Consumer empowerment: global context,UK strategies and vulnerable consumers

Globalization has created new consumer needs and wants, and resulted in consumer confusion regarding the increasing complexity of products and services. This has stimulated global interest in educating and empowering consumers. The UK government has made a very ambitious commitment to ensure that the framework for consumer empowerment and support is at the level of the best in the world by 2008. The government, many consumer organizations and regulators believe that empowered consumers are key to the success of competitive markets. Two national strategies to co‐ordinate activities in the UK have been developed by the Office of Fair Trading (OFT) and the Financial Services Authority (FSA). The OFT consumer education strategy aims to deliver targeted, effective consumer education by increasing co‐ordination and making the best use of available resources. The FSA is leading a financial capability strategy designed to deliver change to improve the UK's financial capability. Both strategies share a vision of educated and confident consumers making informed choices about the products and services they buy, and both aim to empower vulnerable consumers. Given the global interest and the development of national strategies, it is useful to consider what is meant by the term consumer empowerment. Is there a shared view of consumer empowerment internationally? Does the education of consumers result in empowered consumers? To what extent do the national strategies address the empowerment of vulnerable, disadvantaged, excluded or susceptible consumers? These questions will be addressed in this article which reviews the global context for the consumer education and empowerment agenda and considers key UK developments, with particular reference to the needs of vulnerable consumers. The study found that the language of consumer empowerment is gaining prominence in policy and strategy documents at the highest levels internationally in the Organisation of Economic Cooperation and Development and the European Community, and nationally in the UK.     

Vertical Integration and Competition Policy

Vertical integration can be a source of significant strategic advantage for firms, whether in the form of backward integration to gain security of some important supply or of forward integration to ensure adequate distribution of products or services. It may have profound effects on the competitive processes in an industry, substantially modify the threats from new entrants or substitute products, and mitigate the power of suppliers or buyers. Yet for exactly these reasons, vertical integration causes great concern to competition authorities. A number of consumer products markets with vertical ties have caused such disquiet to the UK's Office of Fair Trading (OFT) in recent years that they have been referred to the Monopolies and Mergers Commission (MMC) for further investigation. These include beer, petrol and soft drinks. The three cases illustrate the nature and importance of the strategic advantage derived from vertical integration. They also illustrate the concern competition authorities feel about vertical integration, and provide lessons for firms regarding the objections that may be raised towards their trading arrangements.     

Editorial to the special issue on drowning prevention

The average citizen is now demanding more and more quality of and information on the various products that every day life requires. This concerns an extremely broad range of consumer products. Within the European Union, the European Commission (Directorate General Health and Consumer Protection (SANCO) plays a leading role in assuring and controlling the high quality of consumer products. It is known that there are a number of potential risks associated with the use of those products, as shown by the high number of unintentional injuries occurring every year. Therefore, national and international authorities and other instances need access to information for the promotion of safety and for the prevention of accidents. Tools have been made available to the Member States by the European Commission for the completion of a safe internal market of consumer products. Among those, databases have the advantage of being able to store a huge amount of information that can be classified according to real needs, hence serving the citizens. Such availability is immediate if they are deployed on the Internet. Moreover, this has the major advantage of allowing feedback from the users, thus contributing to its improvement. Consequently, a relational database on the safety of consumer products has been set up within the framework of an agreement between Directorate General SANCO and the Joint Research Centre of the European Commission: the Consumer Product Safety Database (CPS). The objective of this database is to complement the setting up of a common system of exchanging information on consumer products within the framework of the application of Directive 92/59/EEC. The CPS database gives people concerned with consumer safety information that has never been gathered together before. Hence, this tool can contribute to the creation of a safer market for consumers in accordance with the Union’s legislation, as well as facilitating the decisions of Directorate General SANCO regarding consumer products.     

The Baltic Model for the Settlement of Individual Consumer Disputes

The aim of this study is to assess the possibilities consumers in the Baltic countries have to fulfil their rights in individual consumer disputes by using different forms of alternative dispute resolution. Special attention will be paid to the relation between the existing alternative dispute resolution (ADR) systems and the European Commission's Recommendation 1998 on ADR. The main finding is that in all three countries individual disputes are settled by the same consumer authorities which are also protecting consumers' collective interests. The system resembles in many respects the Nordic model but there are some significant differences. These differences give good reason to speak about the "Baltic model," which differs from all systems existing in the EC Member States. The most remarkable difference is the right to impose administrative sanctions if a trader refuses to comply with a decision which a consumer authority has made with respect to an individual consumer dispute. The basic structure of the Baltic model does not clash with the principles of the EC Recommendation on ADR adopted in 1998. On the contrary, in practice the Baltic model gives better guarantees for consumer access to justice in individual disputes than many systems used in the Member States.     

Wie die deutsche Einheit die Länder im Finanzausgleich belastet hat

In Germany there is a political consensus that the economic and fiscal burden of the German reunification should be shared by all three jurisdictional levels of the federal system. According to existing law, the burden-sharing between the state and local authorities has to be confined to the excess burden which follows from the financing of the German Unity Fund as well as the integration of the eastern German states into the fiscal equalisation system. State and local authorities are in conflict with each other regarding an appropriate economic estimate of the excess burden to be caused by the fiscal equalisation system. Against this background, the paper estimates the average excess burden of the western German states as a whole as well as individual excess burdens of selected German states for the time period 1995 to 2009 by applying a multivariate data analysis.     

Are Consumers Disadvantaged or Vulnerable? An Examination of Consumer Complaints to the Better Business Bureau

Questions have emerged recently about the appropriateness of defining disadvantaged consumers based on their membership in certain demographic categories, such as income, age, education, and race. This study assessed whether these traditional classifications are useful for understanding consumer complaining behavior with the Better Business Bureau. Results of analysis of more than 24,000 consumer complaints filed with a local BBB office during a 13-year period do not provide consistent support for this disadvantaged consumer perspective. Instead, the emerging vulnerable consumer perspective may provide a more promising basis for future research.     

The right to be heard and to be understood: a conceptual framework for consumer protection in emerging economies

In many emerging economies and developing countries, comprising consumers from different cultures and with varying degrees of sophistication (knowledge and skill) concerning consumer protection, the promotion of consumers' rights to develop a consumer‐oriented culture remains a very big challenge. One way of protecting the consumer, especially the consumer that has not been fully socialized to execute informed decisions when purchasing expensive durables, is by establishing a redress environment that would ensure fair redress as well as an understanding and appreciation of the consumer. Manufacturers and retailers are often not aware of the performance failures that consumers experience concerning their products because many people do not communicate their dissatisfactions to them. However, unless and until manufacturers and retailers fully comprehend their customers' complaint behaviour, their reasons for engaging in specific complaint behaviour and the reasoning (cognitive processes) and emotional processes behind their behaviour, they will not recognize the link between complaint handling and customer loyalty and profits. The purpose of this paper was to develop a theoretical conceptual framework that would enable consumer scientists, consumer consultants, consumer behaviour researchers and those with the responsibility of handling consumer complaints to explore and understand consumer complaint behaviour in its entirety. We argue that, to be able to establish and manage a redress environment that is characterized by an understanding of the specific consumer as well as by effective complaint behaviour handling, it is of the utmost importance that the manufacturer, retailer, consumer consultant and all those that work with consumers' complaints understand the entire complaint process, including the underlying cognitive and emotional processes as well as the consumer's post‐complaint perception of justice and his/her satisfaction with the complaint handling. It is also important to understand the role that consumer‐, product‐ and redress environment‐related variables play in consumer complaint behaviour. The consumer who blames the retailer for the problem and who probably feels angry about the situation and decides to complain will expect redress. From a consumer's viewpoint, complaint‐related justice is, however, not only a matter of economic calculus but also a matter of procedure and interaction. We therefore argue for a holistic approach where consumer complaint behaviour is addressed in its entirety. Practical suggestions that could enhance customer satisfaction are given for manufacturers, retailers and those who deal with consumers' complaints.     

Consumer trust relations with payment cards and banks: an exploratory study

The article focuses on the ways in which consumer complaints reflect the trust relationship between consumers, payment cards and banks from the consumers' point of view. The empirical data consist of consumer complaints from Finland and are analysed with qualitative method. The data show that consumers use payment cards in various places for different purposes at home and abroad at least until something unexpected and problematic happens. According to the consumer complaints, in problem situations, the banks blame the consumers and categorically deny their responsibility. Negligence on the part of the consumers and questions concerning technology are the major reason for distrust concerning the reliability of payment cards. These findings provide bases for practical guidelines to increase trust in payment cards and, finally, implications for consumer education are discussed.     

Opinions about advertising in Australia: a study of complainants

Advertising expenditure has risen globally and in Australia there has been a 2.7-fold rise in the last 10 years. It is suggested that some advertisements may be ‘unacceptable’, that is unfair, misleading, deceptive, offensive, false or socially irresponsible. Industry and regulatory responses to consumer complaints about these problems must be addressed. This research is concerned with consumer behaviour and consumer complaint behaviour specifically in the area of advertising in Australia. The general findings from the reviewed literature indicated that complainants tend to be older, have attained higher levels of educational qualifications, earn a higher gross weekly income, possess greater degrees of wealth, have higher participant levels of local community involvement and, in general terms, have more resources to avail themselves of in order to allow them to take action when dissatisfied. The results from this research engender a better understanding of the complaining public. Empirical analyses were used for determining the characteristics of people who complain to the Advertising Standards Board and inferred that their opinions regarding advertising differ from members of the general population in four key areas. This research will afford regulatory bodies a better understanding of the complaining public as well as educating marketing communications strategists in effectively reaching their target markets.     

Home in Balance

Abstract

OBJECTIVE For market control to be successful, two conditions have to be fulfilled. The first is that the authorities succeed in collecting sufficient data on the products and their safety hazards. The second condition is that, after finding a hazardous product on the market, the authorities have sufficient means and methods available to make the manufacturer or importer repair the product or withdraw it from the market. In Finland, the product safety authorities have organized market control in practice through local control authorities, aiming to reach a common goal by means of cooperation. The aim is to clear up and further develop the control of the products placed on the market. The ‘field control’ and testing of the products should form a well-functioning whole. Market control activities must be escalated. There is a need for a common control practice.

METHODS The guidance and training of local authorities is the key element. In order for market control to function efficiently, the local control bodies should be given detailed guidance on all aspects of the products to be controlled, the methods of control and the reporting, feed-back and exchange of information. The motivation of the control bodies is also important. The method used in Finland is to choose a few product groups at a time, each of them being subjected to a short-term control according to the instructions of the leading control authority.

RESULTS In 1992 five product groups were inspected. These were chocolate eggs containing a surprise toy, the fire safety of upholstered sitting furniture, markings on toys, the amount of formaldehyde in textiles and markings on heat candles and lanterns. The number of inspected market places totalled 1268 and that of inspected samples 1919. The control measures used were oral remarks, written demands for changes, product specific instructions and others, which amounted to 1093. In the spring of 1993 four product groups were inspected, namely the markings on jacks, chocolate eggs containing a suprise toy, the markings on cosmetic products (shampoo, hair care, and shower gel) and the markings on toys. In total, 2370 market places

CONCLUSIONS Market control has had a favorable reception at the local level, perhaps because the need for this kind of guidance and training has been so evident. This has helped the authorities to chart the various problems of market control, which is assumed to increase the efficiency of the control. In addition, the local authorities have gained much valuable experience, which will be of great assistance when developing market control into a uniform and commensurable system. The leading control authority must know the results of the control in order to be able to set priorities for its activities and to have a truthful picture of the market situation. What is the best way of organizing continuous collection of control data at the local level is a question that must also be solved.     

Consumer advocacy: Examining the feeling and doing following a failed service encounter

Dissatisfactory service experiences and consumer complaints following such experiences are everyday occurrences. Prior research has not only examined the emotions experienced because of failed service encounters but also has explored the resultant behaviours towards the service provider and the service. However, prior research does not distinguish between negative word-of-mouth (NWOM) motivated by marketplace-helping behaviour such as consumer advocacy and NWOM as venting triggered by emotions such as anger and frustration. The current study examines the direct relationship between regret and disappointment and consumer advocacy. Unlike past studies, the current study explores two types of customer dissatisfaction: agent based and outcome based. Study 1 uses a vignette methodology, and Study 2 uses experience sampling in which respondents provide personal episodes of failed service encounters. In contrast with a previous proposition, we find that regret has a significant negative relationship with consumer advocacy. Disappointment based on external events demonstrates a significant positive relationship, whereas disappointment caused by another person has a weaker relationship with consumer advocacy.     

Any complaints? A review of the framework of self-regulation in the Australian advertising industry

Prior to 1996, the Australian system of advertising self-regulation was regarded as a world model and many Asia-Pacific systems included components adapted from the Australian system. The recent changes to this system, encouraged by the abolition of the media accreditation system, consumer association pressure, criticism from the national advertisers association and the lack of a strong advertising agency presence, present an interesting framework in which to review the foundation concepts of self-regulation in advertising. This paper compares the new code of ethics with its predecessor and an international standard. It examines the performance of the code in terms of the number of complaints upheld and complaint by medium and product type and the voluntary response of advertisers. The findings suggest a weakening in the standard of advertising self-regulation in Australia, with fewer provisions in the Code of Ethics, a significantly fewer number of complaints upheld and no real power of enforcement. Although the case is Australian, it raises universal questions such as the vested interest of advertisers in controlling the process and roles of the consumer association, the media and the advertising agencies in guaranteeing the privilege of self-regulation.     

Policies and practice in Denmark and Sweden

Abstract: Danish laws regulating banking and financial services organizations have no consumer protection provisions, although there is one law regulating a particular kind of payment instrument, the Payment Cards Act. However, general consumer protection law applies to banks and other financial services organizations, as well as other kinds of business. In particular, the Marketing Practices and Price Marking and Price Display Acts give responsibilities to the consumer ombudsman. This legal framework is complemented by guidelines issued – after consultation – by the consumer ombudsman, for example on conduct of business in bank advice, mortgage business and distance selling involving payment cards. The Danish system may be summarized as providing for standards of business behaviour laid down in general terms by law, backed by a supervisory authority with little power of coercion but playing an important role in influencing businesses to adopt high consumer protection standards and in negotiating solutions to problems as they emerge. The Swedish system is generally similar, but less advanced in the use of guidelines for the conduct of business. Both countries provide consumers who have unresolved complaints with easy access to alternative dispute resolution systems and the courts are rarely used to establish case law.     

The HASSLE Scale

Abstract

Retailers can respond to consumer complaints of perceived problems in many different ways. The response chosen by the retailer, as well as the time and effort exerted by the consumer, can influence consumer satisfaction/dissatisfaction (S/D) with the complaint resolution process. Results suggest that consumer S/D with the complaint resolution process has four critical dimensions. The two consumer input dimensions are consumer time and consumer effort expended in an attempt to resolve the problem. The two outcome dimensions are compensation received and attributes of the retailer's representative.     

Consumer complaints and redress: an important mechanism for protecting and empowering consumers1

This paper explores a consumer complaint programme as a tool for empowering consumers, using the consumer complaint programme of a United States federal agency as a case study. After describing the structure and role of the Federal Reserve System (the central bank of the United States) in handling complaints, the paper follows a complaint through the System, looks at trends in complaints and provides a profile of consumers who complain. The paper concludes with information on the economic impact of complaint resolution and consumer satisfaction with third‐party complaint investigation.     

Consumer expectations and the communications gap: Causes of consumer dissatisfaction

Despite steady improvement in product quality and values, consumer complaints and demands for protective legislation are more common than before. The rising expectations of consumers are a main cause of consumer irritation, and exaggerated promotional information contributes to these rising expectations. The remedy for consumer dissatisfaction is to narrow the gap between consumer expectancy and perceived product performance, primarily by reducing exaggerated expectancy. More careful and thorough monitoring of consumer satisfaction levels can help reduce consumer dissatisfaction. Three guidelines are suggested for dealing with discrepancies between consumer expectancy and product performance.     

Consumer education in the UK: new developments in policy,strategy and implementation

Consumer education is an integral part of the European Community's consumer policy. It plays a key role in consumer empowerment, helping consumers gain the skills, attitudes and knowledge they need to be able to gear the choices they make as consumers to their economic interests and to protect their health and safety. In its policy statement, the Directorate General for Health and Consumer Protection states that the European Community is aware that joint measures at national and Community levels should be more structured, in order to achieve maximum effectiveness. This paper aims to set out the current policy and strategic context for consumer education and empowerment in the UK; review the role of UK government bodies and other agencies concerned with developments; review recent literature; present the results of interviews with an extensive range of key stakeholders and the results of a survey of service heads for trading standards throughout the UK. It will consider implementation, partnership, resources, ideas and opportunities. The research found that the agenda for consumer education in the UK is at an interesting stage of development. The Enterprise Act 2002 gives the Office of Fair Trading (OFT) a statutory power to carry out educational activities. Consumer education is also moving up the agenda in the trading standards service. In addition, the teaching of citizenship in English schools is already stimulating new developments in consumer education. The paper will consider the need for organizations like these to work together to build on these policy developments and ensure that consumer education gains the profile it needs to influence consumer attitudes and behaviour.     

人工智能时代个性化定价行为的反垄断规制--从大数据杀熟展开

人工智能时代,数据规模显著扩张,算法能力持续优化。科技实力雄厚、市场力量强大的经营者凭借大数据与算法工具的紧密结合,收集和分析能够反映消费者特征和行为的相关信息,以无限接近消费者购买能力和支付意愿上限的方式对消费者实施个性化定价。个性化定价行为涉及对条件相同的交易相对人在交易价格上实施差别化待遇,可能构成反垄断法所禁止的价格歧视行为。但与以往反垄断实施重点关注的排他性价格歧视不同,个性化定价突出表现为直接针对终端消费者实施的剥削性价格歧视,且在具体情形下呈现出不同的限制竞争效果,引发消费者选择能力与选择范围的双重限制。鉴于此,个性化定价行为的反垄断规制需要准确识别涉案行为,综合判断竞争效果,慎重选择福利标准。对于同时降低消费者剩余和社会总福利的个性化定价行为,可认定其具有限制竞争效果且不具备正当理由,从而构成违法价格歧视;对于降低消费者剩余却提高社会总福利的个性化定价行为,如果选择消费者福利标准则可认定其构成违法价格歧视,如果选择社会总福利标准则可认定其具备正当理由;对于同时提高消费者剩余与社会总福利的个性化定价行为,因涉及消费者之间的剩余转移,对其竞争效果的评价仍待反垄断实施予以明确。