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Response to the BIS consultation on improving the consumer landscape

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Response to the Improving the consumer landscape and quicker switching consultation – June 2016

People are still having too many problems with companies that provide services that they need, like gas, electricity and water. So, the Department for Business Innovation & Skills wanted to know how they might improve the law so that all customers are treated fairly and get better value.

This consultation asked for views on how people could be better protected from poor service and supported to get the best value from energy, water, communications and travel companies. It also asked for evidence of processes that would make it quicker and easier for people to switch suppliers to get a better deal.

Our opinion

StepChange Debt Charity clients report a huge number of problems with electricity, gas, water, mobile phone, broadband and other communications firms to us. These include being sent incorrect bills, poor customer service, as well as difficulties cancelling contracts, contacting suppliers or agreeing affordable debt repayments. In many cases these issues make people’s debt problems worse. We think that regulators should do more to protect people with financial difficulties from being treated unfairly by the firms that supply these services.

Summary of the points we included in our response

We argued that regulation needs to take more account of the problems faced by people in financial difficulty and the effect on their treatment by essential service providers.  Regulators should work with advice organisations to monitor the issues clients report so that they have a good overview of these problems and can monitor them over time.

We suggested that free and easily accessible Alternative Dispute Resolution would help people on a tight budget get their money back when things went wrong, without having to go to court. We also suggest that regulators should take a proactive role in getting customers their money back if they become aware of widespread problems with a particular company, industry or product.

As well as helping people to get their money back, we argued that regulators should be doing more to stop people having problems in the first place by monitoring customer service and satisfaction levels. For example by making sure that people who are struggling to pay their bills are not harassed, but given a “breathing space”: an agreed period of time when charges and fees are not added to their debts so they can get advice and begin to sort out their money problems.

People with debts are often not allowed to switch to cheaper deals, even though this would help them financially. This means that regulators cannot solely rely on customers switching to the best value deal, and the competition this generates, to increase the quality of essential services. We recommended that regulators should have stronger powers to enforce fair treatment of the most vulnerable people who cannot, or do not, switch providers.

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“I wish to thank your staff for all the great help they gave me when I was in so much debt.
They were a pillar of support to me.” (Leslie, Essex)

Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

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© StepChange Debt Charity 2016