Wednesday, 23 April 2014

CI steps up campaign to improve financial consumer protection worldwide

CI, together with  our Members Which? and Consumer Reports, took the consumer voice to the G20/OECD Taskforce on financial consumer protection consultation event on 15 April, explains CI's financial services expert Nicola O'Reilly (pictured left with Norma Garcia of Consumer Reports).

This was the first event of its kind for the Taskforce which is good news for consumers as we had the opportunity to input into its work.

The occasion revealed new regulatory practices and emerging challenges in consumer protection. The subjects discussed were mobile and online payments, behavioural economics and Treating Customers Fairly (TCF).

Dominic Lindley of Which? provided an excellent presentations on TCF where he set out problems and solutions around sales incentives in financial services.

He also noted that the liabilities resulting from of misconduct such as misselling of payment protection insurance must be factored into risk and stability assessments. 

Norma Garcia of Consumer Reports (who has spent the past month based at the CI Office in London) made a really well received presentation on mobile payments.

Norma called for the uneven protections, and the privacy and security concerns relating to mobile payments, to be addressed to promote financial inclusion and improved consumer protection.

We commented on how behavioural approaches can be used to deliver effective consumer protection.

We welcomed the use of behavioural economics to gain insight into consumer behaviour – what moves and motivates consumers to act. It is a real step forward. 

We also noted that this should be built upon to deliver significant change by using behavioural approaches in a systematic way.

A one-size fits all approach is ineffective, but using segmentation to recognise distinct behavioural groups can support the development of a suite of interventions that can be used in combination to deliver effective consumer protection which benefits individuals and society.

Social marketing and behaviour change has been delivering benefits in public health for decades cutting road deaths and reducing hospital admissions, tackling addictions and reducing crime by taking a consumer-centred approach. It is great that this is being introduced into financial services too.

The day in Paris was a good opportunity to get our views heard in advance of the written consultation that the Taskforce will issue next month.

This will inform its final report to the G20 Finance ministers which will be delivered in June this year. This will be an ideal opportunity to push for further action on financial consumer protection.

We made the most of the trip to Paris where we met the Chair of FinCoNet who was very positive about increased engagement from CI in this area. We also met colleagues from UniFinance who we will be working with in our forthcoming work on sales incentives.

Tuesday, 15 April 2014

Trust is in flux and consumer groups must seize it back

CI Director General Amanda Long argues consumer activists must challenge the corporate occupation of trust in the digital age.

Who do you trust? This is a question that has popped up at part of the #ConsumerTrends questionnaire we launched earlier this week.

It’s an incredibly important question, as I believe consumer trust, consumer decision-making and consumer power are changing in profound ways.

If those interested in consumer rights, justice and protection are to remain relevant and immediate to the lives of the consumers we represent, we must meet them where they are and address the questions they seek answers to every single day.

Of course, many of the world’s most successful consumer groups have built their legitimacy and legacy on doing just that. Consumers International was founded in 1960 by five groups dedicated to testing products to help consumers make better everyday purchasing decisions.

But as consumer decision-making evolves in the digital age traditional consumer activists risk giving away relevance and legitimacy to others whom have already identified - and are acting upon - these trends.

In fact, the uncomfortable reality is that corporations are already starting to do this very successfully.

There are many respected international studies out there on brand meaning and consumer trust that are pointing to the same conclusion – that consumers are increasingly making purchasing-decisions based on values, not just value. That we want to make meaningful choices, not just functional ones. And that we are becoming mindful consumers, increasingly interested in the provenance and impact of the goods we buy.

Don’t get me wrong: in the first instance, issues of ‘access’ or ‘choice’ are key to consumer behaviour. Within this hierarchy ‘value’ and a ‘fair deal’ are still and will remain primary drivers for purchasing decisions and consumer behaviour.

That is not going to change quickly. But what we are certainly seeing a further angle emerging to consumer behaviour, as that concept of a ‘fair deal’ and ‘fairness’ expand and the issue of ‘impact’ comes into play.   

Why is this happening?  Because we are worrying about whether our children will have a better life than we have; we are concerned about the concentration of power within businesses and institutions; and are increasingly unconvinced that the society we live in is fair.

That's the compelling conclusion of John Gerzema, a marketing guru and social strategist who pioneers the use of data to identify social change and help companies adapt to new demands, following his recent survey of 64,000 people around the world.

Why does it matter? Because in the second decade of the 21st Century digital technology is allowing people to interact with unprecedented amounts of information – in real time, whilst on the move.

What is more, it's allowing them to provide feedback and get their voice heard: not just as individuals, but as collectives – the likes of which world has never seen.

And this is not just about liking a Facebook update or signing an online petition. It’s about common cause and collective actions: the power of crowds to change corporate practice, the reverse auctioning of city-wide utility prices and the collective purchasing of essential services.

The world’s biggest brands see this and fear the implications.

It’s why corporate reputation is so high on their agenda. They know that, in order to secure the loyalty and trust of tomorrow’s consumers they must do all they can to appear responsible, accountable, transparent and engaging.

They can no longer just sell products, they must sell values, and do it with empathy.

Our recent global survey of consumer protection found less than half the 60 countries polled have measures to encourage ethical or socially responsible behaviour from companies. Yet some leading brands are presenting themselves as doing it anyway.

Today, the global CSR database Corporate Register contains 55,000 corporate responsibility reports from 11,000 companies in over 160 countries. In 2008 there were around 3,000 – that’s an 18 fold increase in six years.

Why the exponential rise in concern about reputation? Because brands see that consumer trust is up for grabs.

At the moment, trust is in flux. This new territory is still in play and consumer activists must seize this opportunity to align our movement with a changing world.

This means embracing digital technologies as the main driver for consumer information exchange, engagement and mobilisation.

It means being more agile and vociferous in calling out brands when they abuse consumer rights. And it also means seeking appropriate ways to work with them directly to drive more responsible behaviours. 

Trans-global corporations, big successful businesses, are 10-15 years ahead of state and civil society in their thinking on these issues and have the bottomless resources to fund their planned occupation of consumer decision-making.

But consumers can be an army of collective voices – we can work together and win.

Developments in digital age technology will allow us to do it as this century takes shape, but make no mistake: those who believe in and stand up for consumer justice have a tough battle to keep hold of relevance and immediacy in people’s daily lives.

We must make sure we do not oversee a migration of trust away from truly impartial consumer champions. Consumer rights, not corporate rhetoric, should be the source of empowerment for tomorrow’s consumers.

This blog is an abridged version of the speech Amanda Long, delivered to the 40th anniversary symposium of the Hong Kong Consumer Council, 7 April 2014.

Monday, 31 March 2014

Will social media empower consumers or undermine our hard-won rights?

Social media allows consumers to instantly complain and get answers  - but do fears over personal data, trust and power cancel out the potential empowering benefits of the new digital landscape, asks Liz Coll of Citizens Advice. 

Last year, there were over 10 million complaints via social media, making up over a quarter of the 38 million complaints from British consumers in 2013.

That’s a large proportion, but is this just simply a channel shift, or does this say something more significant about changes in our behaviour and expectations as consumers in the digital age? 

Let’s consider the old way of doing things, when complaining meant a carefully-worded letter that probably never made it onto paper, let alone to the post box, or being held in a queue in an endless labyrinth of ‘customer support’.

The process for accessing redress and making a complaint was set and managed by the provider, including how you could complain, at what times and sometimes what about.

This required energy, commitment and willingness to battle through several bureaucratic lines. Acting alone, consumers experienced products, services and any related problems in isolation.

Compare this to what social media tools enable us to do now. You can either reach the company directly or let all of your followers know how you feel, linking in with others who might share your ire. You are no longer isolated.

It’s not just the speed or quality of the response (with some convinced of effectiveness and some sceptical) but that complaints and experiences can now be expressed on our terms, whenever we choose. They are open, visible and shared – no wonder it’s proving popular.

Context shift

But can instant responses to particular consumers’ particularly vocal complaints ever be a substitute for fair systems that safeguard consumers?

Social media complaining is just one example of how the widespread access to powerful, social technology has dramatically changed the context in which businesses deliver, people consume and governments regulate.

This is the subject of a new paper from Consumer Futures called Realising Consumer Rights: from JFK to the digital age.

Exploring six digital trends that characterise this new context, the paper explores the new ways in which consumer rights first set out by JFK in 1962 now have the potential to be realised, ways that might bypass or complement traditional channels.

But these trends have the potential to both empower and disempower. Issues around privacy, data, identity, trust, participation and power are central now to consumers in the digitally driven world.

Understanding and working productively in this complicated new terrain will be a critical task for everyone working in the consumer interest.

As Consumer Futures becomes part of Citizens Advice, we look forward to taking the discussion sparked by the paper further with regulators, policy makers and consumer advocates.

Tuesday, 11 March 2014

Five mobile rip off stories that will make you really mad

This year’s World Consumer Rights Day is about holding mobile companies to account amid the seemingly endless stories of consumers being ripped off, locked in and given the run around by companies with poor customer service.
CI Digital Editor Vik Iyer has searched the Internet and found some truly shocking mobile rip off stories – thus proving the urgency of the WCRD Fix Our Phone Rights! campaign.

One of our Slovenian Members, Zveza Potrošnikov Slovenije, has detailed how consumers can be tricked into joining ‘text clubs’ , which charge for receiving messages. In Ireland, a newspaper investigation found more than 10,000 people had been duped in similar scams, with one person tricked into owing 200 euros (278 USD).

Contracts are another source of complaint – with hidden charges and dodgy sales practices leaving consumers short changed by billions. Yes that’s right, billions. Journalists found evidence of consumers being sold products that did not suit their needs and hidden charges for calls to different networks.

Now usually when one spends £4,000 (6662 USD) on a holiday, it means luxury hotels and sumptuous cuisine. Thanks to rip-off roaming charges, you can pretty much do that just by telling people what you’re up to on Facebook.

Whilst roaming is perhaps a pretty well known way to be driven mad by your mobile company, there are a few other examples of atrocious customer service by the big Telcos. In Canada, campaigners attempted to collate some of these stories to highlight the issue of customer service.

One customer whose legs were crushed in an accident decided he had to cancel his mobile contract due to a lack of income – his provider refused. A mother tried to cancel a phone contract created by her vulnerable son – she was rebuffed too.

If that lot hasn’t scared or surprised you, then surely this will. People who sold their phones to pawn shops have unwittingly sold their data on too. Easy to access software programs can recover phone data even when it appears to have been wiped.

Ready to fight for change now? Remember you can add your voice to our Phone Rights campaign by tweeting or updating your Facebook using the hashtag #MyPhoneMakesMeMadBecause. Time to hold Big Mobile to account!

Wednesday, 26 February 2014

WCRD 2014: CI Member helping to protect consumers from Mali mobile rip offs

Coulibaly Salimata Diarra explains how CI Member, Mali-based ASCOMA, is combatting top-up card mobile phone promotions which leave consumers short changed  (view a French version of this article here). 

Since mobile telephony arrived in Mali in 2002, it has captivated all sectors of society. 

Covering the costs of mobile phone ownership has proven as crucial to Malian families as the price of every day staples, including food.This massive uptake has undoubtedly inspired Orange Mali and Malitel, the two operators in Mali, in their decision to run top-up card promotions.

For example,  they offer 100% or more bonus credit on Malitel or Orange Mali top-ups for a limited validity period, or valid only on their own network.

The two mobile telephony operators can then rub their hands, having maximised their profit in a short space of time, while the customer very rarely actually consumes the allocated bonus credit.

These promotions tend to entail: 
  • problems accessing either of the two networks
  • credit lost through attempted calls,
  • and stress and the frustration of losing money without being able to reach and communicate with the person you are calling. 
This practice is manifestly unfair and may even, in many respects, amount to irrefutable abuse by the operators.

This is why the Consumers' Association of Mali (ASCOMA), with the support of Consumers International (CI), has launched this project with the aim of confirming these findings of abuse in top-up card promotional campaigns for targeted periods.

At ASCOMA, we strive to take action and make recommendations for tackling these abuses confirmed by the findings of the investigation/research under way in Mali.

At this stage of the investigation, our two operators have already been seen to exercise a degree of restraint. They refrained from running promotions during the Christmas holiday period.

For New Year 2014, Malitel awarded 100% unlimited bonus credit for 48 hours, while Orange offered 14 hours of calls on its network.

This encourages us to persevere, to achieve a balance where mobile users can make the most of top-up card promotions without encountering problems.

We believe that the benefits of the growth in mobile phone usage should be shared reciprocally.

The two operators must cease these practices and put customer satisfaction and respect at the top of their concerns.

The aims of our approach and actions are as follows:
  • To establish a formal framework for dialogue between operators and consumer organisations
  • To end the mandatory consumption of bonus credit obtained on top-up cards during holiday periods
  • To enjoy bonuses without restriction, or simply apply a tariff reduction
  • To encourage the relevant authorities to intervene as sector regulator
  • To uphold and promote the rights and interests of the consumer/customer

With CI and ASCOMA there is hope. Accountability is established - the fight for our rights continues!

Monday, 24 February 2014

WCRD 2014: Mobile complaints surging in Singapore

Amy Ang,  Deputy Head (Legal) of Consumers Association of Singapore, reports on the growing numbers of complaints among mobile consumers as we approach the phone rights themed World Consumer Rights Day 2014.  

In 2013, mobile phone complaints rose by 52% (putting it in the top four for consumer complaints in Singapore) with a total of 1909 complaints.

Meanwhile complaints relating to phone rights with the telecommunication service providers reached 1511, an increase of 5.3% from 2012.

The most common complaints are misleading or false claims made by businesses while selling mobile handsets.

Consumer rights over defective mobile handsets have been improved by recent legislation – the ‘Lemon Law’ was passed in Singapore in 2012, which advanced the claims of the consumer against defective goods of all kinds and also goods that do not conform to contract.

Another common complaint is misrepresentation by the retailer  - such as false claims made by retailers about unlocking services, which are not needed to activate the phone.

In Singapore, for locally-approved handsets, there is usually no need for any unlocking activity to be carried out.

Often, misrepresentation takes place when the consumer is misled to pay for warranty on the mobile phone handset based on a false calculation of the warranty. 

Telecommunication complaints 

With respect to telecommunication complaints, the most common is on unsatisfactory services provided by the telcos. They could range from connectivity problems to installation of gadgets that were not done to the satisfaction of the consumer.

Many consumers were also unsure of the terms and conditions of the telco contracts which they have signed on, which could include billing items.

For example, cases of exorbitant overseas roaming charges incurred by the consumer when the consumer was overseas, are often disputed between the two parties.

There have been cases where the consumer, and/or their children, were misled into participating in some seemingly innocent pop-up games or puzzles in their mobile phone or tablet.

The fact that to respond and participate in these pop-ups was chargeable, was not made clear. This of course meant a nasty surprise in consumers’ bills.

CASE will hold a full-day carnival on World Consumer Rights Day to promote consumer awareness in Singapore on their rights in the digital age.

Wednesday, 19 February 2014

A tool for better relations between consumers and banks launched by CI

CI consumer protection expert Antonino Serra Cambaceres explains how a new project is aiming to improve banking for consumers.

On February 6, Buenos Aires provided the backdrop for the official launch of the Self Assessment Guide for Banks.

CI’s Latin American Office and Fundación Avina Argentina developed the guide - a tool for banks to evaluate themselves from a consumer perspective and assess how they are implementing their internal policies.

It is designed to help banks identify both policies that are working well and those that need changing, updating or a different approach.

During the launch at the headquarters of the Argentine Institute for Normalisation and Certification (IRAM), Juan Trímboli, CI Director for Latin America and the Caribbean, addressed the audience of consumer associations, banks, regulators and experts.

He highlighted the importance of financial services in CI’s work, and, in particular, in the Latin American Region since 2007.

Pablo Vagliente, National Representative of Avina Argentina, spoke about the work they are doing on ethical and responsible finances and the strong relationship that they have with CI in this field.

The launch marked the culmination of an 18-month partnership with Fundación Avina Argentina to develop the guide.

The next step will be to use it to influence financial institutions so that their policies meet consumers' needs, ensuring a respect for their rights and putting in place practices that are aligned with ethics and transparency in business conduct and financial education for consumers.

As we take forward our work on the guide, we will focus on promoting the tool with banks so that they can apply it and develop better relationships with consumers and the market.

The guide was developed with excellent support from an expert group including CI Members ADELCO and Unión de Consumidores de Argentina, IRAM and  Profaess - an NGO that works on ethical finances.

They helped us to develop a high-quality product with their knowledge and expertise. The development phase included interviews with: banks, banks’ associations, academics and financial experts; global research on benchmarking and best practice in banking and other related areas; and standards in management and policy.

The most important phase of the Banking Self Assessment Guide has begun - to have banks take the self assessment.

We hope that in a short time we will be able to report the first results of this interesting experience that will facilitate a better relationship between banks and consumers.

The guide is available on CI’s Spanish website.