Author Archives: ESAN Admin

DECC consults on the future of the Energy Company Obligation

Energy-pic Today DECC published the consultation document on the future of the Energy Company Obligation (ECO). The consultation will run from 5th March to the 16th April.

DECC says:

The majority of these proposals were highlighted as part of Government’s announcement on 2 December 2013. As set out in the December announcement we are proposing these changes to reduce pressures on consumer bills and ensure ECO provides value for money for energy consumers; while continuing to help tackle fuel poverty, support the development of sustainable energy efficiency supply chain and improve the energy efficiency of our housing stock.

While it is clearly right that we look to ensure government policies do not unreasonably impact on consumer bills, we also recognise the impact of these proposals on the energy efficiency market. In particular we recognise that the uncertainty created by the proposed changes has had an effect on delivery on the ground and that consequently the supply chain has seen a contraction in demand.

This consultation is a key opportunity to make sure we implement these changes as effectively as possible, taking into account industry needs and the experience of ECO delivery over the last year.

Consultation closes 16th April 2014.

FCA publishes review of mortgage arrears handling

FCA_logo.2 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.

Consumer Rights Bill: written evidence

Parliament-2-edited Written evidence can be submitted until 13th March. Members might like to consider responding. See here for more, and details on how to respond. According to the guidance “Your submission should address matters contained within the Bill and concentrate on issues where you have a special interest or expertise, and factual information of which you would like the Committee to be aware. It is helpful if the submission includes a brief introduction about you or your organisation. The submission should not have been previously published or circulated elsewhere.”

Welfare reform: implications for utility companies and creditors

This paper by Citizens Advice summarises the changes to benefits that have already taken effect and those still to come, and looks at what companies can do to identity customers in difficulty. It outlines steps companies can take to understand their customers, to proactively work with them, forbear from taking action that may make matters worse, and refer on those who need help.

It is also important that creditors are proactive in looking out for signs of potential financial difficulty and offering support accordingly. Forbearance and breathing space from their creditors will help customers who are having to adapt to a reduced income or a change in the way that their benefits are paid to avoid reaching breaking point.

Consumer Rights Bill

parliament-pic-edited This bill is aimed at simplifying and clarifying consumer rights, streamlining and bringing together the complex mix of consumer protection legislation which currently exists. If it is simpler for consumers to understand their rights and responsibilities, they may be more likely to exercise them effectively.

Consumers will be able to:

get some money back after 1 failed repair of faulty goods (or 1 faulty replacement)
demand that substandard services are redone or failing that get a price reduction
a set 30 day time period to return faulty goods and get a full refund
challenge terms and conditions which aren’t fair or are hidden in the small-print: for example airlines charging baggage fees will have to make them really clear when consumers are booking to avoid legal challenge

Digital content is included for the first time.

Citizens Advice strongly welcomed the bill, calling for minor adjustments only. In particular they want collective redress provision to extend to all unfair practices, not just competition cases as currently proposed. See here for a Parliamentary Briefing from them on the Bill.

CF launches “Next generation intermediaries”

Low levels of consumer switching characterise many essential services markets (think current accounts or energy suppliers) and mean that competition alone isn’t sufficient to drive improvements. Two new reports from Consumer Futures have tackled this issue head on, introducing the concept of a new form of intermediary.

Next Generation Intermediaries (NGIs) are services that enable consumers to get better outcomes from complex markets by doing very little themselves – effectively outsourcing engagement to a new kind of intermediary service that works on their behalf. They would empower any consumer who lacks the time or inclination to trawl around for a better energy, financial services, or mobile phone package to instruct the intermediary find the offer that best meets the consumer’s declared criteria, and then to instigate and oversee the switch for them.

Let’s call it ‘do it for me’. It envisages a world where any consumer who lacks the time or inclination to trawl around for a better energy, financial services, or mobile phone package can instruct a new kind of intermediary service to ‘do it for me’. What’s more, once that service identifies the offer that best meets a consumer’s declared criteria, the consumer can again say ‘do it for me’ and have the service instigate and oversee the switch to the provider of that offer. And the consumer can then keep saying ‘do it for me’ in relation to related services that require decision support.

This paper provides an overview of the Next Generation Intermediary (NGI) concept – outlining the potential that NGI type services offer and the qualities that set them apart from established intermediary services. It provides an overview of how NGIs would work in practice, the technological trends that make this kind of approach possible now, and some thoughts on who might come to offer NGI services.

Ofgem ban on complex tariffs

Ofgem-standard-pic As of 2^nd Jan Ofgem has banned suppliers from offering complex tariffs. The reforms also mean that once a consumer has decided how they want to pay for energy they will have just four core tariffs to choose from for gas and four for electricity, from each supplier. Read more from Ofgem here.

The changes are part of Ofgem’s reforms for a simpler, clearer, fairer energy market and Ofgem believe that together these changes will make it far easier for consumers to compare deals and find the best tariff for them. From April 2014 a range of reforms are also coming into force to give consumers much clearer information on energy. For example, suppliers will have to tell consumers regularly in writing which of their tariffs is cheapest for them on bills, annual statements and other communications.

Citizens Advice expressed concern that energy companies should not use this as an opportunity to get rid of their cheaper deals – see more here. They will be helping people to cut down on their energy bills through Big Energy Saving Week which runs 27-31 January 2014. The campaign will help consumers to find out about any extra help available from their energy firm.

Consumer Futures pointed out that it would be “naïve” to think this alone will sort out the problems in the energy market, and called for “A
fundamental competition review of the energy market that questions whether its
very structure fails consumers”.

T-Mobile launches mobile service in US aimed at “underbanked” while O2 withdraws wallet in UK

T-Mobile_Samsung_edited T-Mobile’s service links a pre-paid Visa card to an app on the phone. Cards can be used at ATMs, in shops and to pay bills, and the app can be used to keep track of transactions and balances. Millions of Americans don’t have traditional bank accounts and T-Mobile claim that this service may provide a cheaper alternative to cheque-cashing services and payday lenders. Pre-paid cards are growing in popularity in the US. Read more here.

In the UK, O2 recently announced that it was shutting down its mobile wallet service which similarly offered a pre-paid card linked to an app. More here. Customers have until 31st March to spend funds stored on their account.

New ‘Easy Read’ mobile phone guide for people with learning disabilities

Ofcom has published a guide which offers advice to people with learning difficulties on how to get the most out of their mobile phone and on how much it could cost. It gives information on:

the different types of mobile phone handsets available;
the costs of mobile phone calls and ways to pay;
free services available for disabled customers; and
how to complain when things go wrong.

It’s available from Ofcom’s website here, and will be distributed by organisations including Mencap and the National Autistic Society.

Two recent reports on poverty

A briefing called Ethnicity and deprivation in England was published in December 2013 by the Centre on Dynamics of Ethnicity (CoDE) and others as part of a series The Dynamics of Diversity: evidence from the 2011 Census. It examines how likely ethnic minorities are to live in deprived neighbourhoods.

The summary is here.

Joseph Rowntree Foundation published Tackling in-work poverty by supporting dual-earning families. The report examines how working families can be helped out of poverty.

The research reviews trends in employment among couple families with children and considers policies and the wider context in four areas likely to affect their employment rate: family leave, childcare, the labour market, and the tax and benefit system. It finds:
◾The risk of poverty is much higher for children in couple families where only one parent works;
◾sole earner families account for a significant minority of poor families with children.
◾Many fathers have to work long hours, making it harder for them to get involved in family life and more difficult for mothers to work. To enable more low-income families to have both partners in work,

The report recommends allowing second earners to keep more of their wages before means-tested benefits are withdrawn; more publically-funded affordable childcare; and phasing in more generous family leave, including longer paternity leave.

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