Ups and down(load)s: Consumer experiences of buying digital goods and services online
This Christmas it’s predicted that £6.4 billion will be spent online in the UK. The current consumer protection framework does not fit well with the growing consumer demand for digital products. Unlike a CD or DVD that is delivered to your door, digital products such as movies, music, software and e-books, delivered through downloading or streaming, are not classified as ‘tangible goods’. As a result, consumers buying digital goods and services are exposed to risks in case products are not fit for purpose or are not delivered.
Our mystery shopping survey found that often shoppers had to navigate lengthy and complicated contracts. Even after reading terms and conditions, almost a third of those surveyed were unable to tell if they were allowed to copy their purchase to another device (known as ‘format-shifting’), back it up or share the file with others. Over half of our shoppers couldn’t find any information on what to do if they had a problem with their purchase. And a third of shoppers were not provided with information about additional software and equipment needed in order for their purchase to work. In addition, some retailers placed restrictions on people’s rights if the digital products were not delivered or did not conform to the product description.
Consumer Focus is calling on the retailers of digital goods to introduce ‘summary boxes’ to give consumers all the essential information they need before they complete their purchase – details of the product’s specifications, the full cost, a customer services helpline and the software and equipment required for the product to work. We also want the Government to update consumer law so that the same principles that cover physical products – that goods must be of satisfactory quality, fit for purpose and as described – cover digital goods and services.
Net neutrality has recently become a hotly debated issue. The debate considers not only the commercial and financial interests of the internet and e-commerce economy, but also wider social and economic issues such as access to online public services and freedom of speech.
Net neutrality means internet service providers should not give preferential treatment to some applications, content and services over others. For consumers this principle means the freedom to access all legal content, services, applications and devices of their choice.
The speech on 17 November by Communications Minister Ed Vaizey on the open internet reignited support for, and opposition to, net neutrality. The speech was interpreted by some to mean a two-tier internet with a toll system as the future for the UK, with a few accessing premium broadband services and others left in a ‘slow-lane’ with restrictive access to internet services.
In response to the speech Consumer Focus, with a coalition of stakeholders including internet heavyweights such as Skype, Yahoo, eBay, called on the Government for a clear political commitment to preserve net neutrality by adopting five key principles such as openness, minimisation of data traffic management and a strong regulatory framework.
Better information for tenants
Signing up to a tenancy agreement is a significant commitment for most people. However, they currently do not have access to information on the track record or performance of private landlords to help them make an informed decision. This can cause problems for private tenants and lead to dissatisfaction. Our Consumer Conditions Survey found that, based on consumers’ recent experiences of 45 different markets, the private rented sector (PRS) was ranked 38th.
Consumer Focus will be publishing a report in January which examines the potential of introducing an online scheme of ‘reputational regulation’ in the PRS in England. The scheme, where existing tenants provide feedback on their landlords, could help to inform prospective tenants about the landlord’s performance and management before they commit to a tenancy.
Our report shows that there is support from stakeholders in the sector for the introduction of reputation regulation in the PRS, and highlights the practical issues that are associated with a scheme and how these can be addressed.
Updates to the Consumer Focus Confidence Code
Consumer Focus recently published updates to its Confidence Code and, as the cold weather hits, is encouraging consumers to shop around for the best energy deal on switching sites accredited by the improved scheme.
The Confidence Code is used to accredit energy price comparison websites to give consumers confidence in switching energy supplier. Consumer Focus is improving the code in response to changes in tariffs and terms and conditions in the ever-changing energy market, to make sure that consumers can get the most accurate and reliable information to help them shop around for the best deal.
Updates being made to the Confidence Code accreditation system include:
- Sites will be required to improve information provided on limited-term discounts and tariffs. One-off or short-term discounts that last for less than the comparison period, or start after the first year of the tariff, will not be included in the estimated bill figures the sites provide, giving customers a more accurate idea of annual charges
- Sites will have to give a warning message if the end date of a supplier’s tariff is within two months of the length of the comparison period
- The code will ensure a wide range of green and environmental gas and electricity deals are included on these sites. Electricity tariffs that are accredited by the Green Energy Supply Certification Scheme will be clearly marked
- In addition to energy price comparison sites being required to display all available tariffs which fit the consumer’s requirements, sites will now also be able to display an initial results page of tariffs that customers can directly switch to through the site
Confidence Code accredited energy price comparison sites are expected to make the changes required by 10 January 2011.
Draft Annual Plan consultation
Consumer Focus welcomes your views on our draft Annual Plan for 2011/12 to help ensure our work achieves the most benefit for consumers.
This document presents potential areas of work for Consumer Focus in 2011/12. We can’t do all the projects contained in this document. We would like your help in making decisions including on those areas where you think we should focus our efforts and any which you feel are of lesser priority.
The consultation process runs from 17 December 2010 to 18 March 2011. Your responses will help determine how we could use our powers and resources to best effect to advance the interests of consumers.
Sustainability and the best use of public money are very important to us at Consumer Focus, so this year we’ve once again decided not to send traditional Christmas cards.
Instead, please follow the link below to receive our festive greetings: http://www.consumerfocus.org.uk/e-card