Time to stand up for our rights as consumers

The road to consumer nirvana lies, in the first place, in ordinary people asserting their rights - something Irish people have…

The road to consumer nirvana lies, in the first place, in ordinary people asserting their rights - something Irish people have been notoriously slow to do.

"Consumers themselves are often to blame," says Dermot Jewell, chief executive of the Consumers' Association of Ireland. "They don't question prices as much as they should. They groan and gripe but they don't take action and often expect others to do it for them. The youngest are the worst for not complaining.

"It's up to people to show a degree of responsibility and, if they're not prepared to do this themselves, to support others who are fighting for their rights."

Retailers operate with an expectation of what people are prepared to pay, Tina Leonard of the European Consumer Centre in Dublin points out. "If you don't make an effort to be a responsible consumer by voting with your feet, the retailer will spot that behaviour and charge more.

READ MORE

"There's no point complaining down the pub; that's not going to change anything," she says.

However, as lawyer Raymond O'Rourke points out, one of the fundamental problems is that the sums of money involved in consumer disputes are often quite small. "There are limits to what you can achieve through legal means because the amounts involved are quite small. Sometimes all you can do is rap the knuckles of an offending company."

This point is also made by Imogen McGrath, a barrister specialising in competition law. "Often the amounts involved are so small that it's not worth their while to take action. In Europe, cases can't be bunched together as they can in the US."

O'Rourke maintains that our consumer law, even that originating in Brussels, is quite weak. This difficulty is compounded by the approach of the legal profession, he says, with its reliance on traditional concepts such as negligence and tort. "Often solicitors don't look at the actual law; they engage in a lot of handholding when it would be quicker to head down to the small claims court."

He suggests there should be set amounts of compensation in common cases where things go wrong. At present, for example, when a problem arises with a Ryanair flight, just a few of the 200 people on board are likely to go to the trouble of seeking legal redress.

Companies know they can rely on attrition to see off most complaints, because consumers are just too busy in their personal lives to pursue claims when the way is paved with obstacles and the ultimate outcome is uncertain.

McGrath says there is no easy solution that would make litigation easier for consumers. Competition law here is relatively recent whereas anti-trust litigation in the US is long established, she points out.

One major change which appears to be on the way is the creation of a European form of class action. EU commissioner for consumer affairs Meglena Kuneva has said she is looking at a new system of "collective redress" that would allow consumers to bring claims against providers of faulty goods or services

In the US system, individuals are allowed to aggregate claims into one law suit, thus giving them the incentive to pursue compensation, often for small amounts, when it would be too costly or time-consuming to take action on their own. However, class actions in the US have been criticised as a means for big law firms to win big fees while generating little return for the individuals concerned.

Under the EU proposal, which is still at an early stage, the job of aggregating claims might be given to national consumer bodies, rather than legal firms.

While the decision to create a separate portfolio in the European Commission for consumer affairs had more to do with the need to find new jobs for new entrants to the union - Kuneva is from Bulgaria - it could have fortuitous spin-offs for all of us.

By giving consumers the information and rights they need to shop around in the single market, Kuneva believes she can increase competitiveness. Last year only 6 per cent of European consumers bought an item online from another EU state, while only 1 per cent used cross-border financial services.

"The internal market has the potential to be the largest retail market in the world but today it remains largely fragmented along national lines, forming 27 mini-markets instead," she says.

Another drag on the growth of consumer consciousness in Ireland is the refusal of the left to engage with these issues in a sustained way. As a result, the territory is dominated by those who see the route to consumer nirvana lying in the break-up of State monopolies, such as the ESB or the postal service.

There is far less analysis of the failure of competition to bring down prices in supposedly open sectors such as food retailing or health insurance.

Also, little attention is paid to the profits made by leading companies as an indicator of how fair their prices might be; money paid to shareholders and directors is, after all, money that might otherwise have been passed on as savings to consumers.

It's one thing to be sceptical about the benefits of the free market, quite another to pretend it doesn't exist. Trade unionists' equation of consumer activism with neo-liberal thinking ultimately condemns their 800,000- plus members, all of them consumers in their own right, to the whims of business.

In the US, muscular consumer advocates in the mould of Ralph Nader would be puzzled by such preciousness. From the 1960s, Nader, the original consumer advocate, created effective consumer campaigns for causes such as greater car safety, water quality and rights to freedom of information.

As a result, the US, while still the global headquarters of capitalism, also has better regulatory control, greater freedom of information legislation and stronger consumer protection than anything on this side of the Atlantic.

In other European countries, trade unions play an active role in consumer organisations. The Danish Consumer Council, for example, is made up of 27 national organisations, including 11 trade unions. Only half its funding comes from government, so it is able to maintain its independence.

Here in Ireland, much will depend on the performance of the new National Consumer Agency. Although the agency will be completely dependent on government funding, Minister for Enterprise and Employment Micheál Martin promises the new body will be a "genuinely powerful advocate" for consumers and he says he is pleased with the progress made so far.

Providing information is clearly very important for the consumer, but the hope is that the National Consumer Agency will go much further than merely researching issues. Now equipped with significant powers to investigate complaints and penalise wrongdoers, it has the potential to revolutionise the world of consumer protection.

Given sufficient funding and the right staff, it should have the resources to fund major research into areas of consumer harm and correct much of the spin that comes from producer interests. It can lead by example and powers of persuasion by intervening on behalf of customers in disputes.

A chief executive will be appointed shortly but acting head Ann Fitzgerald promises the setting up of the agency marks "the beginning of a new road" for consumers. Only time will tell.