UK Bank Charges Assessable For Fairness

Breaking news in the bank charges saga: the Court of Appeal ruled today that certain allegedly excessive current account charges can be assessed for fairness under the Unfair Terms in Consumer Contracts Regulations.

There'll be no further delay on that little issue, as the banks' request to drag it into the House of Lords was refused. [The House of Lords subsequently granted leave to the banks to appeal, due to be heard in June 2009]

So now, either (a) customers must endure another delay while the banks pompously trot out their evidence as to why the OFT was wrong to challenge their fees as unfair, or (b) the new significant shareholder in many of the banks can put an end to much of this nonsense by insisting they refund what was alleged to be excessive as a "fiscal stimulus".

Of course, a "fair" bank could always demonstrate real leadership on the issue, by simply issuing the refunds of its own volition. But it seems each bank believes that just wouldn't be fair on the others.

Oh, look, this post comes hard on the heels of the one where the European Commission says:

"in the banking sector switching is low and offers difficult to compare. The substantial variation in bank fees between Member States is not explained by differences in expenditure levels". In the first half of 2009, the EC will "assess the problems consumers face resulting from a lack of transparency in retail financial services."

Nasty!

EC's Consumer Markets Scoreboard

Meglena Kuneva, the EC's Commissioner for Consumer Affairs, appears to be trying hard to compile meaningful data on "how markets ultimately perform and deliver to citizens".

The Consumer Markets Scoreboard - only in its second edition - provides data on prices, complaints, degree of satisfaction, switching rates and safety. However, it finds that "more quality data are needed to develop a solid consumer evidence base... The current evidence... is still not enough to draw definite conclusions."

Nevertheless, the report makes a series of "observations", including:

• "consumers are less satisfied and experience more problems with services than with goods markets. The most problematic surveyed sectors are energy, transport (bus and rail) and banking services."
  
  
• "in the banking sector switching is low and offers difficult to compare. The substantial variation in bank fees between Member States is not explained by differences in expenditure levels". In the first half of 2009, the EC will "assess the problems consumers face resulting from a lack of transparency in retail financial services."
  
  
• higher switching rates (e.g. in the market for car insurance) means "consumers are less likely to report price increases". Though I'd observe that the number of TV ads for the plethora of price comparison web sites focused on car insurance suggests there is still plenty of fat in that market - 25% of consumers reportedly switch, but prices are reported as steady.
  
  
• "Cross-border retail trade is stalling. The proportion of consumers shopping cross-border has not increased since 2006, while the proportion of retailers selling across borders has declined. Nevertheless, while 25% of consumers have shopped cross-border in the last 12 months, 33% are considering doing so in the next year. If harmonised consumer regulations were put in place across the EU, 49% of retailers would be interested in selling cross-border. This would be a significant improvement compared with the 20% that currently sell cross-border. Online shopping is becoming more widespread but cross-border e-commerce is not developing as fast as domestic online shopping."
  
  
• "While complaints data are important to detect malfunctioning, the absence of complaints does not always mean that there are no problems... in some markets consumers have a low tendency to complain even though they experience problems, for example, in bus and rail and some food markets such as fruit and vegetables." Source: IPSOS consumer satisfaction surveys 2006 and 2008.
  

The report cites the following "Action points for 2009:

• A market study on the retail electricity market.

• A chapter on online geographical market segmentation in the retail market study which will analyse the problems consumers have when shopping online across borders.

• A communication on enforcement which will set out a global strategy to ensure the effective enforcement of the consumer acquis.

• Development of a regular collection of average prices of comparable consumer products and services by Eurostat and the national statistical offices.

• Development of a voluntary harmonised methodology to classify consumer complaints.

• Work to develop appropriate indicators to measure enforcement and empowerment with national stakeholders."

Brand As Facilitator, Not Institution

I was jamming with Mark Nepstad on Saturday about the role of brands and their agencies in social media - as you tend to do on Shiraz - when he showed me a publication containing this graphic, which came from David Armano's excellent "Logic and Emotion" blog.

What struck me about this graphic was not so much the ripple effect of conversations about a product, but how comparing the data from each social network would give a supplier an 'aerial' view of their consumers' community (specifically in case of Twitter, blogs and other "Level 2 Ripples"). With that data the supplier is better able to organise itself to help improve, or facilitate, its customers' experience.

The challenge, of course, is to resist the temptation to use the data to interfere and manipulate in a top-down, institutional manner, rather than facilitate consumers' bottom-up assertion of control.

The consequences of succumbing to this temptation can't be overstated. A supplier risks tapping the sense of frustration and disillusionment responsible for both the plunge in faith in society's institutions and participation in formal politics during the past 30 years, and the corresponding increase in our political awareness, informal political action and consumer activism, particularly over the past decade. Similarly, that sense of frustration and disillusionment marks the turning point between vicious and virtuous circles of consumer sentiment and related publicity. It was the difference between Barack Obama and that other guy (though interestingly the informal tactics of the new President actually drove a return to formal politics).

As I've suggested before, it is the "architecture of participation" created by various Web 2.0 facilitators that has been a very real catalyst in this rise in personal, informal, direct action. It has enabled millions of us to experience what it's like to personalise the one-size-fits-all consumer experiences offered by the likes of music labels, book publishers, retailers, package holiday operators, banks and political parties. So it can be said that the facilitators of this architecture are making the difference between us 'raging against the machine' in a lone, fragmented way and acting together as individuals in a concerted fashion. And it's a thrilling ride.

Used to this end, the data about a supplier's "Influence Ripples" amounts to yet another tool with which a brand, as facilitator, can strengthen the architecture of participation from which the data is drawn to help consumers personalise their experiences involving the brand's products - a 'virtuous circle'. Conversely, the very nature of the architecture in which the influence is rippling means that any supplier who is perceived to be using, or likely to use the data for Orwellian purposes - to manipulate or interfere for its own institutional ends, rather than its customers' interests - must find itself in a 'vicious circle' of adverse comment. There are several instances of this dynamic at work in the privacy sphere, around Phorm, the Data Retention Regulations and the recent ripples still emanating from Facebook's revision to its privacy and content ownership terms. [PS. And here's another, hot off the press on 25.02.09, as Ryanair trades blows with 'idiot blogger' and, oh look, it's getting worse on reports they're going to charge £1 for answering nature's call].

Reassuringly, I see that Mr Armano came to a similar conclusion in his own post, entitled (coincidentally, I swear) "Brand as Facilitator". With some more very nice graphics ;-)

Another Season In Aid of Prostate UK

Another season begins!

This will be my third competing in aid of Prostate UK in various rowathlons (row, bike, run - I hate swimming lengths!) and duathlons arranged by Will Whitmore at DB Max, and culminating in Marlow Rowing Club's Rower's Revenge in October.

The pressure's on, because this year I've followed Mark Allen's base training suggestion and spent much of the past 4 months training below my maximum aerobic heart rate to try to improve performance when the rowathlons start in May. The first 'warm-up' event is the DB Max Chilly Duathlon at Castle Combe Race Circuit next week, on 1 March - a cheeky 2 mile run, 10 mile cycle, 2 mile run that took me 59 mins and 47 secs last year. So whether the extra time and patience has been worthwhile is about to be sorely tested!

Will it all be for nought? Not if you donate a tenner each... ;-)

I'll post the stats on my Justgiving page, and share the highs and lows right here, as the season progresses. Last season's results were:

Trybike Mallory Park Rowing Tri - May 5th - 2.5k row, 20k bike, 5k run (time 1:19:13 - 21st overall). Dodgy transitions definitely cost me a place.

Castle Combe Rowing Triathlon - August 10th - 3k row, 20k bike, 3k run (time 1:11:51 - 27th overall and beating 2007 time of 1:13:29). It was all down to the run; more training time on the bike required.

Reading Rowing Triathlon - August 16th - 2.5k row, 7k bike, 2.8k run (time 36:22 - 19th overall). Went too quickly in the row, which killed the run, but it felt good and I couldn't resist ;-)

Marlow "Rowers Revenge" - October 5th - 4k row, 25k bike, 7.5k run - (time 1:42:50). Beat previous time (2005) by about 10 mins :-)

Hiding The Law Is No Defence

Bizarre, but true: the most frustrating thing about providing legal advice is actually finding the law. I'm not just talking about judgments, but also the statutes and regulations that burst out of Westminster like confetti at a wedding. It would be interesting to measure the cost of this inaccessibility, because it seems likely to be one of those nasty, unseen root causes of a lot of other problems, not the least of which could be higher legal bills, delay and the exorbitant cost of legal information services.

One impact was highlighted recently in a case in which HM Revenue & Customs inadvertently misled the Court of Criminal Appeal, no less, as to the relevant regulations in force until the "11th hour", when a Revenue lawyer spotted the problem while researching another case. Other cases may have been decided on the wrong regulations.

Given the law is ultimately there for our protection, it won't be much help if it's hidden.

The Free Legal Web initiative recommends 3 ways to improve the situation:

"Firstly, let’s improve access to existing legislation. This is the task OPSI have and it is one which FreeLegalWeb is addressing. But this is applying sticking plaster to the wounds.
So, let’s improve legislation via new legislation! The Leader of the House of Commons is on the case, describing the several ways in which the Government is simplifying and consolidating legislation. But that does not address the huge corpus of remaining existing fragmented legislation.
The third way we can improve access to legislation will be by far the most effective and it does not appear yet to have attracted any public discussion - and that is to improve the legislative drafting process. Legislation is drafted by the Office of Parliamentary Counsel and it is therefore to the OPC that we should look for the answer. To do their job in preparing amending legislation OPC need to work from a consolidated version of the current legislation. Why cannot that be made available to us?"

Indeed.

But I also think we could escalate the issue on the demand side of the equation. Representatives of consumers, SME's and large corporates alike should be demanding ready access to the statutes and regulations that govern our affairs. That should include not only the likes of the CBI and FSB, but also public sector representatives like BERR (doesn't "better regulation" include better access to it?). Even industry-specific bodies could get in on the act (excuse the pun) . The FLA would do well to insist that the Consumer Credit Act and regulations, fully annotated as endlessly amended, should be freely available online in all its ugly glory. And any self-respecting public information provider should be making the same demands - not only the likes of Which? but also DirectGov and Consumer Direct.

While it's perhaps not the sort of grandiose issue that The Great And The Good relish as a chance to strut their stuff on the dais at the Guildhall, it's actually the sort of "small" or "administrative" issue that needs their extra careful attention. As Ghost Dog famously recalled:

"Among the maxims on Lord Naoshige's wall, there was this one: "Matters of great concern should be treated lightly." Master Ittei commented, "Matters of small concern should be treated seriously."