Ebook A Better Deal for Consumers Delivering Real Help Now and Change for the Future
This White Paper seeks to address two challenges: first, how to help consumers during the downturn, and second, how to respond to the way consumer markets are changing because of the effects of globalisation, and the increasing use of technology by consumers and business to buy goods and services.
The proposals in this paper are in part a response to an economic downturn that is unlike any other; a global slowdown in growth accompanied by a global contraction in credit available to consumers and business. The Government has acted quickly to restore confidence, through stabilising the banking system to protect savings, get credit flowing, VAT cuts and other changes. But we need to do more for hard-pressed consumers and this paper outlines what help we are providing now for people in financial difficulties, and longer term support for consumers as Britain emerges from the downturn.
Although many people have felt the impact of the economic downturn most acutely in relation to financial products, its effects have pervaded other consumer markets. As families tighten their belts, they become more conscious of every pound they spend. Evidence gathered by Consumer Focus suggests that consumers now perceive as risks what once they saw as opportunities, for example larger ticket items such as cars. Increasing numbers of consumers are seeking out value by using the internet to research and/or buy goods.
For consumers, value for money, perceived risks, word of mouth about good and bad service and confidence in the future will remain key factors in their purchasing decisions. The changing nature of consumer markets brought by globalisation, such as greater cross border purchasing and increased use of the internet, are challenging Britain’s consumer legislation and enforcers to respond to new and constantly evolving methods of selling.
Businesses now face tighter margins and more competitive markets, which can act as an incentive to provide greater choice and lower prices leading to increased transparency, greater profitability for the most efficient and an opportunity to build and develop customer loyalty. It is also important at all times, but particularly in these challenging economic times, that Government is committed to minimising the burdens including regulation on business.
A difficult economic climate can, however, also provide an incentive to a small number of disreputable firms to bend the rules, mislead consumers and gain an unfair advantage over the vast majority of businesses which behave legally and competitively. We take action where this has occurred (through intervention by regulators) and are determined to ensure that Britain remains a country where businesses thrive in fair and competitive markets, and consumers benefit from these. The Government’s long standing policy remains to promote open, competitive and independently regulated markets in an economy that is open to the world.
Competitive markets provide the best means of ensuring that the economy’s resources are used to encourage enterprise, efficiency and choice for consumers. For example, new technologies will drive consumer demand, transforming existing products, and changes in demographic patterns will affect consumer demands for new products and services from the businesses that provide them. In turn, informed consumer choice helps to promote competitive markets. Four out of five consumers, for example, pass on news of their good or bad experiences to other people.
This paper explains the Government’s plans to maintain the UK’s record of one of the best consumer frameworks in the world. Consumer confidence is essential to the smooth functioning of business and this paper sets out the Government’s role in helping consumers deal with the challenges of a modern economy and how we will provide clarity and transparency for businesses and consumers alike.
Contents
Foreword
Executive Summary
Introduction
Chapter One: Real Help for Vulnerable Consumers
Chapter Two: A New Approach to Consumer Credit
Chapter Three: Empowering Consumers through Better Enforcement and Information
Chapter Four: Modernising Consumer Law
Chapter Five: Next Steps
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