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Better Choices Better Deals - New strategy to empower consumers

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BIS Department for Business Innovation and Skills - Expert Author

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Issued  13 April 2011 - BIS

A radical new approach to give more power to consumers in their relationships with business, was announced today.

Under the plans announced by Edward Davey businesses will provide key information to their customers on how they use and buy goods and services. This will help people get the best deal possible, and make business more dynamic in response.

The new approach is published in Better Choices, Better Deals: Consumers Powering Growth and marks a shift away from legislating to make change happen. Instead it announces new ways to help consumers help themselves and challenges business to innovate, which in turn will drive growth in the economy.

Edward Davey said:

“This is an important new initiative that will radically change how consumers relate to business. By giving you more power in your relationship with businesses you will be better placed to get the deal you want, and that deal may put a bit of money back in your pocket.

“This will in turn reward the most competitive and innovative businesses.”

The Government is on a relentless drive to support economic growth and rebalance the economy. The Plan for Growth, published last month, is a mixture of practical actions, investment and longer term work to remove barriers, stimulate growth and secure the UK’s position at the forefront of innovation.

Part of the initiative published today will be a project called mydata, which will assess how to give people their personal data in a format that is safe to pass onto third parties, such as price comparison sites. If an application or website can pick out the one perfect deal based on your user information, this will help to make consumer choices simpler.

For example, there are 12.7 million different phone deals to choose from, and a recent survey from Billmonitor shows that the average mobile phone user overspends by £200 a year. Using the personal data a phone company holds, such as whether a customer uses all their minutes or exceed their internet allowance, could help consumers to find a better deal.

Edward Davey said:

“This project is not about seeing how many minutes you can get for £10- it’s whether you use £10 worth of minutes in the first place.”

Consumers will also be able to work with businesses and other organisations on a larger scale:

The Government expects regulators, Departments and public service providers to release more information about complaints and performance data and will launch a competition to support new ways of using this data; The Department for Business, Innovation and Skills will work with Community Organisers to encourage collective purchasing deals and launch an Innovation Prize with Co-operatives UK to reward innovative new ideas on collective purchasing, with a fund of up to £30,000 to award in grants;The Behavioural Insights Team will pilot a green collective purchasing scheme with B&Q;BIS will support the development of a self-regulatory quality mark for web and comparison sites; andThere will be a new resolution scheme for e-commerce disputes

The Government also wants to ensure everyone has access to better choices, and is asking for a review by Citizens Advice and Citizens Advice Scotland, with Consumer Focus, into how to empower the most vulnerable.

Gillian Guy, Citizens Advice Chief Executive said:

“Citizens Advice is an active champion for consumers, so we are thrilled to be part of this new consumer empowerment strategy. In particular we are really pleased to see recognition that in new technology is not good news for everyone. Some vulnerable groups can be excluded from best value deals and methods of redress. We look forward to helping ensure that provision for consumers really is inclusive and services and products are equally available to all.”

Christine Farnish, Chair of Consumer Focus, said:

“It’s good news that Government is looking at how more powerful consumers can create more effective markets and public services. While there are companies who want to provide better value and service, the truth is that if you don’t have demanding consumers, then you won’t have responsive markets.“

Richard Thaler, co-author of Nudge: Improving Decisions About Health, Wealth, and Happiness, said:

“This approach will give honest, high quality firms an edge in their battle with competitors who use obfuscation as their chief marketing strategy. Simple electronic disclosure is not costly for large firms to provide, and can provide enormous benefits to consumers. Eventually, this approach has the potential for replacing much more intrusive and burdensome regulations that firms inevitably find ways to evade.“ 

Notes

1. The report Better Choices: Better Deals from the Department for Business, Innovation and Skills (BIS) and the Cabinet Office’s Behavioural Insight Team (BIT) can be found here. http: //www.bis.gov.uk/policies/consumer-issues/consumer-empowerment. The strategy complements but does not replace existing consumer regulation. A separate document consulting on changes to publicly funded consumer protection will be published shortly.

2. The public are invited to leave feedback to BIS and BIT on the strategy here: http://www.bis.gov.uk/policies/consumer-issues/consumer-empowerment

3.The report is split into four sections:

The Power of Information The Power of the Crowd.Support for the Vulnerable. A new role for Business and Government.

4. The Billmonitor report can be found here: http://www. billmonitor.com/national-billmonitor-mobile-report


About the Author

© Crown Copyright. Material taken from the BIS Department for Business, Innovation and Skills. Reproduced under the terms and conditions of the Click-Use Licence.



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Article Published/Sorted/Amended on Scopulus 2011-04-13 16:02:12 in Business Articles

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