UK consumers lose £6.6bn a year to unfair treatment
Telecoms and banking firms - the biggest culprits
British consumers are being cheated out of £6.6bn a year by unfair treatment from business, with telecommunications and personal banking topping the list of problem areas, the Office of Fair Trading (OFT) has said.
OFT research found that more than one in two of the 10,000 consumers surveyed had suffered some kind of consumer detriment in the past year. Consumer detriment is the suffering caused to a consumer by an organisation's unfair treatment of them.
"For every 1,000 consumers interviewed, 542 problems were identified, and across the whole of the UK population this equates to an estimated 26.5 million problems over the last year," said an OFT statement. "The report concluded that the goods or services which consumers reported the highest proportion of problems were telecommunications, domestic fuel, and personal banking."
The OFT's study found that just 64 per cent of the people who had had problems with businesses took any action or complained about their treatment. Many fewer people took their complaint through independent channels such as the OFT.
"Only five per cent of people in the UK report their complaint through channels such as Trading Standards and Consumer Direct," said OFT chief executive John Fingleton. "This research is crucial in improving our understanding of problems we do not always see or hear about."
The OFT research found that consumers were most likely to complain to internet, insurance, fuel, and personal banking companies.
The OFT found that when people do complain it is directly to companies, largely without seeking advice from consumer bodies. Just 24 per cent of complainers sought information or advice before making their case.
The research discovered that while the amount of detriment and complaint levels varied greatly between types of products and services, they did not vary much according to demographics.
Fingleton said it was important to understand consumers' problems and to help them understand their rights in relation to suppliers.
"Consumer confidence in markets is important to making markets work well and maintaining a strong and growing economy. Understanding where consumers are experiencing the most problems and incurring the greatest losses will help us to set priorities efficiently and focus the work of the OFT on markets that are not working well."
See: The report (108 page/879KB PDF)
Copyright © 2008, OUT-LAW.com
OUT-LAW.COM is part of international law firm Pinsent Masons.
Sponsored: Today’s most dangerous security threats