Consumer requirements of regulators19.08.2020
Source: UK National Consumer Federation.
In the United Kingdom in 2018, the U.K. National Consumer Federation (2018) published the Consumer Charter for Regulators which is reproduced below. It summarizes a set of key points, which can be useful for high-level self-assessment, or more broadly for identifying areas for change within a country. The document was produced by three major consumer organizations in the United Kingdom – Consumer Focus, Which?, and the National Consumer Federation – in consultation with many smaller consumer organizations and interested individual consumers. A consumer congress dedicated to the topic was an important stage in developing the charter.
A major study in 2009 (Brooker and Taylor 2009), carried out by the consumer organization Consumer Focus, provided a detailed assessment framework to rate the performance of several U.K. regulators. A version of its summary tables is provided below. Regulators elsewhere could use it for assessment of their own and other regulators’ performance in relation to consumers, helping them to identify priorities for improvement.
Both initiatives were originated by consumer organizations with consumer benefit in mind. However, because the ideas of “consumer” and “citizen” largely overlap, in fact both have broader application to stakeholder relations, good management and good governance.
Consumer charter for regulators
The main purpose of regulation is to promote and protect the interests of consumers in sectors where market forces alone would not deliver the best outcome. An effective regulator will:
Put consumer interests at the heart of what regulators do through…
- A legal framework that includes a primary purpose to pursue the interests of current (and future) consumers;
- A vision and strategy backed by project management and other organizational processes in which the consumer interest is embedded;
- A Board with a lay Chair and a lay majority including consumer expertise;
- Culture and values that ensure consumer interests run through their behaviour and everyday ways of working.
Understand what a good outcome looks like for all consumers and deliver it, including…
- Access for all including disabled people and consumers in vulnerable positions;
- Clear, simple, accurate and understandable information about products and services;
- Fair marketing practices, where necessary curbing pressure selling and misleading advertising;
- Effective choice for consumers between providers competing to offer better products and services at a better price, with the ability to switch easily;
- Fair pricing and contracts with no hidden twists and tricks and no unfair cross subsidy;
- The consumer interest taken into account when deciding issues affecting infrastructure investment;
- Quality delivered to agreed or contracted standards and good quality outcomes which are responsive to consumer needs;
- Protection from harm so that products and services which cannot be used safely cannot be sold;
- Resolution of individual complaints quickly and fairly by regulated firms, and access for consumers to an Ombudsman or other independent mechanism for resolving disputes which is free to the consumer.
Be an alert watchdog and act swiftly on behalf of consumers by…
- Identifying risks, scanning the horizon using consumer insight and intervening early to prevent problems emerging and to spot when things are going wrong;
- Creating the right incentives for the market to work well for consumers;
- Ensuring that data is published to allow consumers to compare performance of providers, for example on complaints;
- Working closely with other regulators to maximize consistency of approach and share best practice including on enforcement;
- Involving consumers and their representatives, including consumer bodies through regular dialogue and research to understand consumer views and behaviour in the development of policy and in delivery;
- Ensuring compliance with licence conditions and other rules through investigations and effective enforcement backed by legal powers, imposing penalties on firms where rules have been breached and securing redress for consumers who have been adversely affected including compensation where appropriate;
Be transparent and accountable to consumers through…
- Working openly, consulting and reporting regularly on their performance in achieving consumer outcomes;
- Providing a readily accessible channel for feedback and complaints about the regulator;
- Using language that ordinary people can understand.
Consumer framework for assessing regulators
As mentioned above, an adapted summary table of the major study Rating Regulators (Brooker and Taylor 2009) is reproduced below. Regulators elsewhere could use it for assessment of their own and other regulators’ performance on stakeholder relations, helping them to identify priorities for improvement.
|Statutory objectives and duties enable the regulator to adequately promote the interests of all consumers
|Responsibilities between different actors are clearly defined, without gaps or overlaps
|Structures are sensitive to decentralisation
e.g. through offices or advisory committees
|The right tools for the job
|Culture and accountability
|Translates statutory objectives into consumer- focused priorities and values
|Embeds a consumer focus across all levels of the organisation
|Transparent about its activities
|Accessible to the general public, including disabled users
|State of readiness
|Identifies likely sources of consumer detriment, both now and in the future, which shapes work priorities
|Uses effective mechanisms to understand the consumer perspective and translate this into sound decisions
|Works effectively with others, including with consumer organisations
|Influences the wider regulatory agenda
|State of action
|Empowers consumers to help achieve regulatory outcomes
|Has effective incentives to encourage compliance with its rules
|Chooses the appropriate regulatory approach in the circumstances, and intervenes in a timely fashion when needed
|Gives priority to, and intervenes effectively on behalf of, consumers who are vulnerable
|Uses enforcement tools when necessary to protect consumers
|Impact and learning
|Defines and measures its impact on consumers in terms of outcomes
|Evaluates its work and embeds learning
Source: Brooker and Taylor 2009.
Brooker, Steve and Anne Taylor. 2009. Rating Regulators. London: Consumer Focus https://webarchive.nationalarchives.gov.uk/20100303162807/http://www.consumerfocus.org.uk/assets/1/files/2009/06/10708_CF_Rating_Regulators_web.pdf.
National Consumer Federation. 2018. Consumer Charter for Regulators. London. https://www.nationalconsumer.org.uk/wp-content/uploads/2018/02/Consumer-Charter-for-Regulators-.pdf.Last updated on: 19.01.2022