Consumer protection has become a hot political issue with John Denham and Chris Huhne making interventions on the need for consumer empowerment in the last week. And September 27 marked the end of the Government consultation on empowering and protecting consumers from the Department for Business Innovation and Skills (BIS).

New research from Damian Tambini argues that in the fast changing communications sector, the Government’s proposals are likely to fail to save money and could result in lower levels of consumer protection.

The paper argues that there is an enduring and probably permanent need for a sector specific consumer protection and empowerment body, which contrasts with the Government’s proposal to roll consumer protection in with the hard pressed Citizens Advice Bureau. Dr Tambini suggests that a sector specific body is necessary because of the risk of consumer failure in the highly complex and technical communications sector.

“Communications consumers in the UK do not switch enough, and when they do they sometimes do so irrationally. As the government conducts a welcome review of the landscape of consumer representation in the UK, they should be aware that there is an ongoing, permanent need for consumer advocacy specific to the communications sector.”

The report looks at how consumer behaviour in the communications market defies the rational-actor assumed by economic models. It points out that, in this market, problems with accessing and understanding information are just some of the reasons why consumers do not switch freely between operators in favour of the best prices and fulfil their role in the market. An annotated dossier of resources related to consumer representation in the UK communications market compiled by Nate Vaagen is also now available on the Policy Resources page

Policy Brief 4 Reforming Consumer Representation in UK Communications