Three recent posts here on ValueIreland.com have covered some extensive changes to consumer rights legislation announced by Minister for Jobs, Enterprise and Innovation, Mr. Richard Bruton, TD back in May 2015.
- Part 1 – Consumer Protection Legislation – some good but some pointless changes proposed
- Part 2 – Consumer Protection Legislation – gift voucher proposals not worth the effort
- Part 3 – Consumer Protection Legislation – proposed 30 Day Refund Period is good for consumers
As I’ve written about already, some of the proposals could be enormously positive for consumers, while some are simply populist nonsense and won’t really be of much benefit to consumers. The last topic from the proposals that I’ll cover in this blog post is referenced in the department press release above under the heading of “Information rights”.
GP Price Lists
In short, the proposals here will give consumers new rights to information prior to engaging in certain transactions, such as healthcare (e.g. GP services), social services, and gambling. The headline proposed change in this section is the requirement that price information for GPs and other medical consultations would be displayed clearly for consumers.
As I said in my original post, this can’t be argued with, though in a world where consumers should first and foremost be looking after their own interests, have we completely lost the ability to ask up front what the charges would be?
And while we’re all used to sometimes casually walking around a new town or city perusing the menus of restaurants prior deciding where to have dinner, I can’t really see that consumers in need of medical assistance would be acting in a similar fashion.
It is, however, within this section of the proposed legislation that I think is the biggest gap exists.
I’m sure most people are aware of the different newspaper adverts they might sometimes see indicating that particular service providers have changed certain terms and conditions of services they provide to consumers under contract.
So, a bank will indicate that they are now charging new interest rates, or a phone company is charging a new rate to make phone calls, send text messages or access the internet, or a TV company is changing their charges for their subscription packages.
These companies are obliged by law to provide notice to their customers when the terms of their contracts are changing.
However, in the world of information and communications in which we live today, this manner of notifying customers is hugely insufficient in two ways:
1. Very few customers see these notices
The first problem here is that such notices are not guaranteed to reach all of the customers who would be impacted by the change in contract conditions. This is particularly relevant given that the numbers of people reading newspapers is declining year after year, and given that these are adverts and not news articles, the information is not available via online newspaper editions.
Additionally, while the information may additionally be made available on the websites of the companies concerned, that would expect customers to regularly review the websites on the off-chance that something might change.
Only a cynic (eh, me!) would suggest that companies would actually prefer to keep this current mode of customer notification in place given the relatively small chance that customers would actually find out about the changes (unless it happens to be picked up as a news story as would happen in some cases), or wouldn’t find out about the changes in sufficient time to actually react.
2. Insufficient Information
The second problem I see with this method of information customers is that it doesn’t actually provide sufficient information to allow consumers do anything with the information provided in many cases.
The legislation requiring these notices be published in newspapers has been drafted and understood through implementation to mean that the companies impacted will only ever provide the NEW values – so, the new charges or the new interest rates.
Apart from on some rare occasions, there is no information provided in these notices as to what the value was previously, and what the actual change being made is, to allow the consumer decide whether they’re happy to accept the change or whether they want to take their business elsewhere.
So, for example, a bank announces that their interest rate – via such a newspaper article – is 0.1%. But what does that actually mean – and depending on the previous rate (e.g. either 0.2% or 0.05%) it could either be good or bad for the consumer.
There is simply not enough information to allow consumers decide what to do (as the VI slogan says, better purchasing decisions through better information).
What is needed?
The simple answer to the “insufficient information” issue is to require that these publicised notices will provide the consumer with a view of the “before” and “after” situation, and even, as is required in some financial services advertising, a specific explanation of the impact to the consumers. For example, “you will pay €60 more per year for your TV service”, or “for every €100 saved, you will earn €5 less interest per year”.
Notwithstanding those proposals, it is in addressing the first issue of not sufficient numbers of customers being actually informed of the changes that more needs to be done. Though, as the snippet here shows, some are better than others – though, even they could improve as proposed below.
It is most likely that all the organisations that we deal with today have our phone number, or our e-mail address. It is also quite likely that they have a comprehensive marketing platform in place, that assuming we let them, would pump out marketing blurb to us on a regular basis to try to get more and more of our business.
It should be required now that these notifications of changes in contract terms and conditions should be delivered directly to each consumer who is a customer of these organisations. This is something that could be easily done, and in the long run, as well as being better for the consumer would be more cost efficient for the organisations concerned.
In the event of price increases impacting people already within contracts, there is a 2 month period in which consumers can opt to exit their contract – this has to be facilitated by the service provider. This could be facilitated simply via a link in any communication sent out.
New Form of Communication
So, the communication to the customer could be, “We’re increasing our prices, and you’ll pay €60 extra now per year for your TV. You can click here to cancel your contract within 30 days.”
Obviously, businesses are unlikely to make it as simple for people to cancel their contracts unless such an onus is put on them (which it should). On the other hand however, with a bit of thought from those more proficient in marketing than me, such a communication – even if it’s communicating the bad news of a price increase – could even be used to try to sell even more to the consumer.
Instead then, the communication to the customer could be, “We’re increasing our prices, and you’ll pay €60 extra now per year for your TV. You can click here to cancel your contract within 30 days. Or click here to avail of 2 months free if you sign up for a new 18 month contract.”
The key, however, is that with these new information requirement proposals, all impacted consumers would be given the information they need, in an efficient and timely manner, to allow them assess the impact of any contract changes that might be subjected to.
Finally, my last post in this series will cover an issue that’s been bugging me for a while, with a suggestion for how the information communication proposals presented above should also be expanded into data protection legislation for the benefit of consumer protection.