country?

Let us know in the comment section below.

Helen McCallum's India Diary: Call for collective action, Part Three

CI Director General Helen McCallum travelled throughout India recently meeting with many CI members to discuss how a vast country with a disparate population can most effectively promote consumer rights. In Part 3 of her blog, she looks at possible solutions.

As I travelled round and talked to members I found myself wondering what they were expecting of CI and whether we could meet those expectations, given that, as a central body, we too need additional funding over and above the member fees to survive and support a growing movement.

Over the last year we have been following a strategy of:

• Focusing on a small number of issues which matter to all consumers. Issues for which there is  something to be achieved at the international level, most members have active work programmes and can pool and share ideas, and there is potential – subject to successful fundraising - to pursue more specific  regional issues within the overall programme.
• Developing services which can bring members together – either in their own backyard or across the globe – to share information and resources, to learn from the experience of others and perhaps in due course to offer or receive mentoring services from those who have more years experience or have developed an idea which is now transferable somewhere else.
• Finding additional sources of funding – both to sustain CI itself (so we don’t have to put the fees up) and to support specific targeted activity within our four priority areas in different parts of the world.

 It was with some relief that I discovered during my trip to India that members want CI to have already developed this strategy and be in a position to offer more tangible support to them.

They were all supportive of the direction. The strategy is sound – it is all now about rapid execution of it.

Why are we at this stage? 

Well as evidenced in India among some of the organisations I met, many organisations change in nature over a period of 50 years and there are always moments when an organisation has to stop, refresh itself and sometimes even re-invent activity which has become tired or fallen out of use because of changing personnel or different priorities.

CI too has had its ups and downs – with some large funders refocusing their activity away from consumer issues.

The international donor landscape has become much more competitive and the needs of  the consumer movement changing as more countries wake up to the risks of leaving consumers unprotected in an increasingly global market.

One year in and our priority programmes are attracting attention from international policy makers and increasingly grant making bodies and others donors.

We have had some successes in persuading the G20 to take action on consumer protection in financial services; getting more consumer representation on international forums on digital issues; achieving agreement on sustainable consumption goals at Rio+20 and completing our funded programme to introduce Consumer Protection Laws in three countries in the Caribbean.

Our members are actively participating in the  expert groups and more and more of you are joining our e-mail networks, receiving intelligence about the key issues and discussing the issues online.

From what I heard in Delhi, there is real enthusiasm and commitment to arguing for revisions to the UN Guidelines on Consumer Protection and there has been an explosion of activity around the world on World Consumer Rights Day. Our first international study, The State of Consumer Protection, should give many members ammunition for national lobbying and many governments food for thought.

Our online asset library, or Resource Zone as it will be known, is now live. This first stage is about recreating the physical resource libraries which once existed at regional office level and making the material we already have as accessible as possible.

This is just the first step – we have ambitions – if we can find the funds – to develop a more interactive online facility which will eventually enable members to debate in online forums, search for items they need and perhaps even directly input material that they think would be helpful to other members.

In the meantime however, we would urge members to think about training material policy documents or other useful resources they have and let Luke Upchurch in CI’s London office know about them so that we can mention them in the first stage of the Resource Zone.

In addition, we are refreshing our fundraising strategy, aiming to be clearer about our case for support and making sure we reflect regional variations in our pitch for funding.

We have set up webinars on various topics – impossible to time so that members everywhere can join in in real time – but sent out subsequently so everyone can catch up with the discussion in their own time.

What I can say is that the CI staff supported by your elected Council are 100% committed to the strategy and to driving new plans forward with energy and speed.

Although my time as DG will come to an end in December, the way forward is established and the search is on for a successor who can keep up the momentum and add new and innovative thinking to CI to help realise the aim of supporting you and developing a powerful consumer movement equal to the challenges of the 21st Century.

Helen McCallum's India Diary: Call for collective action, Part Two

CI Director General Helen McCallum travelled throughout India recently meeting with many CI members to discuss how a vast country with a disparate population can most effectively promote consumer rights. In Part 2 of her blog, she looks at possible solutions.

 

Despite much animated discussion and useful debate over Indian tea and spicy food during my trip, there is no single emerging solution to the problems of the consumer rights movement in India.

However, part of the answer may be to build on the strength of each consumer organisation (CO), pooling resources where it makes sense to do so and, unless it is critical to meet a specific local need, avoid duplicating expensive outlays.


Many of the European COs have concluded that collective purchasing of comparative testing laboratories is more cost effective than each organisation attempting to go it alone. They would, therefore, urge Indian COs to start active discussions about sharing facilities and undertaking joint action.

With all those I met I posed the question, “How much do you work with other COs?” The answers I heard varied from examples of active local cooperation to occasional participation in each other’s seminars to the reply “ego is the stumbling block!”.

So how can Indian COs work together?

• By pooling publishing resources, sharing relevant content and translating it into different languages, pooling design or printing services to get better deals;
• By sharing testing resources, ie, using the labs that exist already in India rather than creating new ones;
• By creating a national network of experts who can add much needed research and policy weight to advocacy campaigns and even joining forces to run a nationwide campaign where this makes sense; and
• By extending the cooperative purchasing model to cover more of India and consider joint purchasing of services as well as food and household goods.

All this could result in a ground breaking network of powerful consumer bodies better equipped to build consumer power and activism at the grass roots level and more powerful and impossible to ignore at the national level, with government and corporations alike.

Such a powerful network would also look much more attractive to international funding bodies – which not unreasonably want to see their funds make a real national impact – and who are reluctant to fund organisations which appear to be duplicating the work of others.

This view was supported by the representative of GIZ India who I talked to over breakfast one day – and is perhaps the impetus behind the government funded apex body CCC.

CI has already begun to explore this type of cooperative coming together in Africa – another large continent with many underfinanced and relatively small COs spread across a vast geographical area with significant consumer need and various cultural and linguistic differences.

The initiative is in the early stages but the concept is that larger and stronger CI members in different parts of Africa will act as the “hub” around which smaller groups gather – coming together to join forces on CI campaigns, training sessions and learning from each other.

The existence of these hubs – likely to be four or five in number – enables the CI staff (only three in Africa at the moment) to physically meet up with all members – visiting them all singly would just be impossible – and helps us to direct support and help in a targeted way.

If this works – and we should give it time to develop – it might also be a model which could be applied to India and perhaps other parts of the world.

CI's Resource Zone is another example of collective working - we want it to be a hub for research and capacity building materials that will empower member organisations worldwide.  

Salt reduction, iodine fortification and the challenge for the international consumer movement

Angela McDougall, Food Policy Advisor for CHOICE (the Australian Consumers Association), asks how we tackle the 'impossible challenge' of reducing salt consumption from the current, dangerously high levels while addressing widespread iodine deficiency - especially as salt is the primary vehicle for iodine fortification. 

According to experts at a recent meeting in Sydney, Australia, it’s not impossible – in fact, they believe that salt reduction and iodine fortification strategies are thoroughly compatible.

But the real challenge for the international consumer movement – and public health advocates – is ensuring that improvements in the food supply in some markets extend to other countries.

I can’t resist mentioning the gloriously long title of the meeting – the ‘WHO and The George Institute for Global Health Jointly Convened Information Exchange Forum with the Private Sector and Nongovernmental Organisations on Salt Reduction and Iodine Fortification Strategies in Public Health’.

Representing CHOICE (the Australian Consumer Association) and Consumers International, I joined government officials, eminent academics, industry and public health representatives from around the world to discuss strategies to address iodine deficiency disorders and reduce salt consumption.

The difficulty is that iodine deficiency is a major problem in many parts of the world - 54 countries, to be precise, including Australia – while at the same time there is a global increase in chronic diseases linked to excessive salt consumption. The World Health Organisation recognises the need to act on both problems, but this presents a challenge because salt is the primary vehicle for iodine fortification.

The key message is: eat less salt, but make sure any salt consumption is adequately iodised. This not only means that table salt should be iodised, but also that salt added to processed foods should be iodised.

Professor Dorothy Mackerras, Chief Public Health Nutrition Adivisor at Food Standards Australia New Zealand, spoke about efforts to address iodine deficiency in Australia. Here, a 2007 regulation mandated iodisation of salt in bread (with the exception of organic bread to allow for consumer choice). The most recent data is currently being assessed and Professor Mackerras expects it will show that this strategy has largely addressed iodine deficiency in Australia.

When it comes to innovative ways to reduce salt, we heard about a potassium chloride product from Nu-Tek. According to the company, their product does not have the bitterness commonly associated with potassium chloride because a special process they have developed, allowing reductions of up to 50% of sodium.

Australian consumer and public health advocates are not alone in despairing at the glacial pace of salt reduction through industry reformulation commitments.

When industry is pressed on why it doesn’t do more, the common response is that consumers won’t buy the product if they reduce salt too quickly.

And while there is much talk of the need for legislated reduction targets and mandatory, effective front-of-pack labelling, such interventions may be a long way off.

In this context, products like Nu-Tek are attractive to companies scared that reducing salt will also reduce market share and therefore have the potential to improve the food supply and health outcomes.

According to Nu-Tek, many companies are using the product in the United States (where there is also retail version available for consumers to purchase) and there is considerable interest in Australia.

Despite this glimmer of hope, it seems that even where companies act to reduce salt, their actions are often limited to markets like Australia where there is pressure from governments and strong public health and consumer groups.

Similarly, we heard from a Nestle nutritionist representing the International Food and Beverage Alliance who stated that her company fortified a popular two-minute noodle product with iodine in Papua New Guinea.

While giving the company credit for this action, it was recognised that there are many other markets where iodine deficiency is a problem that haven’t benefitted from this good corporate citizenship.

I think these examples suggest an opportunity for the international consumer movement to act.

Our organisations should call on multinational companies to extend salt reduction programs in developed countries to developing countries and offer iodised food products they develop across markets where there is iodine deficiency.

As the Australian example shows, iodine deficiency is not limited to developing countries but it is a problem that can be fixed. And as developing countries are increasingly targeted by multinational food companies, chronic health problems caused by excessive salt consumption will spread.

With so many governments reluctant to regulate to reduce diet-related disease, consumer groups should join forces and push for private sector action to address these problems. 

Mapping our members to help them grow

Indrani Thuraisingham looks at how CI’s recent evaluation of its members will help us build a stronger consumer movement. 

Consumers International is its members. Without them, we would not have the authority, expertise, reach or influence we can draw upon at the international level.

We would have no mandate to speak as the global voice for consumers, and no legitimacy when trying to advance consumer rights across the world.

That is why, late last year, we undertook a unique study to map the sustainability of our member organisations – to see where they are strong, where they need help, and where we can make a difference.

Today, we publish the aggregated results of this Sustainable Business Model Survey. They make fascinating reading for anyone interested in the health of the consumer movement and the sustainability of NGOs more generally.

Complex, but crucial

This was a necessarily complex survey that required a great deal of effort on behalf of the respondents. Even so, two thirds of our global membership responded to the survey, giving us an unprecedented picture of the business structure, programme effectiveness, financial performance and institutional capacity of the majority of CI’s member organisations.

With this information, we are now able to assess the relative strengths and weaknesses of business models, draw out commonalities, and bring attention to areas of risk and underdevelopment.

We have been able to grade each organisations with regards its sustainability and plan to benchmark this against their development for years to come.

Unsurprisingly, 87% of CI members who were assessed are either ‘overall sustainable’ or ‘fairly sustainable’ – an indication of the quality of management present in the consumer movement.

But we were also able to identify some runaway success stories, as well as clear areas where groups were struggling.

An array of business models

Perhaps most interestingly were the variations in the business models being applied, with some brilliant examples from every part of the world:

• The Network Model:  where the CO establishes 'subsidiaries' of independent organisations that carry out specific CO functions and generate their own income (39% CI members operate are utilising  this Model)
• The Public-Private Partnership Model: where the CO forms a symbiotic relationship with a privately owned corporation with a consumer rights interest and receives commission/ percentage in return for their role. (14% CI members operate using this Model)
• The Service Delivery Model:  where the CO charges fees in delivering CO functions such as research , legal advice, product testing. (27% CI members operate using this Model)
•  The Entrepreneurial Model:  where the CO establishes a “business entity” generating a market base that utilises their products and services to generate income for the CO and the shareholders of its enterprise (2% CI members operate using this Model)

Helping members to help themselves

CI will now use these survey results as a spring board for our Organisational Empowerment (OE) programme – primarily to identify the areas we can offer assistance.

This has already begun with the online launch of the CI Resource Zone: a digital library of resources, research, publications, webinars, videos, and how-to guides geared towards the consumer movement.

Users can already leave comments and provide feedback on any of the 150 or so resources currently uploaded and, over time, the Resource Zone will develop into a space where CI Members, Supporters and other partners can share their own materials.

This is a first step in helping our members to help themselves. We are already looking at more targeted assistance, based in part on the survey results, and ideas for future partnerships and collaborations.

The survey has enabled CI to generate a set of criteria to benchmark COs on their sustainability and allow CI to prioritise its OE programme based on organisational needs.

Baseline data can be used as a reference point to assess members’ progress towards achieving sustainability.

The survey can be repeated in the future to monitor progress made by members following the implementation of the OE activities.

This, however, will depend on funding as well as organisational needs and demands.

Over the last five decades, CI membership has grown from five founding organisations to over 240 consumer groups in more than 115 countries.

It is clear that if we are to continue to grow our membership in a sustainable way, we will need to give close care and attention to the structure, viability and relevance of consumer groups wishing to be part of CI.

Making sure our member organisations are fit for purpose is crucial to achieving that goal.

A lift for consumer protection in China

CI’s Luke Upchurch on how our newest Supporter organisation is a step in the right direction for consumer protection in China.

Apparently, there are 1.6 million elevators in the China. It’s one of those statistics that brings home the enormity of this nation and the mind-boggling size of its growth.

It was also the subject of a memorable anecdote at the launch of China’s first Research Centre for Policy and Law on Global Consumer Protection. The Centre is the latest organisation to take advantage of our new CI Supporter category of association.

Established by Wuhan University, one of China’s oldest academic institutions, the Centre is one of only a handful in the world dedicated to the study and development of global consumer protection and law. CI was at the inaugural event to present our latest findings on the state of consumer protection and welcome the Centre into the global consumer movement.

The ‘elevator pitch’, put forward by an eminent law professor at the event, began by pointing to the safety regulations for lifts in China: the frequency of effective inspections, the need for certification, the liability of the building’s owners and the statutory rights of anyone injured whilst using the elevator.

Consumer protection in China, the professor argued, needed to adopt a similar framework. It was a thought-provoking example; one of many during this two day event.

For instance Connie Lau, until recently head of the Hong Kong Consumer Council and now adviser to UNCTAD, spoke of the conflict between prudential regulation of financial services and consumer protection – a point picked up by Wuhan’s Professor Zhou who raised the failures of the Chinese regulators to stamp out malpractices.

In the same vain, Ying Yu of the Wuhan Centre pointed to the fact that China had as yet no bank deposit guarantee for consumers in operation, despite being under consideration for many years.

Both of these issues have been recently highlighted in CI’s work on the UN Guidelines for Consumer Protection (the focus of the Wuhan conference).   

Other interventions focused on the remarkable level of internet use in China. Wuhan University’s Professor Qisheng HE pointed out that there are 538 million web users in China – 210 million of which shop online, 187 million are online bank users.

These are staggering figures for a country that – like many others – has few viable avenues for consumers to seek redress in online commerce disputes. There were also revealing presentations on counterfeit consumption, sustainability, data security, as well as much on the UN Guidelines.

From the degree of understanding and analysis on display at the event, it’s clear that some in China have woken up to the need for higher standards of consumer protection – not just to reassure global markets about the quality of its exports, but also as a harbinger of growth in its own domestic consumer economy.

A point further emphasised by recent indications that the authorities are considering allowing China’s consumers to pursue class actions for the first time.

The Wuhan Centre is a milestone on a journey, not only as a means for China to explore international standards in consumer protection, but also for the rest of the world to understand the impact of consumer rights development in a country that boasts one-sixth of the world’s population. What happens here will, and does, affect us all.

Those clever minds in China looking at consumer protection already know the pressing issues at hand. As do most Chinese consumers: product safety, fake goods, sustainability, financial services, digital consumer rights and, above all, effective legislation and enforcement.

The Wuhan Centre, and, by acquiescence, China’s authorities know the benefits an international perspective can bring to this challenge: it is why both the state and China’s consumer rights experts are so keen to get involved in the revision of the UN Guidelines on Consumer Protection – something CI is uniquely placed to offer the Wuhan Centre, along with our other Members, Supporters, and partners in China and across the world.

By becoming a CI Supporter organisation we hope the rest of the global consumer rights movement can help the Wuhan Centre navigate a path of best practice as it seeks to elevate consumer justice and protection for China's 1.35 billion people.  

If you would like to find out more about becoming a Member or Supporter of CI, please visit the Join us section on the CI website.