Regulatory Models for Consumer Bodies: A Report for the Consumer Council for Northern Ireland

Prepared by David Stubbs

December 2013

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TABLE OF CONTENTS

EXECUTIVE SUMMARY...... 4

1 INTRODUCTION AND BACKGROUND ...... 6 About the Consumer Council for Northern Ireland (CCNI)...... 6 About David Stubbs ...... 6 Background to this report ...... 6 The scope of this analysis ...... 7 General approach to this study ...... 7 Method ...... 7 The structure of this report ...... 7

2 THE ANALYTICAL FRAMEWORK FOR THIS REPORT ...... 9 Introduction ...... 9 The approach to assessing regulatory models ...... 9 The interaction between competition and consumer interests ...... 9 Consumer interests and economic regulation ...... 10 The role of complaints handling and consumer campaigns ...... 10

3 FINDINGS OF DESK RESEARCH AND INTERVIEWS ...... 12 Introduction ...... 12 The role of national consumer bodies within the EU model of regulation ...... 12  Regional or local consumer bodies ...... 12 The role of consumer bodies at European level...... 12 International models of regulation ...... 13 Consumer representation in the UK ...... 14  Ministries responsible for consumer affairs ...... 14  Other Public agencies ...... 14  UK Consumer bodies ...... 14  Complaint boards ...... 15  Self-regulation bodies ...... 15  Enforcement/redress bodies ...... 15  The Ombudsman Service...... 15 Consumer representation in the Republic of Ireland ...... 16  The National Consumer Agency...... 16  Economic regulation and the All-Island project...... 16 Consumer arrangements in Northern Ireland ...... 17  A unique framework ...... 17  Economic geography ...... 17  Energy markets ...... 17  Economic regulation of energy markets ...... 17  The role of CCNI ...... 177 Key areas for potential consumer detriment for Northern Ireland ...... 18  Institutional and civic arrangements ...... 18  Infrastructure patterns and population distribution ...... 18  Market size and competition ...... 188 The effectiveness of current arrangements ...... 19

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 Effectiveness of consumer engagement procedures ...... 19  Effectiveness of information actions ...... 19  Effectiveness of complaints handling processes ...... 20  Effectiveness of representation in policy areas ...... 21  Effectiveness of consumer campaigns ...... 21

4 THE COSTS AND BENEFITS OF CURRENT ARRANGEMENTS ...... 23 Introduction ...... 23 Approach ...... 23 Costs of CCNI for energy and water sectors ...... 23 The proportionality of these costs……………………………………………………………24

Benefits of CCNI ...... 24  Savings for consumers achieved through the policy process ...... 24  Energy and water price controls and saving for consumers ...... 25  Improvements to the process of competition ...... 27 Broader economic effects ...... 27  Input output calculation for electricity, gas and water sectors ...... 27  Key assumptions in the analysis ...... 28  Findings from this cost benefit analysis ...... 29 The costs and benefits of alternative options ...... 29  Setting up a new consumer body outside government ...... 29  Merge consumer representation into a non-government advice body ...... 30 The experience of new arrangements in GB ...... 30

5 CONCLUSIONS ...... 32 Introduction ...... 32 Main conclusions ...... 32

ANNEX ONE: COMPARATIVE CONSUMER ARRANGEMENTS ...... 34 Introduction ...... 34 European Consumer bodies ...... 34  Denmark ...... 34  France ...... 35  Germany ...... 38  Italy ...... 40  The Netherlands ...... 41  Portugal ...... 43  Sweden ...... 45 b) International consumer arrangements ...... 46  United States of America ...... 46  Australia ...... 51  New Zealand ...... 54

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EXECUTIVE SUMMARY

This report has been commissioned by the Consumer Council for Northern Ireland (CCNI) and has been written by David Stubbs, an expert in consumer policy and utility regulation.

Whilst the report was commissioned back in January 2013 it is being submitted at a moment when the Department of Enterprise, Trade and Investment (DETI) is considering whether to continue with the existing model of consumer representation, to set up a new consumer body outside government or to move to transfer existing consumer representation functions to a non-governmental advice body.

This report considers comparative economic regulatory models for consumer representation and provides a financial review of existing arrangements considering their apparent discrete costs and benefits, the economic value which effective consumer representation can foster in energy and water sectors and the potential impact of alternative arrangements. The report’s findings are based upon desk research, discussions with stakeholders and experts in Northern Ireland and quantitative analysis using materials provided by CCNI and the Office of National Statistics (ONS) input output tables.

Key findings

Current arrangements in Northern Ireland are consistent with best practice compared to other regulatory models and are conferring significant economic benefits for Northern Ireland consumers.

In general consumers are best served by an independent consumer body, whose only remit is to pursue consumer interest rather than to find a broader public interest. Such a body can prove an essential counter-balance in the policy decision-making process to representations from vested interests.

Discussions with stakeholders suggest that CCNI represents consumers effectively, for example in relation to complaints handling and advice for individual consumers and that it makes a significant and important contribution to the regulatory decision-making process which confers significant savings on Northern Ireland consumers.

CCNI also improves the effectiveness of competition in markets, for example, by promoting switching and, through its actions in relation to utility Price Controls and the promotion of competition. This can be seen to foster a downward pressure on energy and water prices which by itself is estimated to have increased Northern Ireland GDP by £18m in a one year period.

It can be estimated that the recent electricity Price Control discussions will bring an estimated saving of £20 per year to each domestic customer, or a gross saving of £15.63m each year of

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the five year Price Control to the domestic customer base compared to Northern Ireland Electricity’s initial proposals. 1

Through its consistent promotion on ‘Switching’ CCNI has made a significant contribution to consumers’ savings on their energy bills. Overall the total number of domestic customers switching electricity supplier was 103,177 in 20122 with an average saving per customer of £553 and a total saving for Northern Ireland domestic electricity customers of £5,647,735. The total number of domestic customers switching natural gas supplier in 2012 was 18,7004, with an average saving per customer of £43, and a total saving of £804,100.

Given the savings which can be demonstrated from recent price control discussions where CCNI has played an active role in representing consumers, and given its wider role in improving consumer awareness and handling complaints, it is reasonable to assume that CCNI has at least had a downward impact of the magnitude of 5% on prices.

CCNI makes this important contribution at a fairly low cost at just over £1 per household (for its work on energy and water sectors).

If alternative arrangements were put in place then these benefits could be lost, not only due to the period of delay and potential confusion which may result, but also from a dilution of the effectiveness of the policy contribution by CCNI which is at the heart of its current contribution to the Northern Ireland economy. The economy in Northern Ireland is unusual within the UK, particularly in the high level of the population living in rural areas. Further, the economic infrastructure is somewhat different than in GB with a greater reliance on heating oil and with areas not connected to the gas pipeline. It is unique also in sharing a land border with another EU Member State.

Recent experience in GB, where alternatives such as those proposed by DETI in its consultation have been put in place, suggests that difficulties have already intensified in ensuring adequate representation of consumers, leading already, for example, to significant political intervention in the energy sectors and (it can be argued) a process which has led to the undervaluation of Royal Mail.

In light of this experience there are dangers that, if DETI implements similar proposals it will be moving from a system of consumer representation that works well to one that so far at least appears flawed.

1 Competition Commission Provisional Determination 2 Utility Regulator Energy Retail Report 2013 3 Consumer Council figure based on average savings between different payment types and different suppliers on 2013 tariff rates 4 Utility Regulator Energy Retail Report 2013

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1 INTRODUCTION AND BACKGROUND

This report has been commissioned by the Consumer Council for Northern Ireland. It has been written by David Stubbs, a UK regulator expert in consumer issues.

About the Consumer Council for Northern Ireland (CCNI)

The Consumer Council for Northern Ireland (CCNI) is an independent consumer organisation, set up in legislation to safeguard the interests of consumers, particularly the vulnerable and disadvantaged. CCNI represents consumers in the areas of transport, water and energy. It also educates consumers on their rights and responsibilities and aims to empower them with the skills they need to make informed decisions and manage their money wisely.

About David Stubbs

David Stubbs is an established expert in economic, regulatory and consumer issues. He has senior experience as a civil servant, as an economic regulator and in working at the European Commission. As a consultant he has advised public and private sector bodies on developments in energy and water sectors including the European Commission, the National Audit Office, BT and Consumer Focus.

Background to this report

In 2012, the Consumer Council for Northern Ireland (CCNI) embarked on a two year project relating to the energy and water sectors that are subject to economic regulation within which CCNI has a statutory responsibility to represent consumers’ interests. The project aimed to compare arrangements for consumer representation in Northern Ireland with comparable European and international arrangements in order to consider models of best practice.

However, during the research phase of the project, the Department of Enterprise, Trade and Investment (DETI) announced that it was undertaking its own review of arrangements and launched a consultation on options for future arrangements.5 It proposed three main options:

– continuation of the current CCNI model of a non-departmental public body to represent the consumer;

– the establishment of an independent consumer representative body outside government; and

5 Department of Enterprise, Trade and Investment. “Future Arrangements for Consumer Arrangements in Northern Ireland. Consultation. October 2013 ”

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– transfer of the consumer representation role, including the regulated industries role, to an existing non-government advice body.

The scope of this analysis

The Consumer Council asked David Stubbs to provide an assessment of how various models of economic regulation support consumer engagement; to ensure that consumers’ needs influence the regulatory process and that outcomes are based on consumer priorities. Following the DETI Review, CCNI has also asked that this report consider briefly the likely costs and benefits of current arrangements and their broader economic effects.

General approach to this study

The approach to undertaking this study has been to evaluate the representation of consumers in Northern Ireland on the basis of sound economic regulatory principles, on the evidence of best practice in other countries and through an economic assessment of the costs and benefits of current representation.

Method

The methodology used to undertake this project has been as follows:

1. To set out briefly the analytical framework for this assessment;

2. To undertake desk research of regulatory models for consumer engagement in Northern Ireland, GB and comparative EU and international states;

3. To undertake interviews with stakeholders and experts in Northern Ireland and GB;

4. To consider the economic costs and benefits of current arrangements and their broader economic effects; and

5. Based on these findings, to provide conclusions and recommendations.

The structure of this report

Following this section the structure of this report will be as follows:

– Section Two: Analytical framework, setting out the context of the analysis and its metrics;

– Section Three: Findings of desk research in relation to European and international regulatory models and interviews;

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– Section Four: Consideration of the costs and benefits of the current regulatory model for Northern Ireland and of other possible models;

– Section Five: Conclusions and recommendations.

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2 THE ANALYTICAL FRAMEWORK FOR THIS REPORT

Introduction

This section considers the analytical framework for assessing the relative effectiveness of regulatory models of consumer engagement in respect of Northern Ireland (NI).

The approach to assessing regulatory models

Consideration of different regulatory models of consumer engagement and representation in the regulatory process raises the following questions:

– Which models of consumer engagement appear to be most effective?

– Which models of broader economic regulation and policy making appear to best protect and represent consumer interests and thereby confer broader economic benefits?

– Which models of interaction between consumer groups and regulatory and policy making bodies appear to best protect and represent consumer interests?

In considering these questions it is important to understand not only whether consumers are engaged in the process but also how far they need to be represented as a distinct grouping within broader regulatory and policy processes. Further, it is also important to consider these questions within the context of the possible effects of such engagement on the wider economy and, in light of this, their proportionality and costs and benefits.

The interaction between competition and consumer interests

In general, economic theory suggests that consumer (and customer) interests are best served by effective competition (which is normally defined as a healthy rivalry of firms).

Consumers should benefit from lower prices or from price reductions to big customers (who will then largely pass such savings on to consumers). They will also benefit from greater choice and efficiency and innovation in service provision. The power to switch away from a provider that does not meet your needs is a very effective means of consumer empowerment.

In light of this, it can be argued that effective consumer representation should normally involve promotion of competition in markets. Of course there are possible market failures in provision of services of general economic interest and the pursuit of consumer interests for these services should also involve ensuring that all consumers and vulnerable consumers in particular are protected.

Consumer interests are also likely to be best served by promotion of measures which can make competition more effective. This can involve promotion of better price transparency in the market, better rules against miss-selling or manipulation of consumer confusion and

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of measures to promote a level playing field between providers. Effective consumer engagement in these areas can identify issues arising (not least via complaints from consumers) and allow for consumer involvement in remedial action.

However, it is also important to understand that markets work best through the action of customers and consumers. Where suppliers fail consumers it is sometimes best simply to let them be punished by consumer switching. The wrong type of regulatory intervention at this stage can distort the market and work over time to disadvantage consumers.

Further, there are also arguments that regulatory frameworks to promote competition in energy and water markets, by themselves, have proved unreliable in setting sufficient incentives to secure investment for long term security of supply and to take into full account the impact of environmental externalities and requirements for high quality supply of energy and water. It has been difficult to promote competition in utility markets generally and (as discussed later) the relatively small scale and specificity of the Northern Ireland water and energy markets may compound these difficulties. The importance of coordinating arrangements with the Republic of Ireland creates questions of whether competition can be effective or competitive markets can foster sufficient investment in the sectors.

Consumer interests and economic regulation

In understanding the relationship between consumer interests and economic regulation this analysis starts from the assumption that firm economic regulatory approaches in relation to the promotion of competition and the pursuit of ex ante regulation of dominant suppliers are in the interests of consumers. Consumers will benefit from lower prices even if those prices are reduced primarily for business customers as these will themselves largely pass on their savings in lower prices for consumers. Further, inefficient provision or a lack of innovation in service supply can impose significant costs on consumers, costs which vulnerable consumers can ill afford and over time could threaten the financial viability of affordable service provision. Typically, in light of this, until recently consumer bodies in GB have often aligned themselves closely with firm economic regulatory approaches and on occasion have sought to have a role in economic regulatory decisions and an oversight of detailed regulatory information.

In the case of large scale infrastructure investment, where consumers may directly through utility bills (or as taxpayers) fund large scale programmes it could be argued that consumer bodies also need to be involved in such decision-making processes and have access to technical issues such as cost of capital assessments to ensure that consumer interests are specifically represented in these debates.

The role of complaints handling and consumer campaigns

Consumer bodies also have an important role in “getting under the skin” of consumers’ concerns and expressing these in the policy making process. In this context consumer complaints can prove a useful barometer of specific consumer detriment that is not being

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In this respect, consumer bodies can provide a vital function in processing complaints and representing consumers, and vulnerable consumers in particular in relation to serious complaints. This can help offset power imbalances between consumers and suppliers, make competition more effective both by increasing market and service transparency and through improvements in the transmission of information between consumers and suppliers.

Where competition is effective however it is important that customers are allowed to exercise their choice (and complaint) through switching, and that complaints are not relied upon as a proxy for customer choice. Consumers in general are best protected through an ability to make an informed choice of providers. In this respect it is important that the process of competition is allowed to take effect; for example in that some consumers may wish to choose a cheaper, lower quality service and others pay a premium for a higher quality service and that inappropriate regulatory intervention does not pre-empt this choice.

However, more vulnerable consumers may suffer lower quality services or pay higher prices unless regulatory intervention (including that by consumer bodies) is made to protect them. In some cases this intervention may take place to provide them with a better ability to exercise choice in the market, in others it may be to ensure that they can continue to access provision of affordable essential services. Vulnerable consumers will always need protection even if perfect competition is in operation. Finally, intervention may take place to ensure direct changes in service provision as a result of complaints for example.

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3 FINDINGS OF DESK RESEARCH AND INTERVIEWS

Introduction

This section considers the evidence collected through desk research and interviews.

Detailed research in relation to the presence and roles of selected consumer bodies in the UK, EU and internationally is attached as Annex One. Interviews were conducted in confidence.

The role of national consumer bodies within the EU model of regulation

The analysis of consumer organisations shows that whatever the regulatory model for each of these countries, there is a multiplicity of consumer organisations, with an official public body representing consumers accompanied by single issue consumer bodies and private bodies.

The official consumer organisations all fulfil many of the roles undertaken by CCNI. These include:

– Complaints handling;

– Consumer engagement activities including market research and consultation activities;

– Campaigns.

For the larger countries it can also be seen that there is a significant history and culture of consumer representation, with sometimes a wide network of consumer bodies interacting with different areas of government on single issues, or on sector issues. These organisations are sometimes focussed on key areas of potential consumer detriment and can provide a useful part of the discussion about policies in these areas.

Regional or local consumer bodies

It can also be seen that in countries with a significant tradition of regional or local government, then consumer bodies are often present at regional or local level. These bodies can represent consumers in the regional or local government debates and can be close to the interests of their regional or local consumers.

To some extent this model is similar to that in the UK when Consumer Focus represented UK consumers and had an office in Northern Ireland (for post only), Wales and Scotland.

The role of consumer bodies at European level

The European Consumer Centre (ECC) offers help in every Member State to consumers with cross-border problems. It is funded principally by the European Commission (EC) and the Italian Ministry of Economic Development.

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European consumer organisations are federations of national consumer organisations from the EU. They make the voice of the European consumer heard and try to influence the development of EU policy, promoting and defending the interests of all European consumers.

At present, two European organisations are eligible for receiving Community funding to help them to carry out their activities: ANEC and BEUC.

First, there is the European Association for the Coordination of Consumer Representation in Standardisation (ANEC). ANEC is the European consumer voice in standardisation, representing and defending consumer interests in the process of standardisation and certification, also in policy and legislation related to standardisation.

Secondly, the European Consumers’ Organisation or Bureau Européen des Unions des Consommateurs (BEUC) has a membership of 42 well respected, independent national consumer organisations from 31 European countries (EU, EEA and applicant countries). BEUC acts as the umbrella group in Brussels for these organisations and its main task is to represent members and defend the interests of all Europe’s consumers.

Other organisations working on the promotion of consumer interests are:

– Confédération des Organisations familiales de la Communauté Européenne (COFACE)

– Communauté Européenne des Coopératives (Euro Coop) – European Community of Consumer Coopératives

International models of regulation

In general the EU model of regulation tends to have quite specific features which are not completely mirrored internationally. In this respect the EU internal market (as a region under wide trade liberalisation agreements such as GATS and GATT) cannot be considered identical to either US regulatory arrangements or those in other countries such as Australia and New Zealand.

In light of this, whilst it is not useful to recommend that Northern Ireland should adopt another regulatory model, or to trawl through these models in detail, it is relevant for the purposes of this study to consider aspects of regulatory models in these countries which may provide examples of best practice.

However, a review of arrangements in the US, Australia and New Zealand (also contained in Annex One) suggests that for each of these countries independent consumer representation is considered to be an important part of the policy process.

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Consumer representation in the UK

Ministries responsible for consumer affairs

The Ministry responsible for UK and EU consumer policy and consumer protection is the Department for Business, Innovation and Skills (BIS). Although BIS holds general responsibility for consumer protection, it shares responsibility for some elements of protection (of the general public) with other Ministries for example:

– Department of Health

– Her Majesty’s Treasury

– Department for Transport

– Department for Culture, Media and Sport (DCMS)

– Ministry of Justice.

Other public agencies

The Office of Fair Trading (OFT) is the UK’s consumer and competition authority. Tasks include the encouragement of business to comply with competition and consumer law; the study of markets and recommendation of action where required; and empowerment consumers with knowledge and skills to make informed choices and get the best value from markets.

The Food Standards Agency (FSA) is an independent Government department, sponsored by the Department of Health and set up to protect the public’s health and consumer interests in relation to food.

The Health and Safety Executive (HSE) is responsible for health and safety regulation in GB. It is active in the fields of nuclear installations and mines, factories, farms, hospitals and schools, offshore gas and oil installations, and is sponsored by the Department for Work and Pensions.

UK consumer bodies

Which? campaigns to get a fairer deal for all consumers and publishes expert, unbiased information to help consumers make the right choice across all sectors. It has 700,000 members in the UK and is the largest consumer organisation in Europe.

Other consumer bodies include the National Consumer Federation (NCF). Its main aim is to educate and inform consumers for the public benefit.

The UK also has numerous national councils or assemblies of consumer organisations, such as the Consumer Council for Water, the Financial Services Consumer Panel, Passenger Focus and Citizens Advice.

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Until recently Consumer Focus, including Consumer Focus Scotland and Consumer Focus Wales were the main consumer representative bodies in GB. However, these organisations are now the Citizen’s Advice Bureau in the UK and a separate strategic organisation known as Consumer Focus Futures has been set up.

The Consumer Council for Water represents consumers of water in England and Wales and Consumer Focus represents consumers of water in Scotland. The Consumer Council for Water (CCWater) is a non-departmental public body that represents water and sewerage consumers in England and Wales. The organization provides impartial advice and/or advocacy for aggrieved consumers.

Complaint boards

Criminal prosecutions can be brought to either Magistrates Courts or to the Crown Court. Consumers are entitled to seek civil redress in a County Court (Sheriff Court in Scotland).

Self-regulation bodies

The Advertising Standards Authority (ASA) is the independent body set up by the advertising industry to police the rules laid down in the advertising codes to protect consumers’ interests. Also, self-regulation makes up an important part of OFT’s toolkit in making markets work well for consumers. Its Consumer Codes Approval Scheme aims to promote and safeguard consumers’ interests by helping them to identify high-quality traders. There are various other organisations, including the Local Authority Assured Trader Schemes Network or Trustmark Ltd.

Enforcement/redress bodies

The Local Authority Trading Standards Services protect consumers and honest traders by ensuring that trade is carried out lawfully, fairly and safely. Under Part 8 of the Enterprise Act, the Office of Fair Trading, Trading Standards Authorities, sector regulators and other designated enforcement bodies can apply to the courts to stop traders infringing a wide range of consumer protection legislation which harm the collective interests of consumers.

The Ombudsman Service

The Ombudsman Service is a not-for-profit organization, which provides dispute resolution for the communications, energy, property and copyright licensing industries.

Founded in 2002 it provides an independent, impartial and cost effective means of resolving disputes outside the courts, provides independent dispute resolution and has approved independent status. Since 2003 it has successfully resolved about 65,000 complaints. Last year it resolved over 18,000 complaints.

The Ombudsman Service charges a case fee to consider a complaint – its payment is not dependent on outcome. This means that the more complaints companies resolve in- house, the less the companies pay; this provides an incentive for them to improve their customer service.

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Consumer representation in the Republic of Ireland

The National Consumer Agency

The National Consumer Agency (NCA) is a statutory body established by the Irish Government in May 2007 to enforce consumer law and promote consumer rights.

It represents the voice of the consumer, defending consumer interests at the highest levels of national and local decision-making. It also provides consumers with information about consumer rights and personal finance. It has responsibility for market surveillance in respect of the safety of a wide range of non-food consumer products.

The main aims of the NCA are to:

 Inform consumers of their rights through consumer information;

 Promote a strong consumer culture in Ireland through consumer education and awareness;

 Help businesses obey consumer law through enforcement activities;

 Represent consumer interests at all levels of local and national consumer policy development through targeted research and forceful advocacy; and

 Conduct investigations under a wide range of consumer protection legislation.

Its strategic aims are as follows:

– Empower consumers in Ireland to demand value for money and high standards of service, to challenge inappropriate commercial practices and to assert their statutory rights;

– Continue and refine the important task of enforcing consumer legislation previously administered by the Office of the Director of Consumer Affairs;

– Establish constructive dialogue on relevant issues with regulators, relevant government departments, business and representative organisations; and

– Use research and advocacy to influence the development of public policy measures that affect consumers' lives.

Economic regulation and the All-Island project

The Commission for Energy Regulation (CER) is the energy regulator for the Republic of Ireland and promotes competition in the electricity and natural gas sectors. It also protects the interests of customers, especially the disadvantaged and the elderly, by ensuring that standards of services are set and codes of practices are in place.

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CER licences electricity and natural gas companies and sets and enforces performance standards. It aims to ensure that the supply of natural gas and electricity to customers is safe, secure and reliable.

Consumer arrangements in Northern Ireland

A unique framework

Northern Ireland utility markets are set within a unique framework, with nearly seven hundred thousand consumers broadly within the UK regulatory framework but apart from GB markets, and attached to markets in the Republic of Ireland (ROI) but outside ROI’s regulatory framework. In this context the common membership of the EU of the UK and ROI is fostering a convergence of regulatory approaches between Northern Ireland and the ROI. In this respect it can be argued that it is important for Northern Ireland to have a single consumer body which can interact with its counterpart organisations in the ROI. This is a unique and challenging position to be in compared to the other UK countries.

Economic geography

The economy in Northern Ireland is unusual within the UK, particularly in the high level of the population living in rural areas. Further, the economic infrastructure is different than in GB with large areas not connected to the gas pipeline and energy consumption more oil based.

Energy markets

Electricity and gas markets have therefore developed in a different fashion to the rest of the UK. The home heating oil industry remains the largest supplier of energy to domestic households in Northern Ireland.

Economic regulation of energy markets

The Utility Regulator in Northern Ireland (the Regulator) regulates wholesale energy and water prices through ex ante price controls. It is charged with acting in the interests of consumers. Retail electricity and gas markets are open to competition with a range of gas and electricity competitors establishing themselves. Domestic consumers do not pay directly for their water consumption with costs of water being met through general taxation and a general levy on consumers and large users. There is no competition within the Northern Ireland water market with provision of services undertaken by Northern Ireland Water.

The role of CCNI

The Consumer Council is a statutory body funded by DETI and whose aims are to promote and safeguard the interests of all consumers in Northern Ireland. It campaigns for best possible standards of service and protection; it undertakes research and data

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collection; and it gives advice, information and issues publications in relation to financial issues (including banking), passenger transport, water and sewerage, and energy.

It deals with individual complaints about passenger transport, coal, water and sewerage, natural gas and electricity.

Under both The Energy (Northern Ireland) Order 2003 and The Water and Sewerage Services (Northern Ireland) Order 2006, CCNI has a statutory responsibility to represent consumers’ interests in economic regulation. The Orders state that CCNI:

– may make proposals, or provide advice and information, about consumer matters; and represent the views of consumers on such matters.

– may investigate any matter which appears to it to be a matter relating to the interests of consumers. Where CCNI has investigated a matter under this Article it may make a report on that matter to the Authority, the Department, the OFT or any other public authority whose functions appear to CCNI to be exercisable in relation to that matter.

Key areas for potential consumer detriment for Northern Ireland

In light of the above it can be argued that there are the following key areas of potential consumer detriment in Northern Ireland.

Institutional and civic arrangements

One potential area for consumer detriment is that consumers in Northern Ireland may suffer from being overlooked or omitted in broader UK institutions where these may be focused on GB more than on issues concerning Northern Ireland. Whilst this risk is offset to some extent through devolved institutions, where there are no devolved institutions and in private and civic society where GB consumers are represented by private bodies such as the Automobile Association it could be argued that there are risks that issues concerning Northern Ireland consumers will not be fully represented.

Further, it could be argued that there are risks that the interests of Northern Ireland consumers will not be fully reflected in EU and international discussions and negotiations.

Infrastructure patterns and population distribution

The specific nature of Northern Ireland markets and its population distribution present significant possibilities for consumer detriment. For example, the reliance on oil heating already creates high prices for consumers and a lack of gas connectivity for consumers also reduces competition.

Market size and competition

It is also possible that the relatively small scale of utility markets in Northern Ireland acts against the development of effective competition in retail markets. This could suggest that

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consumers may not benefit from choice of providers and that there may be more extensive market failures.

The effectiveness of current arrangements

This review of consumer arrangements has included interviews with leading stakeholders in Northern Ireland in relation to the effectiveness of current arrangements.

These interviews were carried out in confidence and results have been aggregated to preserve the confidentiality of respondents.

Such arrangements are discussed below under the following categories:

– Effectiveness of consumer engagements procedures;

– Effectiveness of consumer information actions including charters, awards and quality indicators;

– Effectiveness of complaints handling processes;

– Effectiveness of consumer representation in policy areas and with market operators; and

– Effectiveness of consumer campaigns.

Effectiveness of consumer engagement procedures

Consumer engagement is undertaken by CCNI through complaints responses and market research activities including surveys, focus groups and direct discussions with consumers. Consumer needs are also identified through policy analysis and discussions with experts and other public bodies.

Generally consumer engagement procedures are seen to be effective and CCNI enjoys a high reputation within Northern Ireland as the voice of consumers. It is felt that CCNI understands consumer concerns and is active in promoting their solution.

It was also felt that it is important for CCNI to have sufficient resources to undertake more detailed market research of consumer views particularly where there is ineffective competition.

Effectiveness of information actions

CCNI undertakes a range of consumer information actions. In the water sector these include the Water Champions award for businesses and farms to improve water efficiency

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and a guide for businesses to encourage water efficiency.6 Further, it has issued a guide to free energy and water services for older consumers or those with specific needs.7

CCNI assists market transparency in relation to the retail energy markets by providing electricity and gas price comparison tables and information about electricity, gas, coal and home heating oil.

Effectiveness of complaints handling processes

Complaints are handled by CCNI who acts on behalf of complainants with the relevant companies.

When a consumer complains CCNI contacts the company concerned and discusses how the complaint can be resolved. It requests copies of all correspondence exchanged in relation to the complaint and will act on the consumer’s behalf to achieve a fair and satisfactory response to the complaint.

For more serious complaints or where complaints are not handled to the satisfaction of consumers, there are procedures for the escalation of complaints to Level 2 or Level 3 status. In these circumstances CCNI staff can directly assist consumers in their discussions with the companies to ensure redress.

Generally it was felt that CCNI handles complaints effectively and provides a vital service for consumers and the companies involved. In particular in representing consumers with companies and in monitoring the behaviour of the companies it was felt that CCNI was empowering consumers who may otherwise be vulnerable to detriment.

The process of escalating complaints was also seen as valuable in providing a good targeted remedy for consumer detriment. It was also noted that in mediating with consumers and providing detailed information about their needs, CCNI was also providing a useful service to the companies involved. In particular this was felt where these complaints allowed for identification of specific needs of vulnerable consumers.

It can also be considered that the effectiveness of complaints handling processes are consistently demonstrated by remedial regulatory actions in relation to identified areas of consumer detriment. For example, resulting consumer campaigns have led to positive actions by the Regulator in the interests of consumers and to codes of practice and actions in relation to miss-selling of energy services.

6 CCNI: “ Every Drop Counts” October 2012 7 CCNI: Electricity, Gas and Water suppliers in Northern Ireland offer a range of free additional services for older consumers or those with special needs

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Effectiveness of representation in policy areas

CCNI represents consumers in the policy process. In respect of utility sectors its duties are similar to those of the Utility Regulator which is also charged with promoting the interest of consumers. However, the role of CCNI differs from that of the Utility Regulator in that it does not seek to find a policy balance but purely to represent consumer interests.

This representation can occur through membership of relevant policy committees, submission of responses to consultations and through input into joint research or joint actions with other bodies.

In relation to energy issues CCNI represents consumers within the process of the Strategic Energy Framework. The targets here are to foster a 20% saving in energy (for EU energy consumption) and to increase the amount of electricity from renewable sources to 40% by 2020.

In respect of fuel poverty CCNI represents consumer interests on the Fuel Poverty Advisory Group and the Home Energy Conservation Authority Panel.

CCNI also has a specific role in relation to the economic regulation of utilities (this was detailed earlier) where it may also investigate issues of concern to consumers. A revised Memorandum of Understanding in relation to its work with the Regulator is currently being discussed.

In respect of involvement in relevant committees it was felt that CCNI provides a valuable input into these discussions and that it articulates the consumer voice forcefully. In doing so its contributions were valuable and improved the work of the committees and the effectiveness of policy.

Where stakeholders had concerns in relation to CCNI’s input these related to its capacity to finance detailed technical research and to possible issues in relation to clarity of its role.

In this respect it was pointed out that consumer bodies in GB have historically taken a very pro-competitive stance in relation to utility markets and have campaigned for a very strong ex ante regulation to provide consumers with greater choice and to encourage efficiency and innovation. It was not felt that CCNI has taken such a stance and this was felt to inhibit effective pursuit of consumer interest even taking into account the difficulties of achieving effective competition in small utility markets.

Effectiveness of consumer campaigns

CCNI has recently led significant campaigns in relation to the energy market through Lord Whitty’s report. It was noted that CCNI had helped to publicise issues central to the problems of fuel poverty which created consumer detriment. However, there were concerns that the individual nature of this report which lay outside the process of the Strategic Energy Framework reduced its usefulness for policy makers who were bound within existing procedures.

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Lord Whitty’s report concludes that the lack of energy infrastructure and a reliance on home heating oil appear to be the biggest issues for Northern Ireland’s energy consumers.

CCNI has worked with Northern Ireland Water to improve water and sewerage services. An example of this work is outlined in the CCNI report “Tapping into Consumer Views on Water.”8 This report led NI Water to commit to five specific service improvements in relation to flooding, low water pressure, interruption of supply, written complaints and the customer experience. The “Tapping into Consumer Views on Water Update” reported on progress made towards these objectives.

In general it was felt that CCNI’s work had helped alleviate consumer detriment in this area and that close partnership with Northern Ireland Water had assisted the company in improving its services, understanding consumers and identifying and assisting vulnerable consumers.

8 CCNI “ Tapping into Consumer Views on Water.(Tapping) a report on consumers’ views or water and sewerage services in Northern Ireland,” (2009)

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4 THE COSTS AND BENEFITS OF CURRENT ARRANGEMENTS

Introduction

In this section the costs and benefits of current arrangements are considered.

Approach

The effectiveness of the representation of consumers in Northern Ireland has broader economic effects and it is important to consider these in considering the proportionality of different arrangements. For example arrangements which may appear costly in isolation but which help drive energy or water prices down could have significant net economic benefits.

To consider the organisational costs of current arrangements, it is useful to estimate staff and overhead costs of CCNI in relation to its activities.

To establish the scale of these potential benefits it is useful to consider directly the costs and benefits of particular policy processes involving CCNI. Further, in light of this the likely broader economic effects in relation to output in Northern Ireland can be considered by using Office of National Statistics input and output tables.

Finally, (in line with Impact Assessment practices) it is important to consider the costs and benefit of current arrangements in the context of other possible arrangements.

Costs of CCNI for energy and water sectors

The total budget for electricity work is £228,736 (40% of total energy budget of £571,839).9 The number of electricity customers in NI in 2012 was 837,095 (domestic and I&C). The cost to each electricity customer for work was £0.27 for 2012.

The dedicated energy budget for natural gas work is £171,552 (30% of total energy budget of £571,839)10 . The number of natural gas customers in NI is 172,251 (domestic and I&C) which equates to approximately a cost of £1 per year for each natural gas customer in 2012.

The total budget for CCNI’s water function in 2013/14 is £435,661. Averaged out over Northern Ireland consumers this costs each household £0.62 a year.11

9 Figures provided by CCNI 10Figures provided by CCNI 11 (£435,661 / 700,000 households). Figures provided by CCNI. For the purpose of this report, budget has been apportioned to domestic households only , however CCNI also works on behalf of businesses

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The proportionality of these costs

The costs of energy and water work undertaken by CCNI therefore average out at £1.27 per household.

Whilst this average cost is more than that which would be expected from a GB consumer body, the difference is due to the requirement for CCNI to have expertise in technical issues such as price control and industry specifics if it is to be effective. Also gas is a relatively small (but growing) customer base and is a relatively new market which has brought many new challenges to CCNI.

Given this, and the benefits described below which arise in part from such expertise, these costs can be considered to be proportionate.

Benefits of CCNI

To estimate the benefits derived from CCNI as an independent consumer body it is important to consider:

– The savings achieved through the policy process of which CCNI is an important part;

– The benefits where CCNI acts to improve the effectiveness of competition in markets; and

– The broader economic effects of downward pressure on energy and water prices created by CCNI.

Savings for consumers achieved through the policy process

The importance of independent consumer representation in price control discussions

As discussed earlier, for consumers to be most effectively represented in Price Control discussions it is important that there is an independent body solely charged with representing consumers to counter-balance operators within a context where the regulatory body has to find a balanced judgement in the public interest. For Northern Ireland this model (expressed ideally) can be shown in Figure 4.1.

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Figure 4-1: CCNI involvement in the regulatory process

As discussed in Section 3 of this report stakeholders interviewed for this analysis suggested that CCNI was generally seen as making effective contributions to the price control process for energy and water sectors and to wider policy discussions.

These wider policy discussions have significant implications for consumers as can be seen from consideration of recent price controls for energy and water supply.

Energy and water price controls and saving for consumers

Energy price controls

It can be estimated that the recent electricity Price Control discussions will bring an estimated saving of £20 per year to each domestic customer, or a gross saving of £15.63m per each year of the five year Price Control to the domestic customer base compared to Northern Ireland Electricity’s initial proposals.12

Had the regulatory model not involved separate consumer representation, it can be argued that there would have been less pressure to justify price rises and less

12 Competition Commission Provisional Determination

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transparency in the regulatory decision making process. As can be seen from the Competition Commission provisional determination, if anything the Regulator could have benefitted from greater resources and support in its own decision making.

Water Price Controls

NI Water is designated as a Non-Departmental Public Body (NDPB) for public expenditure purposes. This followed the decision by the NI Assembly to defer the introduction of direct domestic charges.

Effectively this means a budget is set by Government (both opex and capex) and stakeholders work to get the most from this through a Price Control discussion.

It is estimated by the Regulator that NI Water’s first two Price Controls (PC10, 2010-2013 and PC13, 2013-2015) delivered total savings of £149m (£91m for PC1013 & £58m for PC1314).

According to the Regulator’s final determinations for PC10, bills and the subsidy for Northern Ireland Water will be £91m lower than NI Water’s bid, while investment continues and service improves. This represents a £53 downward shift in notional average household charge (13% relative to 2009/10 charges); a £59 downward pressure of notional average bill for a small metered business; £862 downward pressure on notional average large metered business bill and a £53 downward pressure on notional average unmetered business bill.

For PC13, bills and subsidy together will be £58 million lower than NI Water’s bid. As a result, tariffs will fall, on average, by 6% below inflation for each of the two years from 2013 to 2015. Higher levels of service have also been delivered with an improvement in the overall performance assessment (OPA) score, moving from 131 at the start of PC10 to 215 by close of PC13. This will narrow the gap to the average England and Wales water company score of 290.

Clearly the scale and impact of the price reductions described is extremely significant. Whilst CCNI is not fully responsible for these savings, it is clear based on the various CCNI submissions and records of meetings it contributed to that independent consumer representation was an important part of the process which led up to its achievement.

13 http://www.uregni.gov.uk/uploads/publications/Final_Summary_Report_PC10_NIAUR_FD_Feb_10_-_Doc01_- _Summary_Report_1.pdf

14 http://www.uregni.gov.uk/uploads/publications/PC13_Final_Determination_Website_version.pdf

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Improvements to the process of competition

Consumer bodies can also play an important part in improving the process of competition (making it more effective) by raising awareness about the choices available in the market, highlighting bad practices and addressing consumer detriment.

One area of particular significance is that of improving market transparency to stimulate switching where markets have recently been opened, so that consumers are better aware of their options and of lower tariffs which may be available to them.

Switching in the energy sectors

To facilitate switching in the energy sectors, the Consumer Council produces gas and electricity tariff comparison charts available to individuals and organisations online and in hard copy form. CCNI has produced information leaflets on how to switch natural gas and electricity supplier and has attended and presented at numerous events throughout the year promoting switching to individuals and organisations.

Overall the total number of domestic customers switching electricity supplier was 103,177 in 201215 with an average saving per customer of £5516, and a total saving for Northern Ireland domestic electricity customers of £5,647,735.

The total number of domestic customers switching natural gas supplier in 2012 was 18,70017, with an average saving per customer of £43, and a total saving of £804,100.

Broader economic effects

It is important to assess the broader economic effects of such cost savings for consumers. This is important in the context of assessing how such benefits can inform the wider policy and Price Control decisions and also discussions in relation to the proportionality of arrangements.

Input output calculation for electricity, gas and water sectors

ONS input output tables can be used, with results placed in the context of Northern Ireland’s economy. These can be used to show the likely output effects of changes in prices.18

In light of the significant savings obtained for consumers during the price control processes identified earlier in this section, it can be assumed that such processes could lead to at least a 5% downward pressure on prices for both energy and water sectors.

15 Utility Regulator Energy Retail Report 2013 16 Consumer Council figure based on average savings between different payment types and different suppliers on 2013 tariff rates 17 Utility Regulator Energy Retail Report 2013 18 See for example “the study of the benefits of competition in the UK mail market” by Europe Economics 2007

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Table 4.1 below shows the results of this analysis based on the latest ONS figures put into current prices.19

Table 4-1: GDP effects of changes in energy and water prices (over a one year period)

Sector UK output NI Proportion 2004 Figures Price Regulatory GDP (£billion) (£million) at current elasticity model price effect of prices (£ effect (%) regulatory million) model (£ million) Electricity 29.1 832.5 1,147.2 -0.2 5 11.5 production and distribution Gas 15.5 442.4 609.6 -0.2 5 6.1 production and distribution Water 4,3 123.6 170.3 -0.1 5 0.9 supply Total 48,901 1,398.5 1,927.1 - - 18.5

Key assumptions in the analysis

– UK output figures have been apportioned to Northern Ireland as per population based on 2004 Census data.

– Price elasticity for electricity and gas estimates based on market study- “An economic analysis for the elasticity of demand for energy in Northern Ireland” by Mr Michael Smyth & Dr Mark Bailey, School of Economics & Politics, University of Ulster for Northern Ireland Authority for Utility Regulation.

– Whilst there is little conclusive evidence of water price elasticity, in the context of NI’s charging arrangements for consumers it is assumed to be extremely low at -0.1.

This analysis suggests that there would be a combined output (GDP) effect for Northern Ireland of a price reduction of 5% for energy and water sectors of over £18 million over a one year period at current prices.

19 ONS input output tables from 2006 are used, with Treasury discount rates of 3.5% applied.

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As stated earlier it is impossible to isolate exactly the impact that CCNI has had on energy and water prices. However, given the savings which can be demonstrated from recent price control discussions where CCNI has played an active role in representing consumers, and given its wider role in improving consumer awareness and handling complaints, it is reasonable to assume that CCNI has at least had a downward impact of the magnitude of 5% on prices.

Findings from this cost benefit analysis

This cost benefit analysis strongly suggests that, whilst the costs of current arrangements are fairly low and proportionate to the number of consumers in Northern Ireland, they are far outweighed by the benefits accrued under current arrangements. This is due to the impact that more effective price control arrangements has on consumer bills and GDP effects from even modest increases in downward pressures on energy and water prices.

The costs and benefits of alternative options

In its consultation on future arrangements DETI proposes two additional options to the continuation of CCNI:

– To set up a new consumer body outside government; or to

– To merge consumer representation into a non-government advice body.

Setting up a new consumer body outside government

As has been noted in this analysis independent consumer representation provides many benefits to consumers.

Of these, it is likely that a new consumer body could (when fully operational) handle complaints and run awareness complaints effectively.

However, a key benefit of being inside government is that the consumer body can represent consumers in policy discussions and in doing so provide a counter to vested interests from which the regulatory body can then find a balance in the public interest.

If the consumer body was outside government it is possible that, even were it consulted on policy issues there may be difficulties in areas such as confidentiality of information and the level of appropriate disclosure possible.

Moving the consumer body outside government could lessen its impact on energy and water prices, which as we have seen is a key benefit of such a body.

Further, it could also be argued that a non-government body may have stronger incentives to disengage from the policy process and engage in more populist campaigning which may weaken strategic decision-making and reduce trust in the process.

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In any case establishing such a new body could involve significant costs and resulting delays and hiatus whilst one organisation is closed and a new one is established. This could cause a lack of effective consumer representation at precisely the moment where consumers are suffering detriment such as escalating fuel, food and household bills.

Merge consumer representation into a non-government advice body

In principle, merging consumer representation into a non-government advice body could save some overhead costs and provide some synergies in relation to complaints handling and addressing individual cases of consumer detriment. Further there may be opportunities to avoid some campaigning duplication.

However, as discussed in this report, a key benefit of independent consumer representation is its policy input and it is possible that quality independent input into policy decision-making would not survive the merger. This would result in a loss of the substantial economic benefits which derive from the current model of regulation.

Further, existing non-government consumer advice bodies are very different in nature and staffing from CCNI because of its NDPB status. Given this, the merger may lead to an erosion of the effectiveness of consumer representation in relation to understanding and handling policy developments.

Non-government advice bodies are also based much more firmly on the complaints of individual consumers. The handling and dealing with such complaints is an important part of consumer representation, but is not the same as being able to identify strategic consumer interests. If a merger did not at the same time conserve the ability of the consumer body to understand and pursue strategic consumer interests then it is possible that the quality of policy making as a whole would be reduced.

In practice were such a merger to take place then there would also be substantial costs of disruption and delay and a probable period of hiatus as new arrangements settled down.

The experience of new arrangements in GB

It is useful to consider the experience so far of the new arrangements in GB where the proposed merger of Consumer Focus into Citizens Advice is currently being implemented.

In practice there has already been significant delay in implementation of the new arrangements and considerable uncertainty and loss of expertise in relation to consumer issues.

Further, the decision to close Consumer Focus appears to have contributed to an apparent policy vacuum in the energy sectors which politicians of all sides have been trying to fill with promises in relation to reducing energy bills.

Ofgem has been left somewhat isolated in the policy process and has been attacked from all sides as being unable to represent consumers effectively despite its process of

30 consultation with consumers in price controls. Politicians are already discussing how to ensure a better representation of consumers in this area.

Whilst these new arrangements have yet to settle down, at present they do not appear to be working as effectively as those currently in place in Northern Ireland.

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5 CONCLUSIONS

Introduction

This section sets out conclusions and recommendations.

Main conclusions

The main conclusion from this review is that in general consumers in Northern Ireland are well served by the actions (in relation to complaints handling and broader consumer representation) of CCNI and by its contribution to the policy making process.

The specific situation of consumers in Northern Ireland renders them vulnerable to significant consumer detriment and without CCNI there are significant dangers that consumer interests and those of vulnerable consumers in particular would not be adequately represented.

Desk research of comparative regulatory models suggests that outside the UK there is a variety of approaches to organising consumer organisations depending on policy choices in relation to the model of economic regulation, the development of competition and also the national culture. Consumer organisations exist in all the countries that have been considered here but the plurality and role of these bodies can vary. Where there is extensive regional autonomy, regional consumer bodies exist and where there is a culture of consumer representation as opposed to promotion of competition, there is a multiplicity of consumer bodies for single issues or sectors.

Discussions with stakeholders suggest that the Consumer Council is a well-respected institution and that current arrangements work well in general for consumers. The handling of complaints has provided concrete examples of successful intervention on behalf of consumers reducing detriment (and imbalances in power between consumers and suppliers), and allowing for improvements in service provision and market transparency. Other useful actions for consumers have included kite marking and awards and price comparator information.

The pursuit of strategic campaigns to identify consumer interests in issues of key importance for consumers appears to have been well targeted, although it is important that such campaigns can be bound with broader policy processes.

A cost benefit analysis of current arrangements has shown that the costs of CCNI are proportionate in relation to its work in energy and water sectors. The process of price control discussion, where CCNI has played an important role in representing consumers has led to significant savings for consumers in the form of lower bills than would otherwise have been the case. An analysis of the wider economic benefits that even a modest downward pressure on prices for energy and water services can create for the Northern Ireland economy suggests that CCNI could be generating benefits of over £18 million.

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.

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ANNEX ONE: COMPARATIVE CONSUMER ARRANGEMENTS

Introduction

This Annex sets out more detail on the research undertaken in relation to comparative arrangements for consumer bodies in the EU and internationally.

European Consumer Bodies

In this section arrangements for selected EU Member States are considered.

Denmark

Ministries responsible for Consumer Affairs

The Ministry of Economic and Business Affairs is responsible for consumer policy, consumer protection and consumer affairs, ensuring the rights and safety of consumers. The Ministry includes nine agencies and a number of other institutions, which assist in developing, formulating and implementing policies.

The Danish Competition and Consumer Authority, under the Ministry of Economic and Business Affairs, makes a foundation for a coordinated and active contribution in the field of consumer affairs and contributes to the creation and maintenance of a high level of consumer protection regarding quality, safety, health and financial and legal rights. The Authority provides information on consumer rights as well as advice prior to or after having purchased goods or services.

The Ministry of Justice is responsible for EU and national legislation protecting consumer interests. Regarding consumer interests, the Ministry is responsible for legislation in the areas of private and family law, including registration of property, contract law, property law and insurance law.

Public agencies

In terms of public agencies, there is, first, the Danish Consumer Ombudsman (DCO). The DCO is an independent authority. One of its main responsibilities is to ensure that trade; business and public enterprise of an equal status comply with principles of fair marketing practices.

Second, there is also the Danish Financial Supervisory Authority (FSA) which is essentially active in supervision, regulation and information. Through its market supervision the FSA contributes to an efficient securities market, e.g. by counteracting the abuse of inside information and price manipulation.

Other relevant bodies include a number of national consumer organisations such as the Danish Consumer Council, which is the most well established consumer organisation. It is an umbrella organisation including 30 national member organisations. 65% of its annual

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income is funded by the government. It is independent of public authorities and commercial interests. The Danish Consumer Council represents consumers in councils, on boards and committees and vis-à-vis the Government and the Parliament.

Complaint boards

Moreover, the Consumer Council has a strong relationship with the business community, which has led to the establishment of several private complaint boards in various areas such as insurance, banking and investments, travel and construction. In total there is a list of 18 complaint boards; all are approved by the Ministry of Economic and Business Affairs.

There are no main courts specifically responsible for hearing consumer cases. The main Alternative Dispute Regulation (ADR) body is the Consumer Complaints Board (Forbrugerklagenaevnet). The Board deals with complaints from private consumers concerning goods, labour or services provided by businesses and decides whether the complaint is brought to court.

The Danish Consumer Council has set up a scheme which offers consumers financial support and guidance in leading consumer cases. Financed by the Ministry of Economic and Business Affairs, the scheme’s purpose is to promote judicial decisions in cases of particular interest to consumers.

Dansk Varefakta (DV) is a private organisation, partly funded by the government, which carries out impartial inspections of the quality and safety of goods sold in retail.

In terms of self-regulation, representatives from industry, wholesale and retailers, consumers and the government set up guidelines as an alternative to legislation. A committee set up by business and consumer organisations then enforces these guidelines.

Cross-border organisation

At international level, the Forbruger Europa (Consumer Europe) gives advice in connection with cross-border trade within the EU. It informs consumers of their rights and obligations and helps them get the most out of the single market. It is funded by the European Commission and the Danish Competition and Consumer Authority. Next to Consumer Europe, the DCO acts as the main point of contact for other EU-based consumer protection authorities and monitors compliance with 13 EU directives.

France

Ministries responsible for consumer affairs

The Minister for the Economy, Industry and Employment (Minister of Finance) is responsible for the development and implementation of consumer policy. The Directorate-

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General for Competition, Consumer Affairs and Fraud Repression (DGCCRF) is the supervisory authority. It implements government consumer policy and decides the amount of public funding that consumer organisations receive. The DGCCRF works when needed with other Ministries:

– Ministry of Justice

– Ministry of Agriculture and Fisheries

– Ministry of Health, Youth and Sports

– Ministry of Sustainable Development

Independent administrative responsibilities with direct impact on consumer policy include the following:

– The Competition Authority

– The Financial Markets Watchdog (AMF)

– The Electronic Communications and Postal Services Watchdog (ARCEP)

– The Insurance and Mutual Societies Watchdog (ACAM)

– The National IT and Freedoms Watchdog (CNIL)

– The Energy Watchdog (CRE)

– The Consumer Safety Watchdog

– The Health Watchdog (HAS)

Public agencies

Specialist public agencies operating in consumer protection:

– The French Food Safety Agency (AFSSA)

– The French Agency for the Safety of Health Products (AFSSAPS)

National consumer organisations

On a national level, there are 18 national consumer organisations, associations and confederations, e.g. Federal Union of Consumers (UFC), Workers’ Force Consumers’ Association (AFOC) and so on. They are all nationally approved by the Consumer Code (see below) and are, therefore, entitled to prosecute infringements before the courts.

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The National Consumer Council (CNC) aims to allow confrontation and dialogue between the collective interests of consumers and users and the representatives of suppliers, the public services and the authorities responsible for consumer issues. The CNC is chaired by the Minister of Consumer Affairs.

The website of the Ministry of Justice informs citizens about their rights. Bodies such as the district courts, justice conciliators and neighbourhood judges come under the judicial system. At the initiative of the DGCCRF, there are consumer dispute settlement committees called CRLCs: CRLC d’Ille et Vilaine and CRLC des Pyrénées Orientales.

Redress bodies

There are at least 12 ombudsmen, for instance Ombudsman of the Republic, Ombudsman of the Ministry for the Economy, Industry and Employment, etc.

Self-regulation

In terms of regulation, all the administrations participate in the development of self- regulation for economic operators and the promotion of co-regulation with consumers and the associations representing them. Some of the independent administrative authorities also participate in co-regulation with market players and consumer representatives, e.g. the Professional Regulation Authority of Advertising (ARPP), a co-regulation mechanism set up by the advertising industry; the Forum des Droits sur l’Internet promotes self- regulation for operators and co-regulation with the public authorities.

The main body of legislation is the Consumer Code, composed of 5 parts:

– Consumer information and the conclusion of contracts

– Conformity and safety of products and services

– Credit and indebtedness

– Consumer associations

– Consumer-related institutions

The Consumer Code defines conditions under which consumer organisations can be nationally identified as such. Approval by the Consumer Code is the act of recognition of the consumer organisation at national level. It then allows the organisation to act in defence of consumers’ general interests.

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Enforcement/redress bodies

The DGCCRF is given the powers of injunction, suspension and settlement in line with Community law. It identifies contraventions of the Consumer Code; it draws up reports to be sent to the public prosecutor. Other authorities and institutions:

The Consumer Complaints Board (CRLC)

National Consumer Council (CNC): promoting alternatives for the amicable settlement of disputes through mediation in particular

Four types of action are available to approved consumer associations under French law: civil actions, right to intervene as a secondary plaintiff, action as the main plaintiff, joint action and injunction.

Germany

Ministry responsible for consumer affairs

Germany has several institutions of Consumer Policy. At federal level, there is the Federal Ministry of Food, Agriculture and Consumer Protection (BMELV). It is responsible for consumer policy, consumer protection and general matters regarding consumer information. In particular, it is active in the following sectors:

– consumer health protection

– food and nutrition policies, especially dietary education

– animal feed; cosmetics

– pertinent labelling law, composition and labelling of tobacco products

– protection of consumers’ economic interests, including fundamental issues regarding consumer information, in the sectors mentioned earlier

Most consumer rights, rules and regulations are laid down in laws for which other Federal Ministries are technically responsible, e.g. general product and equipment safety are governed by the Federal Labour Ministry; rules of financial and capital market law are governed by the Federal Ministry of Finance; etc.

State-level responsibility

The 16 federal states (Länder) are responsible for the enforcement of laws. Therefore, there is no central supervisory authority for consumer protection. Government-funded private organisations operate in the field of consumer protection alongside the government bodies. Public authorities are responsible for enforcing the safety and health

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protection of consumers, e.g. food. The various responsibilities are coordinated in different public bodies, which are regulated at Länder level. The consumer advice centres at federal state level receive institutional as well as project financing.

There are, however, federal agencies engaged in the protection of the economic interests of consumers:

– The Federal Cartel Office

– The Federal Financial Supervisory Authority (BaFin)

– The Federal Network Agency for Electricity, Gas, Telecoms, Post and Railway

– The Federal Office of Consumer Protection and Food Safety (BVL)

– The Federal Institute for Risk Assessment (BfR)

– The Federal Institute for Occupational Safety and Health (BAuA)

– The Federal Institute for Drugs and Medical Devices (BfArM)

National consumer organisations

There are two large consumer organisations: the Federation of German Consumer Organisations (vzbv) and the Stiftung Warentest, Germany’s premier consumer testing organisation. There are at least 42 members of the umbrella organisation (vzbv) that can be considered as consumer organisations or consumer-policy oriented associations. In addition, there are other consumer organisations such as the German Consumer Initiative.

The vzbv is a non-governmental body which covers around 90% of its budget with annual institutional grants provided by the federal government (BMELV). It is an umbrella organisation for the 16 consumer advice centres in the federal states and for 26 consumer-policy oriented associations. It represents the interests of consumers in public and vis-à-vis policy-makers, public authorities, businesses, economic operators and civil society at national, European and international level.

Enforcement/Redress bodies

In the field of economic consumer protection, consumers are themselves generally responsible for asserting private claims under civil law. There is no public enforcement authority that takes care of this. Yet, there are out-of-court dispute settlement bodies for financial services (complaints against banks may be addressed to ombudsmen or conciliation bodies of banking associations), insurance companies (Insurance Ombudsman), transport sector (e.g. Arbitration Board for Public Passenger Transport) and other sectors (German Contact Point for Arbitration/e-Commerce Contact Point Germany).

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Italy

Ministry responsible for consumer affairs

The Ministry responsible for consumer policies is the Ministry of Economic Development. Its principal task is to assure consumer protection in the fields of competition and market. There are some sector-based activities within other Ministries, Public Institutes and Independent Authorities. Also, there are other structures at the local level with competences in specific areas.

The EU consumer protection legislation has been collected into a consolidated Act, i.e. Consumers’ Code (Codice del Consumo). It is a fundamental reference law, which in short reflects the guidelines of the EU programme.

The Ministry of Economic Development has both the role of the Italian Single Liaison Office (SLO), implying responsibility for coordinating the application of consumer protection laws, and the Competent Authority (CA) for several directives, implying responsibilities to enforce the laws that protect consumers’ interests.

Public enforcement authorities

There are numerous examples of public enforcement authorities other than Ministero dello Sviluppo Economico, such as Autorità Garantedella Concorrenza e del Mercato (AGCM) or Autorità per le Garanzienelle Comunicazioni (AGCOM).

Consumer organisations

The 17 most notable consumer associations are all part of the National Council for Consumers and Users (CNCU). It represents the consumers’ and users’ associations nationwide. Its tasks aim to improve and strengthen the consumers’ position into the market. The Council is part of the Ministry of Economic Development and its chair is held by the Minister. The CNCI also provides information on the nature, composition and activities carried out by the Council and it offers the possibility to consult both legislation and principal actions in the field of consumer protection.

The 17 consumer associations are listed in article 137 of Consumers’ Code, for instance:

– Associazone Consumatori Utenti (ACU) with 48,302 members,

– Associazione Italiana Difesa Consumatori e Ambiente (ADICONSUM) with 148,403 members or

– Confederazione Generale dei Consumatori (CONFCONSUMATORI) with 33,707 members.

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There is no central governmental funding for consumer associations. Some regions provide financial support and resources may be supplemented by project grants from national/local bodies and the European Commission. Consumer associations are empowered to take action on behalf of the collective interests of consumers as a whole and in certain circumstances a group or a single association may also start a legal action on behalf of a number of consumers. Key areas of complaints by consumer groups are insurance and financial services, telecoms and public services.

Redress bodies

There are three redress bodies in Italy. The first is the Banking and Financial Arbitrator (ABF). It represents an alternative dispute resolution system between customers and banks or other financial intermediaries in relation to purchases of banking and financial services or products. The Bank of Italy provides financial support for its functioning. Among other subjects, banks and financial intermediaries are obliged to join to the ABF.

The second body is the Banking Ombudsman (Ombudsman Bancario), a collegial body with the task of resolving disputes between customers and banks or financial institutions, regarding operations, investment services, etc.

The third body is the Conciliation and Arbitration Chamber. Its main task is to deal with out-of-court disputes between investors and intermediaries. It has been set up to ensure a higher level of protection to savers. There are conciliation services run by the Chambers of Commerce, Industry and Craft Trades based in each Italian province.

The Netherlands

Ministry responsible for consumer affairs

There is no single Ministry responsible for consumer policy, consumer protection and consumer affairs. Yet, the Minister of Foreign trade within the Ministry of Economic Affairs, Agriculture and Innovation is responsible for the general consumer policy and some specific sectors, e.g. energy and telecommunications. Other aspects are dealt with by:

– the Ministry of Justice,

– the Ministry of Health,

– the Ministry of Finance and

– the Ministry of Freedom and Justice.

Public enforcement agencies

The Netherlands have three public enforcement agencies:

– the Dutch Consumer Authority (CA)

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– Netherlands Authority for the Financial Markets

– Public Prosecution Service

National consumer organisations

There is no official list. There are, however, organisations that are de facto considered as consumer organisations. The biggest and more general consumer organisation is the Consumentenbond with 580,000 members. It gives information about consumer law and product or services tests. It also publishes several magazines and gives opinions to new consumer policy, on national and European level.

Other consumer organisations are more sector specific. Here are a few examples out of a long list: Stichting de Ombudsman for consumer law; ANWB for cars, travelling or Vereniging eigen Huis for houses, living. There is no public funding for consumer organisations. They are funded on a project basis.

The Social Economic Council (SER) is the main advisory body to the Dutch government and parliament on social and economic policy. It has a special commission for consumer affairs. The SER is financed by industry and represents the interests of trade unions and industry. One of the SER’s tasks is to promote desirable trends in business and industry. Therefore, it encourages business and consumer organisations to consult each other about mutually satisfactory general terms and conditions.

Redress bodies

Through this type of self-regulation, the SER has provided the basis for many Consumer Complaints Boards, made up of members representing both business and consumers, in many different sectors of the economy. Today, there are more than 40 Boards already and the number is growing.

There are two redress bodies in the Netherlands: the first is the Foundation for Consumer Complaints Board (SGC, Stichting Geschillen Commissies). The SGC’s aim is the resolution of disputes resulting from complaints by consumers concerning goods and services purchased from suppliers.

The second is the Institute for Insurance Complaints (Klachteninstituut Verzekeringen); including the Dutch Insurance Ombudsman and Dutch Insurance Supervisory Board. The Ombudsman will handle a complaint or dispute by requesting the Board to carry out an investigation.

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Portugal

Ministry responsible for consumer affairs

Responsibility for consumer policy, consumer protection and consumer affairs in Portugal is all taken up by the Secretary of State for Trade, Services and Consumer Protection within the Ministry of the Economy, Innovation and Development.

The Consumer Directorate-General (DGC, Direcção-Geral do Consumidor) is the main consumer body. It has many responsibilities, including:

– contributing to the drafting, definition and implementation of consumer policy, aiming to ensure a high level of protection;

– carrying the responsibility of guaranteeing consumers’ access to ADRs, i.e. arbitration centres and municipal centres for consumers information;

– informing consumers of their rights;

– directing consumers’ complaints to sector regulators;

– assessing the need for new regulation in all areas of interest to consumers, i.e. proposing new legislative measures;

– cooperating in the application of European law;

– interacting with public and private bodies;

– safeguarding consumers’ rights and interests;

– providing administrative and technical support and logistics to the National Consumer Council and to the Services and Consumer Goods Safety Commission;

Public agencies

The regulatory authorities are responsible for monitoring certain sectors of activity and in particular, for regulating any contradictory interests. There are 16 Regulatory Authorities and Market Surveillance Bodies, e.g. Competition Authority, Bank of Portugal, Securities Market Commission or Food and Economic Safety Authority. There are also five Observatories, such as the Advertising Observatory, Services and Consumer Goods Safety Commission or the Observatory for the Media.

National consumer associations

Portugal counts numerous national consumer associations. Portuguese Consumer Law states that consumer associations are non-profit organisations with legal personality,

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whose main goal is to protect the rights and interests of their associates and consumers in general. On the one hand, there are five consumer associations of general interest, i.e. protection of rights of consumers in general, and national scope, e.g. Associação de Consumidores de Portugal (ACOP) or regional scope, e.g. Associação dos Consumidores da RegiãoAçores (ACRA). On the other, there are five consumer associations for specific interests, i.e. associations of determined goods and services, and national scope, i.e. Associação Portuguesa de Consumidores dos Media (ACMEDIA) or regional scope, e.g. Associação Portuguesa de Direito do Consumo (APDC).

The National Consumer Council (CNC) is an independent body within the Ministry for Economy, Innovation and Development, for consultation, educational and prospective activities in areas related to consumer interests. The Council is also a forum for dialogue between the Public Administration, consumers and organisations representing interests groups in the consumer area. Among other responsibilities, it

– studies and proposes to the Government the main political and strategic guidelines, both sectorial and general for action;

– appreciates the annual report and action plan of the Directorate-General for Consumers; and

– makes recommendations on matters, actions or situations of interest for consumers’ rights to both public and private entities or to consumers.

Redress bodies

Portugal has a number of out-of-court bodies responsible for the settlement of consumer disputes, i.e. Arbitration Centres. They settle consumer disputes, set up by non-profit private associations, representing consumers and professionals. There are two sector- specific arbitration centres, 7 general arbitration centres with specific geographic jurisdiction and a National Centre entitled to settle all consumer disputes occurring in areas and sectors not covered by the other regional centres.

Further, there are out-of-court bodies involved in the voluntary resolution of consumer disputes and other entities of specialised mediation, such as consumer associations and consumer information centres (CIAC) of various municipalities.

Self-regulation

The Civil Institute of Self-discipline of Advertising (ICAP) implements self-regulation in the area of advertising. ICAP also offers an alternative dispute resolution system based on mediation.

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Sweden

Ministry responsible for consumer affairs

The Ministry responsible for consumer policy, nationally and at EU-level, is the Ministry of Justice. The consumer areas include among other subjects marketing, consumer prices, consumer aspects of financial services and electronic communication as well as product safety and standardisation. Several other Ministries are responsible for consumer-related issues, such as

– the Ministry of Agriculture,

– the Ministry of Justice and

– the Ministry of Finance.

Public enforcement agencies

They include:

– Swedish Consumer Agency/Consumer Ombudsman,

– Swedish Financial Supervisory Authority and

– Swedish Board of Supervision of Estate Agents

The Swedish Consumer Agency (see below) administers public funding for national consumer organisations. There is no list of consumer organisations at national level. Yet, there are two umbrella consumer organisations, i.e. The Swedish Consumers’ Association (Sveriges Konsumenter) and the Swedish Consumer Coalition (Sveriges Konsumenteri Samverkan). The former is a non-partisan cooperative organisation aiming to strengthen the position of consumers in order to improve people’s ability to bring their consumer power to bear. The latter is a non-profit, non-governmental organisation, representing no particular interest group. They monitor and raise vital consumer issues, focussing on consumption of goods and services, its motives and consequences, as well as consumers’ potential to bring about positive change.

There are no national consumer councils or assemblies. Meetings with consumer organisations and other consumer-related stakeholders are organised at the Ministry.

Self-regulation

There exist self-regulatory systems for different business sectors, e.g. Reklamombudsmannen. There are also special bureaus providing advice and guidance to consumers. The bureaus’ boards comprise representatives from the business sector as well as from the public authorities, e.g. the Swedish Consumers’ Banking & Finance Bureau or Swedish Consumer Electricity Advice Bureau.

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Enforcement/redress bodies

The Swedish Consumer Agency is headed by a Director General who is also Consumer Ombudsman (KO). The Agency/KO is responsible for the enforcement of consumer legislation and pursues legal action in court in the consumer’s interest. Areas the Agency is active in vary, e.g. goods and services safety, misleading advertising, unfair contract terms, domestic finances, etc. These are also the areas which the Agency can take measures against. In particular, KO support is when the KO represents a consumer in a case in court against a trader. KO may also represent a group of consumers in a group action.

Sweden offers the National Board for Consumer Complaints. The consumer always has the possibility to bring an action to civil court. The Board’s job is to

– investigate conflicts between consumers and traders about goods, services or other utilities intended for private use and recommend a solution

– give an advisory opinion in consumer disputes

– support the mediation role of local consumer organisations in consumer disputes

– inform consumers and traders of the Board’s practice. b) International consumer arrangements

In this section the arrangements in key countries outside Europe are considered.

United States of America

Ministry responsible for consumer affairs

There is no single Ministry responsible for consumer affairs. The following list depicts the US’ numerous federal government agencies:

– U.S. Department of Agriculture

– Banks: which federal agency regulates your bank

– Banks: Office of the Comptroller of the Currency (your rights w/national banks)

– Commodity Futures Trading Commission

– Consumer Financial Protection Bureau

– Consumer Product Safety Commission

– Consumer Sentinel: Joint Federal/State/Local complaint database

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– Federal Communications Commission

– Consumer and Governmental Affairs Bureau, part of FCC

– Comptroller of the Currency ("national" banks)

– Environmental Protection Agency

– Federal Citizen Information Center (Pueblo, CO)

– Federal Reserve Bank consumer information

– Fed Sales: one-stop shopping for government auctions, surplus, etc.

– Federal Trade Commission

– Food and Drug Administration

– Dept. of Housing & Urban Development (HUD)

– Internet Crime Complaint Center (FBI and others)

– National Highway Traffic Safety Administration

– U.S. Postal Inspection Service

– Securities and Exchange Commission fraud/complaint center

– Seniors.Gov: info from federal agencies for senior citizens

– Department of Transportation: aviation consumer protection division

– USA.gov(FirstGov): US Government information by subject

State and local consumer agencies

It varies from state to state. For instance, Idaho only has the Idaho Attorney General Consumer Protection, whereas other states have various organisations, such as California:

– California Attorney General consumer information/complaints

– California Bureau of Auto Repair

– California consumer laws

– California Contractors State Licensing Board

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– California Dept. of Consumer Affairs

– CA Los Angeles County Dept. of Consumer Affairs

– CA Office of Privacy Protection

– CA Santa Cruz County District Attorney Consumer Affairs Division

– CA San Francisco Consumer Advocate (weights and measures, agriculture)

The Better Business Bureau (BBB) is a non-profit organisation focused on advancing marketplace trust between businesses and consumers. It consists of 113 independently incorporated local BBB organisations in the US and Canada and it is coordinated under the Council of Better Business Bureaus (CBBB) in Washington, D.C. The BBB is a non- governmental agency and, therefore, businesses that affiliate with it and adhere to its standards do so through industry self-regulation. Its main tasks are to:

– AUTOLINE (mediation and arbitration of car complaints)

– Collect and provide free business reliability reviews on more than 4m businesses

– Serve as intermediary between consumers and businesses, handling nearly 1m consumer disputes against businesses in 2012

– Alert consumers to scams, reviews advertising

A few examples of BBBs are:

– BBB OnLine (look for the "CARE" symbol to assure honest dealings)

– Better Business Bureau On-line Complaint Form (national)

– Boston Better Business Bureau (with on-line reliability reports, scam alerts, more)

– Council of Better Business Bureaus

– Links to local Better Business Bureaus

– New York Metro Better Business Bureau

– National Advertising Division of the BBB

– Vancouver Island BBB

An important consumer organisation in the US, similar to Which? in the UK, is called Consumers Union or Consumer Reports. It is a non-profit organisation, which mission is to test products, inform the public and protect consumers. Its primary activities are

48 research, publishing and influencing policy affecting consumers, focusing on the following policy areas:

– Telecommunications

– Mass media

– Vehicle safety

– Health care

– Product safety

– Financial services

– Investing

– Food safety

– Housing

– Energy and utility deregulation

The Consumer Federation of America (CFA) is an association of non-profit consumer organisations which mission is to advance consumer interest through research, advocacy and education. Today, nearly 300 organisations participate in the federation and govern it through their representatives on the organisation’s Board of Directors. Its principle activities:

– Investigate consumer issues, behaviours and attitudes in order to assist advocates and policymakers

– Advance pro-consumer policies on a variety of issues before Congress, the White House, federal and state regulatory agencies, state legislatures and the courts

– Disseminate information on consumer issues to the public, news media, policymakers, etc.

The US has countless other consumer organisations and professional associations. A few examples:

– American Association of Family and Consumer Sciences

– American Society of Home Inspectors

– American Society of Travel Agents

– Call for Action (network of consumer help centers)

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– Community Associations Institute: for homeowners assns, coops, condominiums

– Consumers Union en espanol (in Spanish)

– Consumer Watchdog: Foundation for Taxpayer & Consumer Rights

– Foundation for Taxpayer and Consumer Rights

– ID Theft Resource Center

– Insurance Information Institute

– Medicare Rights Center

– National Association of State Utility Consumer Advocates

– Privacy Rights Clearinghouse

– Public Interest Research Groups (USPIRG & state PIRGs)

– SOCAP - Society of Consumer Affairs Professionals in Business

– Square Trade: free online alternate dispute resolution service

– Tenants Union (directory of resources nationwide)

Complaint boards

In terms of consumer protection, the US a numerous organisations where consumers can file consumer complaints:

– Bank Complaints

– Car Loans

– Consumer Loans

– Credit Card Complaints

– Credit Reporting Agencies

– Directory of State and Local Consumer Agencies

– Internet Fraud

– Investment Fraud

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– Mail and Postal Fraud

– Mortgage Loans

– Report Housing Discrimination

– Student Loans

– Telephone or Telemarketing Complaints

Competition regulation

The US competition regulators are the Federal Trade Commission (FTC) on the one hand, and the U.S. Department of Justice Antitrust Division, on the other.

Australia

Ministry responsible for consumer affairs

Responsibility for developing and implementing consumer policy in Australia is shared between the Australian Government and the states and territories. New Zealand also contributes actively in Australia’s consumer policy development.

The federal Treasury Department provides advice on Australia’s competition and consumer policy framework, including the Competition and Consumer Act 2010 and the Australian Consumer Law. It promotes competitive, efficient, well informed and safe markets. The Treasury is responsible for providing advice on consumer protection for individual members of superannuation entities. It works closely with the financial services consumer protection and market integrity regulator, i.e. the Australian Securities and Investments Commission.

Also, the National Office for the Information Economy (NOIE) and Department of Communications, Information Technology & the Arts (DCITA) offer access to government online consumer issues policy documents and guidelines.

The Assistant Treasurer is given advice on consumer policy issues by the Commonwealth Consumer Affairs Advisory Council (CCAAC), which Advisory Council meets two to four times a year.

The Legislative & Governance Forum on Consumer Affairs (CAF), formerly Ministerial Council on Consumer Affairs, consists of all Commonwealth, state, territory and New Zealand Ministers responsible for fair trading and consumer protection laws. Its main role is to consider consumer affairs and fair trading matters of national significance and develop a consistent approach to those issues.

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State-level authorities

At state level, the following Australian states/territories have consumer affairs or fair trading offices:

– Australian Capital Territory

– New South Wales

– Victoria

– Queensland

– South Australia

– Tasmania

– Western Australia

The offices administer the mirror legislation of their jurisdictions as well as the Competition and Consumer Policy Division of the Commonwealth Treasury. An example of a state consumer authority is Northern Territory Consumer Affairs. It is part of the Department of Justice and aims to promote and regulate responsible business conduct through administration of a regulatory system that protects consumer interests. Therefore, it provides information about rights and responsibilities for consumers and businesses in the Northern Territory. Regarding consumer protection, state and territory consumer affairs agencies are complemented by the ACCC (see below).

Here follows an overview of all state consumer authorities:

– Consumer Affairs [Northern Territory]

– Consumer Affairs and Fair Trading [Tasmania]

– Consumer Affairs Victoria (CAV)

– Consumer and Business Services [South Australia]

– Consumer Protection [Western Australia]

– Fair Trading [Australian Capital Territory]

– Fair Trading [New South Wales]

– Fair Trading [Queensland]

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National regulators

Competition and consumer laws are enforced by three national regulators. Firstly, there is the most important organisation in relation to online activity is the Australian Competition and Consumer Commission (ACCC). It is an independent Australian Government statutory authority. The ACCC promotes competition and fair trade in the market place to benefit consumers, business and the community. The Commission is concentrated on major competition policy questions, such as telecoms deregulation. Also, it regulates infrastructure services. It does not deal with individual consumer complaints. The ACCC’s primary concern is to ensure that individuals and businesses comply with the Commonwealth competition, fair trading and consumer protection laws.

Secondly, there is the Australian Securities and Investments Commission (ASIC). It is responsible for promoting the confident and informed participation of consumers in the financial system through the enforcement of the consumer protection laws.

Finally, the National Competition Council (NCC) is responsible for making recommendations on the regulation of third party access to services provided by monopoly infrastructure.

Consumer organisations

Two other major consumer organisations are the Consumers’ Federation of Australia (CFA), which is an umbrella consumer advocacy group, and CHOICE or Australian Consumers Association. The latter is a not for profit and non-partisan organization, which researches and campaigns on behalf of Australian consumers. It is similar to the Consumers Union in the US and Which? in the UK, which are considered sister organisations. It does not receive any funding from commercial, government or other organisations. CHOICE’s primary aims are to:

– provide consumers with information across a wide range of issues to allow them to make informed consumer decisions,

– provide lobbying services when required and

– test and rate a range of products and services, including appliances, baby products, electronics and home entertainment, computers, food and health and financial products and services.

Redress bodies

If consumers wish to file in complaints, Australia has developed various schemes, commissions and ombudsmen. A few examples:

– Fair Work Ombudsman

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– Aged Care Complaints Investigative Scheme

– Australian Commission for Law Enforcement Integrity (ACLEI)

– Commonwealth Ombudsman

– Complaints [Victoria]

– Consumer and Business Directory Search

– Credit Ombudsman Service

– Financial Ombudsman Service

– Postal Industry Ombudsman (PIO)

– Private Health Insurance Ombudsman

– Telecommunications Industry Ombudsman (TIO)

Self-regulation

The Australian Direct Marketing Association (ADMA) has placed its direct marketing “Merchant Code of Conduct” online. ADMA is the leading industry body for the Australian data-driven marketing and advertising industry. Together with its members, its goal is to help educate, advocate for and connect the industry. Its main mission is to provide information to consumers about direct marketing and help with questions or concerns about direct marketing and the related industry.

Cross-border organisations

The Consumer Affairs Australia New Zealand (CAANZ) is made up of Commonwealth, State and Territory officials with responsibility for consumer policy within their respective jurisdictions.

New Zealand

Ministry responsible for consumer affairs

The Ministry responsible for consumer affairs is the Ministry of Consumer Affairs, which is part of the Economic Development Group within the Ministry of Business, Innovation and Employment, formerly known as the Ministry of Economic Development. Their main role is to create an environment that promotes good and accurate information flows between suppliers and consumers in order to enhance consumers’ confidence. The Ministry has the following responsibilities:

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– develop consumer policy, including consumer protection, product safety and weights and measures

– provide appropriate, accurate and accessible information, education and advice for consumers and businesses on consumer laws and issues

– investigate unsafe consumer products

– provide advice on consumer representation, including a consumer representation nomination service to government departments and agencies

– administer a range of consumer legislation

National consumer organisations

Two major players stand out. First, the Consumers Institute of New Zealand (CINZ) or Consumer NZ, similar to Australia’s Consumers Association, is an independent, non-profit organisation, receiving no funding from any commercial or public organisation. Its work covers a wide range of activities relating to consumer protection and information. It includes:

– comparative tests and surveys of consumer goods and services,

– research into and advice on

– financial tools,

– health,

– safety,

– welfare and environmental matters

– representation at parliamentary committees and public enquiries

– interest in consumer education

– complaints advisory work

Second, the New Zealand Commerce Commission (CoCom) is New Zealand’s primary competition regulatory agency. The Commerce Commission enforces legislation that promotes competition in domestic markets and prohibits misleading and deceptive conduct by traders.

Other consumer organisations are more sector-focused associations, for instance:

– ConsumerBuild

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– New Zealand Vision Impaired Empowering Women

– Netsafe

– New Zealand Fire Service

– Privacy Commissioner

– Retirement Commission

Consumer complaints

Numerous sectorial organisations have been set up to help consumers resolve issues with their suppliers, such as:

– Banking Ombudsman

– Electricity and Gas Complaints Commission

– Insurance and Savings Ombudsman

– Legal Services Agency

– Telecommunications Disputes Resolution Service

– Cross-border organisations

The Consumer Affairs Australia New Zealand (CAANZ) is made up of Commonwealth, State and Territory officials with responsibility for consumer policy within their respective jurisdictions.

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