Business, Innovation and SkillsWritten evidence submitted by Keep Me Posted Campaign

1. The Keep Me posted campaign welcomes the opportunity to respond to the Business, Innovation and Skills Select Committee’s pre-legislative scrutiny of the draft Consumer Rights Bill. We note that submissions dealing with additional points, or points arising from the specific drafting of the draft Consumer Bill, or from those who did not engage in the consultation process, will be welcome by the Committee. The Keep Me Posted campaign was launched in June 2013, after the draft Consumer Rights Bill was published. We did not have the opportunity to submit views to the Government’s original proposals and this submission therefore raises additional points not captured in the draft Consumer Rights Bill.

About the Keep Me Posted Campaign

2. The Keep Me Posted campaign is a partnership of charities, consumer groups, membership organisations and businesses. We have come together as we believe we have a responsibility to fight for the consumer’s right to choose how they receive important information such as bills and statements.

3. Keep Me Posted believes that it is every consumer’s right to choose, without disadvantage, how they are contacted by banks and other financial service companies, utility companies, media companies and other service providers. Increasingly businesses are restricting access to paper bills and statements and denying their customers an informed choice. Members of the Keep Me Posted campaign are united by a belief that consumers should be given a genuine choice as to how they receive important information such as bills and statements and whether they receive this in a paper or digital format.

4. The Keep Me Posted campaign is not anti-digital. The move to digital services has led to greater access, control and freedom for many consumers and the campaign is fully supportive of this. However, we recognise that in doing so there is an unintended consequence: the marginalisation of those consumers who are not able or would prefer not to access information in a digital format only. Consumers particularly affected include those who lack basic digital skills, the disabled, individuals in rural areas with no or limited access to broadband and those who cannot afford computers or access to the internet on a regular basis.

5. The Keep Me Posted campaign is calling for organisations to offer consumers the right to choose by adopting the campaign’s six point pledge:

(a)offer all of their customers the choice of receiving information through paper correspondence as part of any standard offer;

(b)refrain from penalising in any way, any customer for preferring to receive information through paper correspondence;

(c)only cease the sending of information in paper correspondence to a customer after (and not before) the customer has specifically, voluntarily and individually opted out of receiving information on paper;

(d)only change the frequency of information sent to customers in paper correspondence after (and not before) the customer has specifically, voluntarily and individually agreed to the change;

(e)refrain from making the availability of online information to customers necessarily conditional upon having to give up their access to paper correspondence; and

(f)make available to customers easy mechanisms whereby a customer who has chosen not to receive paper correspondence can opt back in without penalty.

6. Members of the Keep Me Posted campaign include: Mind, RNIB, the National Federation of Occupational Pensioners, the National Consumer Federation, the Civil Service Pensioners’ Alliance, the Post Office, the National Pensioners’ Convention, the National Federation of Retired Police Officers, Zero Credit, Two Sides, as well as UK postal operators Royal Mail, TNT Post and UK Mail.

The Keep Me Posted Campaign Views on the Draft Consumer Rights Bill

7. As a consumer focussed campaign, Keep Me Posted welcomes the draft Consumer Rights Bill and its objectives of protecting the interests of consumers. We particularly support the intentions to reform consumer legislation which will clarify the law where it is confusing; modernise the framework for the digital age; and enhance measures to protect consumers, where it is appropriate to do so.

8. While we support the objectives of the draft Bill, we believe the Bill and reform of UK consumer legislation provides a unique opportunity to provide a statutory guarantee for consumers as to how they receive their bills and statements. We believe the Bill should be amended to guarantee consumers the right to receive bills and statements by post or in a digital format, without being penalised for that choice. We note that the Government’s consultation on the draft Bill refers to confident consumers which are vital to building a stronger economy—we believe an amendment to the Bill that guarantees choice as to how they receive bills and statements would bring a number of benefits to consumers.

9. In the interest of providing an accurate depiction of consumer needs, the Keep Me Posted campaign commissioned Opinium Research to produce a definitive independent research report which marries long term insight with up to date consumer polling and qualitative analysis of terms and conditions. The full summary report is enclosed with this written submission and can be found online.1

10. The Keep Me Posted campaign research found that consumers want the choice of how they receive bills and statements and are less likely to handle their finances without it:

81% of consumers think it is important to have the choice in how they access financial information and statements from all service providers.

Asked about the impact of losing paper statements, 44% believed said their financial records would be incomplete and 41% worried that they might miss a payment.

56% agree that they would be more likely to read a paper statement compared with an online statement and 49% said they would be more likely to take action from a paper statement.

11. In addition to consumers wanting this choice, the move to digital affects those without access to the internet or the digital skills. ONS data from 2012 reveals that 7.1 million adults (15%) in the UK have never used the internet. Go-On UK estimate that 16 million consumers aged over 15 do not have basic online skills. Our research also reveals that often the most vulnerable members of society are those most dependent on traditional, postal transactional mail. The move to an online-only society risks leaving the elderly, disabled, rural and those on low incomes disenfranchised. For example:

53% of those who have never used the internet are disabled, equating to around four million Britons representing 41% of all disabled people.

49% of people without access to the internet are in the lowest socio-economic groups (DE).

Older consumers demonstrate a preference for use of paper correspondence with up to eight in 10 adults aged 65 and over and nine in 10 adults preferring postal statements.

In rural areas the preference for postal bank statements is six in 10 adults.

Carers rely on paper statements when managing the transactional mail of the person they care for.

12. There are also hidden consequences for consumers where choice in this area is not guaranteed:

Banks do not provide access to online statements beyond a certain timescale which makes it difficult to easily access older statements and there is a risk that if a customer changes bank or utility provider they lose their historical data.

Copies of online statements are not considered official documents by many institutions (such as banks and building societies) and consumers may have to pay a fee for an official copy.

Access to information can be compromised in the event of any technological failures—such as bank IT systems failing or broadband/phone signals being down.

Those who need assistance with managing their affairs find themselves at risk with having to share online passwords.

Some organisations, such as energy companies, provide online only tariffs promising cheaper energy to customers managing their accounts online.

13. A wide range of consumers is affected by this issue; independent research carried out on behalf of the Keep Me Posted campaign shows the extent to which companies are now moving consumers to online only billing.

Independent research of company practices carried out on behalf of Keep Me Posted found:

Nearly two thirds of utility companies (gas, electricity and water) communicate with their customers via online only methods.

Seven out of ten media companies communicate with their customers via online only channels as default, with only two of the 10 providing a choice upfront of whether to receive transactional mail or not.

One high street retail bank has recently announced it will provide new customers with online only statements from October 2013.

The majority utility and media companies have stopped issuing paper statements by default and apply charges when print statements are required.

14. The Keep Me Posted research is clear that a wide range of consumers are affected by this issue. A lack of choice limits consumers’ ability to manage their finances; vulnerable consumers and those without access to the internet or digital skills are impacted by this issue; and there are number of hidden consequences for all consumers for this lack of choice. This, added to the extent to which consumers are now being moved to online billing, leaves a huge gap in consumer legislation where consumers’ rights are not being protected. In addition, analysis of current regulation by the Keep Me Posted campaign shows there is no existing regulation that guarantees consumers this choice.

15. To combat this, Keep Me Posted believes an amendment to the draft Consumer Rights Bill to ensure a statutory guarantee in consumer law that gives consumers the choice, without penalty, as to how they receive their bills and statements would help to protect the rights of all consumers.

16. In addition to protecting consumer rights in this area, we believe an amendment would have economic benefits too. The Government’s response to consultations on consumer rights2 refers to the economic rationale of simplifying and reforming consumer law. The research from the Keep Me Posted campaign (see paragraph 10) shows that consumers who have a choice as to how they receive their bills and statements are better able to manage their finances. The campaign has also been contacted by a number of consumers citing examples where they pay more for being penalised for not purchasing goods and services online. For example, a Senior Railcard for over 60s costs £30 for one year—or £70 for three years, a saving of £20. However a three-year card can only be bought online—excluding millions of pensioners who do not use the internet. Some energy suppliers are offering discounts of up to £300 a year for customers signing up for online-only gas and electricity tariffs, leaving those who do not have the internet or do not have the skills to use it at a financial disadvantage. These practices disadvantage some of the most vulnerable consumers.

17. Finally, the Government’s response to consultations on consumer rights3 states that “markets can only be fully competitive if consumers are active and confident, meaning that they are willing to challenge firms to provide a better deal, switch between suppliers, and take up new products” Given that the number of consumers who are not online is so significant (see paragraph 11), we believe empowering them with a right to choose and not to be penalised, would allow this significant number of consumers to be more active, willing to challenge firms to provide a better deal, switch between suppliers and take up new products.

27 August 2013