The UK Regulators’ Network has today launched an advisory leaflet to help ensure vulnerable consumers get the help they need to access essential services.
Produced through a collaborative effort between Ofgem, Ofcom, Ofwat, the ORR and the CAA, the leaflet highlights a range of free support services offered by utility, telecommunications and public transport providers.
The UKRN website gives details of how to get braille, audio and large print versions of the leaflet.
On 17 December 2015, Ofgem published its final proposals for the Priority Services Register, considered integral to its consumer vulnerability strategy. The aim is to ensure that existing services relating to safety, access and communication in the energy market meet the needs of consumers in vulnerable situations.
Priority Services Register Review – Final Proposals
The consultation closes on 18 February 2016.
On 15th April 2015 ESAN, Citizens Advice and Money Advice Trust joined forces to host a conference on practical steps towards effective implementation of vulnerability strategies. Over 70 delegates from firms, regulators and voluntary organisations across financial services, energy, water and communications attended.
The theme of the day was practical and designed to be helpful to firms rather than concentrating too much on theory and definitions. Many common themes that relate to all sectors emerged – around the multi-dimensional nature of vulnerability, how a risk-factor approach rather than categorisation can help, the importance of staff correctly picking up on triggers at the first point of contact, staff training, and maintaining excellent links with advice and voluntary sector groups were all key issues. Three firms presented case studies on their experiences of developing ways of treating customers in vulnerable circumstances better. FCA, Ofcom, Ofwat and Ofgem all outlined their developing plans in this area.
A background paper on the relevant issues can be found here:
Tackling Consumer Vulnerability Briefing Paper
Presentations can be found here:
Linda Lennard CCES ESAN Consumer Vulnerability presentation
Martin Coppack FCA ESAN Consumer Vulnerability Presentation
Garreth Cameron ICO – ESAN vulnerability presentation
Money Advice Trust ESAN vulnerability presentation
Wessex Water ESAN vulnerability presentation
Steve Crabb British Gas ESAN vulnerability presentation
Citizens Advice have carried out a benchmarking study into British Standard for inclusive service provision (BS 18477). Find the full report, titled Treating consumers fairly, here.
To accelerate the rate of uptake of the Standard and support companies’ endeavours to become more inclusive, Citizens Advice (Consumer Futures) commissioned independent research consultancy, Opinium Research LLP to conduct a benchmarking study of three organisations that are directly or closely linked to Citizens Advice and provide free help concerning advice and redress for energy consumers:
- the Citizens Advice consumer service (the consumer service)
- the Ombudsman Service: Energy
- the Extra Help Unit.
All three organisations operate towards the end of a consumer journey – they deal with the consequences of decisions (or indecisions) of other organisations or companies.
We believe that all companies’ key aims – particularly those companies providing essential goods and services – should include the provision of fair and flexible services to their consumers. We consider that the time has arrived for a transparent cultural shift whereby organisations:
- reframe their perspective
- change the way they think about consumers and their business
- build ‘long-term relationships’ with consumers; ‘earning their trust and then their business’, to become ‘social leaders’.
A more inclusive approach would benefit all consumers. It could particularly benefit those experiencing vulnerability, as well as improving organisations’ own brand, reputation and employee confidence and satisfaction. In turn, this would benefit society and the wider economy.
A demonstrable organisation-wide commitment to providing services that are fair and accessible to all underpinned all the examples of good practice. The experiences of these organisations suggest that developing a broad, flexible understanding of vulnerability and its impact on the consumer is the critical first step in becoming a fair, inclusive and accessible organisation.
But before an organisation can consider how it should respond to vulnerability, it must first ensure its staff can identify it. For the three participating organisations, training played a crucial role in ensuring that staff:
- can identify or elicit evidence of vulnerability and
- possess the necessary “soft” skills for dealing with consumers in such circumstances.
Ofgem is reviewing its work on priority services.
Consultation closes 22nd September 2014. Read more here.
Gas and electricity are essential services. Providing extra services to people who need them to access the market and stay safe remain critically important. This consultation seeks views on proposals that require suppliers, electricity distribution network operators and gas distribution networks to:
•provide additional non-financial services to energy consumers who are more likely than a typical consumer to experience problems with communication, safety and supply;
•take reasonable steps to identify people who would benefit from these services;
•share consumer information with each other and other utility companies, using vulnerability indicators agreed between them;
•raise awareness of services, including developing a single cross-industry brand; and
•conduct annual independent audits of their performance and publish findings yearly
The Keep me Posted campaign have carried out research with the Centre for Economics and Business Research (CEBR) into the additional costs of being offline, which shows that people who are not online pay £440 more per year. Read more here.
• Households who do not use the internet pay an average of £440 more a year for their goods and services, equivalent to 4.4 per cent of their average household income
• This equates to 5.4 per cent of the average household income for older people aged 65 plus and the most vulnerable people in society
• Households that cannot take advantage of lower energy and telecoms tariffs for switching to online-only services miss out on a potential annual saving of £139
• 7 million people in the UK have never used the internet, with the vast majority (72 per cent) being the poorest 10 per cent in society
• Almost half (48 per cent) of those 65 years of age and over have never used the internet
The FCA said 45,000 customers of the UK’s biggest payday lender would be compensated after it found that letters threatening legal action from non-existent law firms had been sent to customers, in an attempt to boost collections by increasing the pressure on people in debt. In some cases customers had been charged for the letters.
The practice ended four years ago before the FCA had responsibility for payday lenders and credit, so it does not have powers to fine Wonga. Which? welcomed the tougher line being taken by FCA on irresponsible lending. The FCA stated that it “expects firms to pay particular attention to fair treatment of those who have difficulty in meeting their loan repayments”.
Following an investigation E.ON has agreed to pay £12m to vulnerable customers, after Ofgem found it had broken energy sales rules. E.ON has also committed to compensating any customer that it missold to, including automatic payments to some vulnerable customers.
Read more from Ofgem here.
The agreed redress package reflects the harm caused by E.ON’s extensive poor sales practices carried out between June 2010 and December 2013.
As part of this package E.ON has agreed to:
•Pay around £35 to 333,000 of their customers who are normally recipients of the Warm Home Discount. This redress package will benefit pensioners, disabled and low income families
•Additionally, make automatic payments to some vulnerable customers who may have been affected by E.ON’s poor sales practices
•Set up a dedicated hotline 0800 0568 497 and compensate all consumers that it missold to
•Write to around 465,000 customers it has identified through its redress work, informing them of how to get in touch to find out whether they were missold to.
Shelter warns that almost 4 million families are living without any safety net.
Some 3.8 million families have only enough money to pay their rent or mortgage for a month if they lose their jobs, the housing charity has said.
Shelter, which surveyed 7,500 people, said high housing costs and stagnating wages meant many were living on a financial knife-edge.
Shelter’s findings were based on a YouGov survey of 7,500 adults who pay rent or a mortgage. It says 44% of working families with children under the age of 18 could be one paycheque away from losing their homes if they became unemployed because they have little or no savings.
Its researchers also found that 29% of families would immediately be unable to afford to pay for their home if they lost their income.
Read more here.
The review looked at how firms treat customers in arrears or financial difficulty. This is of particular concern as the possibility of interest rate rises looms. The review finds that arrears management in firms has improved since the last review. However, mortgage lenders and administrators need to place greater emphasis on delivering consistently fair outcomes for customers based on their individual circumstances.
FCA is working with industry to help them improve their practices. This includes better support and empowerment of front-line staff and greater flexibility to support fair treatment of individual customers, based on their specific personal and financial circumstances. FCA also wants firms to take proactive steps to identify borrowers who could be susceptible to potential interest rate rises and have strategies to treat these customers fairly.
Read more here.