Ci survey summary 2015 english

Summary

2014/15

State of Consumer Protection Survey

Introduction

Consumer protection plays a crucial role in building a fairer, safer world.

Consumers International (CI), the global federation of consumer organisations, set out to assess the state of consumer protection around the world through a global survey of its Member organisations.

Eighty consumer groups from across the world participated in this research, which covers a wide range of consumer protection issues.

For the purposes of the research CI’s Membership was segmented into four broad regions. The regions were: 33 Africa 33 A sia Pacific, Central Asia and the Middle East (APCAME) 33 E urope and North America (EurNA) 33 L atin America & the Caribbean (LA&C).

Two notable themes that emerged from this research were...

New legislation

Digital economy

New legislation is the factor most commonly thought to have delivered consumer protection advances in the last three years and there is an appetite for more: over a quarter of Members (26 per cent) pointed to new or revised legislation as being the single most useful action that could be taken to improve consumer protection in their country1.

As the digital economy grows and evolves, it poses a number of challenges for those working in the consumer interest. Some – like how best to ensure legislative, regulatory and standards frameworks are fit for purpose in an era where technology moves faster than the wheels of consumer protection processes can turn – emerge here, echoing the findings of CI’s 2013 survey3.

Yet at the same time, a clear majority of Members viewed existing legislation as ineffective in addressing the key causes of consumer detriment they had identified. That may of course be a spur for new legislation, but given 25 per cent of Members referred to instances where consumer protection exists on paper2, but not in practice, it may not be a panacea.

...Concerns that consumer protection mechanisms are being outmoded and outpaced by the speed of change in the digital ...Members’ differing economy. views on the need for and efficacy of consumer protection legislation...

Others, such as the need to establish respect for consumer data and privacy are well documented elsewhere. All of these challenges will demand ever more of the attention and time of CI and its Members in the coming years – not least as the internet becomes the platform on which every sector, from utilities to financial services, reorganises its affairs.

But as access to the digital economy and digital technologies becomes ubiquitous, new means and opportunities for delivering consumer protection become available. This research touches on Online Dispute Resolution, which is one of a number of ways in which electronically mediated channels can make it much easier for consumers to seek redress. CI’s new digital strategy4 highlights other opportunities for innovative approaches to consumer empowerment.

Key findings

Key advances in consumer protection since 2012 Members felt the top three advances they had witnessed since 20125 arose from:

40%

18%

18%

New legislation

Consumer representation

Regulation & enforcement

Increasing consumers’ awareness of their rights was also an important factor.

Key advances in consumer protection since 2012 by region 38%

Africa

26% 48%

LA&C APCAME

13%

40%

0%

10%

20%

14%

12%

40%

Globally

16%

19%

37%

EurNA

30%

Legislation Support / consumer groups Regulation & enforcement

40%

50%

60%

14% 70%

5% 4% 9%

12% 18%

6%

23% 15%

22% 18%

11%

19%

80%

8% 6% 3% 90%

100%

Increasing consumer awareness Economic / financial services development Technology & communications

Although new legislation was the most cited advance in consumer protection – 40 per cent of Members made reference to it – responses to other questions covering this topic revealed a more complex picture.

For example, while few Members (10 per cent) cited the lack of sufficiently robust legislation as a primary contributor to consumer

detriment in their countries, 66 per cent did judge existing legislation to be ineffective in addressing the issues they did cite. Perhaps unsurprisingly then, more Members (26 per cent) felt that, of the measures available, additional or revised legislation would be the single most useful action to increase effective consumer protection.

Reasons for those advances A high proportion of Members cited direct consumer demand (89 per cent) and political and/or regulatory intervention (86 per cent) as key drivers of the advances seen since 2012. While corporate behaviour (70 per cent) and market innovation (60 per cent) were also viewed as significant, divergent regional perspectives exist. For example, only a minority of Members in LA&C view corporate behaviour and market innovation as important factors.

Members who viewed direct consumer demand as key driver of advances since 2012

89%

Members who viewed political and/or regulatory intervention as key drivers of the advances since 2012

86%

Regulation and enforcement drives improvements With regards to measures used to improve the situation for consumers in their country, regulatory interventions were cited by 44 per cent of Members, making it by far the most commonly cited measure.

Again, there were notable regional variations: 53 per cent of APCAME Members made reference to it, compared to only 30 per cent of LA&C respondents. Where it had been used, two thirds (67 per cent) felt regulatory intervention had been quite or very effective in delivering improvement.

However, as with legislation a more complex picture also emerges on regulation – with the lack of regulation/enforcement being the second most cited contributor to consumer detriment (20 per cent of Members made reference to it).

Again, it’s perhaps unsurprising then that 25 per cent of Members chose the strengthening of regulation and enforcement as the single most useful action that could improve consumer protection in their countries.

Members who felt that the strengthening of regulation and enforcement is the most useful action that could improve consumer protection in their countries

Members who felt that where it had been used regulatory intervention had been quite or very effective in delivering improvement

25%

67%

Issues contributing to consumer detriment Members felt the three main factors that contribute to consumer detriment are:

27%

20%

15%

Economic & development challenges

Lack of regulation & enforcement

Poor quality products & services

Again, notable regional variations existed, with political instability and low awareness of rights having a markedly greater bearing on consumer detriment in Africa. Poor quality products and services were much more of an issue for APCAME Members (21 per cent) and much less of an issue for EurNA Members (9 per cent).

Issues contributing to consumer detriment by region 19%

Africa

15%

17%

30%

LA&C APCAME

21%

25%

0%

10%

20% 20%

30%

15% 40%

Economic / development challenges Lack of regulation / enforcement Poor quality products / services Underdevelopment of technology

50%

15% 14%

9%

11% 11%

60%

13%

13%

9%

21% 23%

27%

Globally

14%

12%

21%

34%

EurNA

7%

5% 6% 3% 9%

10% 70%

6% 3%

3% 5% 7%

80%

6% 4% 90%

Legislation not robust Consumers lack awareness of rights Political instability Other

100%

Members who feel enforcement of consumer protection is effective

Consumer protection by sector

Food 56%

Responses indicate the effectiveness of consumer protection enforcement differs according to sector.

Food is the only sector where a majority of Members (56 per cent) think enforcement is effective.

Enforcement is considered to be much less effective across the financial services, where only 39 per cent view it as effective, utilities (38 per cent) and digital (24 per cent) sectors.

Financial services 39% Utilities 38% Digital 24%

However, Africa again diverges from the global view, with a majority (53 per cent) thinking enforcement on food is ineffective; and the same number thinking financial services enforcement is effective.

Most useful action to further improve consumer protection Beyond additional or revised legislation and strengthened regulation and enforcement, Members chose forming and/or increasing the power and resources of independent consumer groups (25 per cent) and action to increase consumer awareness (19 per cent) as the other single most useful actions that could be taken to improve consumer protection.

Members who said the following is the most useful action to further improve consumer protection: additional or revised legislation

action to increase consumer awareness

forming and/or increasing the power and resources of independent consumer groups

strengthen regulation and enforcement

26%

25%

19%

15%

Consumer protection in the digital economy The survey recorded major increases in online transactions across all regions, with all Members reporting year-on-year growth. Members identify ease of use, choice, value and an increase in online accessibility as the key drivers of this growth.

However, the rapidly evolving digital economy is giving rise to significant concerns that consumer protection is being outmoded and outpaced.

33 8 0 per cent of Members judged legislation, regulation and standards relating to redress as ineffective at keeping up with developments in the digital economy.

33 5 2 per cent feel that redress obligations in their country never/rarely offer sufficient

protection when seeking redress from digital economy providers – attributing the lack of sufficient protection to the lack of appropriate legislation, low awareness, or the digital economy in the region being underdeveloped.

33 5 6 per cent state that online dispute resolution (ODR)6 is not offered by digital economy providers in their country and there is no legal obligation to do so.

In terms of mitigating their concerns on the digital economy, Members wanted to see better global and national regulation of ecommerce and improvements in consumer awareness.

Members who feel legislation, regulation and standards relating to redress are ineffective at keeping up with developments in the digital economy

80%

Members who feel that online dispute resolution is not offered by digital economy providers in their country and there is no legal obligation to do so

56% Do established redress mechanisms offer sufficient protection in the digital economy?

Most cases

Majority of cases

Minority of cases

Rarely

Never

0%

5%

Africa LA&C APCAME

10% EurNA Global

15%

20%

25%

30%

35%

40%

45%

50%

Background CI gathered the views of eighty of its Members on the state of consumer protection in their respective countries. Members from across all four CI regions participated in the research. CI would like to thank all participating Members for their time and for the valuable insights they have contributed.

The four objectives of this research were to:

1 2

Establish the top three advances in consumer protection since 2012; and to identify the factors driving those advances Identify challenges or barriers to consumer protection and the effectiveness of legislation and the relevant consumer protection institutions in addressing them

3

Examine the types of measures used to improve the situation for consumers and how effective each has been

4

Provide a distinct focus on ecommerce and issues relating to consumer protection in the digital economy.

The research was conducted between October and November 2014 and builds on the previous CI state of consumer protection survey that was carried out in 2012 (published 2013)7.

Consumers International 24 Highbury Crescent London N5 1RX United Kingdom T. +44 20 7226 6663 F. +44 20 7354 0607

consumersinternational.org Footnotes 1 In identifying the single most useful action that could be taken to increase consumer protection, it should be noted that similar numbers of Members pointed to forming / increasing the power or resources of independent consumer groups (25 per cent); and strengthening regulation and enforcement (also 25 per cent).

2 Referred to in the survey as ‘appropriate measures available, but no action taken.’ 3 See CI’s The State of Consumer Protection Around the World, p.13: www.consumersinternational.org/news-and-media/resource-zone/state-of-consumer-protection 4 See: www.consumersinternational.org/who-we-are/strategic-plan/ 5 Members answered the question on advances in consumer protection during the last three years with open- ended responses.

These were coded according to the key themes that emerged (such as new legislation) and analysed quantitatively.

6 An approach to dispute resolution that utilises technology to deliver convenient, accessible and effective redress to consumers.

7 See: www.consumersinternational.org/news-and-media/resource-zone/state-of-consumer-protection