Monday, 29 September 2014

Digital economy: Commerce across borders needs robust redress

Liz Coll, a digital policy expert at the consumer futures unit, Citizens Advice, looks at how consumers can get a better deal from cross-border commerce.

How can consumers buying products from foreign markets be confident of refunds, delivery and redress if things go wrong?

Even in the single market of the European Union, consumers remain far less confident about buying online from sellers in other EU countries as opposed to domestically.

This then impacts on trade, with EU domestic e-commerce growing at over twice the rate of cross-border e-commerce.

As well as issues with delivery and payment, confusion over what protections apply and how to resolve problems if they arise can put consumers off buying online across borders. Research from a Consumers International Global Consumer protection survey  found that consumers do not always have access to get a simple, fair and quick redress when purchasing online and there are likely to be more problems when buying from a different jurisdiction.

Given the increase in global connectivity and e-commerce (predicted to top $1.2trillion by the end of 2014) this raises the question of how consumer rights to redress might be realised in a digital world?

Let’s look first at what we might call the traditional route of legislation, regulation and information.
  • Consumers International wants to  update the UN Guidelines on Consumer Protection to ensure that simple, effective redress is available for consumers living in the digital age.
  • Agencies, such as the EU, are proposing harmonising returns policy provision in all states and new legislation on online dispute resolution.
  • Accreditation and endorsements might also help to continue building consumer confidence.   
But are there other things that could develop trust in cross border transactions
help prevent disputes arising and uphold consumer rights? The protection mechanisms outlined above could be strengthened by powerful, consumer-centric tools, for example:
  • Online dispute resolution: the most famous example is Modria a dispute resolution platform which handles more than 60 million disputes per year, taking participants through a process of stages, suggesting solutions and recording information and if necessary facilitating mediation or arbitration.
  • Reputation metrics. the social, interactive web enables consumers to rate sellers’ performance and quality and, when aggregated with other users’ feedback, creates ‘peer-produced metrics of trust’. Systems and mechanisms that can ensure impartiality and reliability become more important. Reevoo and Feefo are examples of platforms that authenticate and aggregate reviews with the goal of making them trustworthy, representative and structured.    
  • Other 'go-between' intermediary services such as payment services or the emerging market for personal data intermediaries, who set and manage data sharing permissions on consumers’ behalf, will also have a role to play in engendering trust and creating an infrastructure in which the rights to security and safety can be realised. 
Many of these mechanisms are made possible by widespread use of social, digital technology.

Working out how to maintain impartiality and accountability, and how to increase use and confidence in the system, will be necessary to ensure they can benefit everyone.  

In conclusion, effective cross border redress is a crucial element in creating an environment for consumers in which they can confidently engage in e-commerce across borders.

However to be truly effective, it must be part of a wider, concerted effort to empower consumers to realise their hard-won consumer rights in the digital age

Wednesday, 24 September 2014

CI Member BEUC campaigns for meat origin labelling

Monique Goyens, Director General of The European Consumer Organisation (BEUC), unveils the new EU consumer campaign aiming to demystify our meat’s origin.

When food shopping in the EU, you don’t enjoy the same level of origin information when you’re buying fresh or processed meat.

If you go for a fresh beef steak, you will know the animal’s comings and goings from farm to fork.

The reason is that ‘Country-Of-Origin Labelling’ (known as 'COOL') is compulsory for fresh beef in the EU. Food makers have to indicate the country of birth, rearing and slaughter.

If you’re more of a white meat fan, as of April 2015, you will know where the chicken from your fillet was bred and slaughtered, but not where it was born. The same goes for pork, sheep and goat meat.

But if you prefer processed meat such as ham, salami or ready-made lasagne, origin labels depend on the manufacturer’s goodwill. Regrettably there are still no EU plans to make origin labelling compulsory for meat in processed in foods.

Yet we do not want to believe the EU legislator will turn a deaf ear to the 90% of European consumers who want to know where their meat comes from.

As the EU Commission has yet to propose legislation making COOL compulsory for meat used as an ingredient, we decided to step up our demands by launching an EU-wide campaign in early September.

With it, we intend to turn the tide and finally make meat origin labels the norm on sausages, ham, nuggets or ready-meals.

Recall how consumers’ trust in meat was shaken following last year’s ‘Horsegate’ scandal when horsemeat was discovered in processed beef products in several EU Member States.

We are convinced making the meat supply chain more transparent can help restore this lost confidence.

While no silver bullet in combatting fraud, compulsory origin labelling of processed meat would oblige food manufacturers to keep a tighter grip on their suppliers.

In just three weeks, over 8,000 consumers supported our campaign on social media. And it’s not over.

With this figure – which we expect to grow – we will address the future European Commissioner for Food and Health so that COOL for processed meat becomes a priority on the EU food agenda.

We believe consumers want to know more about how and where their food - and especially meat - is produced. This is a global trend not a specific EU feature.

If like us you think consumers have the right to know where their meat comes from, there are two ways you can help spread the word on social media:

Like and share our animated slideshow on Twitter, Facebook or LinkedIn (available in 12 languages).

Post pictures of COOL labels on processed meat products using #meatorigin on social media. They will end up in our album to prove COOL is possible and should be the norm.

Monday, 22 September 2014

Coca Cola’s label move is only ‘inch-by-inch’ progress

Even when fizzy drinks giant Coke improves its labelling, it only serves to underline the need for a much tougher regulatory environment,  argues CI's Head of Campaigns Justin Macmullan. 

Last week, Coca Cola announced that it would introduce traffic light nutrition labels on the products that it sells in the UK.

It’s good news for UK consumers trying to choose a healthier diet, but this inch-by-inch approach underlines the need for a global agreement to protect and promote healthy diets.

These labels use red, amber and green to clearly signal to consumers whether the product contains high, medium or low levels of salt, sugar and fat.

This development is certainly good news for the nutrition labelling scheme in the UK. Many UK retailers have signed up to the scheme and with manufacturers also joining, the UK is now moving towards one widely used and understood labelling system.

But it is obvious that more needs to be done.

Dragging their feet

Of course it isn’t the responsibility of Coke to introduce national nutrition labelling schemes, but Coke and other multinational food companies can certainly help by not dragging their feet or lobbying against their use.

The traffic light labelling scheme has been around in the UK for several years and Coke only announced their intention to join last week having shunned it in the past.

Will other countries have to go through years of campaigning for their consumers to get the same deal as UK consumers?

Read the label 

In the same week as Coke’s labelling announcement, I noticed large posters outside my local supermarket advertising one litre bottles of Coke on special offer. It's not an uncommon sight in the UK.

Similarly Coke is one of the world’s biggest spenders when it comes to marketing. Take for example their investment in the football World Cup, when they linked their high fat sugar products to one of the biggest sporting events in the world.

And just yesterday it was announced Coke will sponsor the London Eye – a major UK tourist attraction.

It is hard not to conclude that Coke and other major food companies are only making small changes when they feel there is no other option, but failing to take the action that is really needed to tackle rates of obesity around the world.

Just one can of regular Coke has 35g of sugar and exceeds recent WHO recommendations for the amount of calories that an adult of normal weight should get from sugar in a day.

According to Coca-Cola’s annual report, Great Britain consumed 200 of the company’s beverages per person in 2012.

The same figure for Mexico was 745, equal to more than two drinks per day, whilst US citizens on average consumed just over 400 beverages per year. Not all of these beverages will be regular Coke.

A global convention 

Obesity and diet related diseases such as diabetes, and heart disease are a public health disaster in many countries and tackling the causes requires a comprehensive global approach. CI is calling on governments to support our proposal for a global convention to protect and promote healthy diets.

Tuesday, 2 September 2014

The process for the revision of the UN Guidelines enters a definitive stage

It is a crucial period for CI’s work to ensure global consumer guidelines are updated to meet new challenges, CI consumer policy expert Antonino Serra Cambaceres says. 

The global consumer movement faces a big challenge. We have to convince governments to support our United Nations Guidelines on Consumer Protection (UNGCP) proposals.

It is a complex task and time is of the essence. Governments, more specifically government missions accredited to UNCTAD, hold the fate of this process in their hands.

Therefore, the coordinated work we have to do will be essential to obtain their support.

We can ensure the Guidelines remain the global benchmark for consumer protection - and we have an obligation to reflect the needs and aspirations of millions of consumers worldwide.

If we work in a coordinated manner, this effort will certainly bear fruit.

It’s important to look back on how we arrived at this point.

In 2013, CI presented a proposal which was developed with input from its Members.

In this proposal, we identified issues that needed new guidelines - financial services, e-commerce and energy among others - as well as those in which it was necessary to adapt existing guidelines.

Since then CI continued to participate in the review process and sent responses to the four working groups that were created in 2013 – namely  Financial Services, Electronic Commerce, Implementation and Other Issues.

In these responses we reaffirmed the points that we felt should be updated.

This first stage of this work ended on August 15 when UNCTAD released a report called "Report on the modalities for the review of the UN Guidelines for Consumer Protection".

The publication of this report marked the second stage of the process. UNCTAD has requested all stakeholders - governments, international organisations, civil society groups – comment on the report so that work groups can develop concrete proposals.

This means that from now until October 2014 working groups will identify areas and issues on which there is some consensus to progress the update of the Guidelines.

That’s why this second stage is very important. UNCTAD expects proposed revised texts of the new guidelines, which will take the form of a resolution, will be discussed at a meeting to be held in Geneva, in January 2015.

The draft resolution will be due in November this year, for further comments before January’s meeting.

The 7th UN Review Conference, to be held in July 2015, will approve the draft resolution to be submitted to the UN General Assembly for adoption.

Thursday, 21 August 2014

Spain leads the charge to limit bank card fees

Banks say banning card fees would increase costs for the consumer. David Ortega, of CI Member OCU, explains why Spain and the EU disagree.

The Spanish government, as part of a package of measures to boost the economy which should enter into force on 1 September, has decided to limit the fees for payments with credits or debit cards: to 0.3% for credit card payments and 0.2% for debit card payments.

As an additional constraint, a maximum fee of seven cents is foreseen for debit payments, to avoid cases where the new scenario could generate higher commissions than today.

For small payments, of up to 20 euros, these commissions are set at a lower level: 0.2% to 0.1% for credit and debit cards.

These regulations shall apply to all payments made at points of sale in Spain in which at least one Spanish provider of payment takes part. This also includes e-commerce transactions.

Business cards, corporate or cash withdrawals at ATMs are excluded.

Spain  is effectively  putting into practice the proposed regulation of the European Commission on interchange fees, which aims at regulating maximum fees as a measure to promote the internal market.

The current economic context, the gradual economic recovery and the need to invigorate consumption across all channels - including the electronic one - call for the availability of safe, efficient and competitive electronic payments.

But how does this work? A multilateral interchange fee (MIF) is a fee that a retailer's bank must pay to a consumer’s bank for each card payment.

MIFs typically involve four parties: two banks, a consumer (the cardholder) and a retailer (merchant accepting a card payment). For every individual card payment the retailer pays a charge to its bank called a Merchant Service Charge (MSC), most of which the retailer’s bank passes on to the consumer’s bank under the name of a MIF.

As a result, the final amount received by the retailer is less than the amount paid by the consumer. To compensate this loss of income, retailers usually add up these fees to the final price paid by consumers. Hence the consumer detriment.

Through the legislative process at EU level, there has been heavy lobbying by some card issuers and some banks to stop this initiative.

According to the evidence presented by these groups, the proposed limits would indefectibly lead to an increase of bank fees in general (e.g. in the form of card issuance fees).

Part of the evidence used by these companies would be based on Spanish figures.

According to them, since Spain adopted the first MIF limitation measures back in 2006, bank fees have not ceased to increase. Perhaps.

However, nobody has been able to substantiate that such increase is solely or mainly due to the MIF limitation measures.

In the meantime, the credit crunch and the burst of the real estate bubble in Spain have ravaged the Spanish banking system.

In this context, can anybody seriously argue that the reason why Spanish banks have consistently increased their fees is due to the MIFs limitations?

How can that be deducted from the banks’ accounts?

Moreover there are still commission free cards on the market, which proves that the alleged causal link is hard to prove.

OCU and BEUC reject these arguments and support the European proposal which should  boost the internal market for consumers.

Spain is the proof that such a ban or limitation is possible, without the catastrophic consequences for consumers that some lobbyists seem to find so inevitable.

Tuesday, 15 July 2014

Will consumer rights be at the heart of global sustainable development policy?

CI’s Head of Advocacy Justin Macmullan, outlines why the inclusion of consumer rights is fundamental for the future of sustainable development.

In 2015 the UN General Assembly has the task of agreeing a set of Sustainable Development Goals (SDGs) that will build on the momentum created by the Millennium Development Goals (MDGs).

Like the MDGs, the SDGs will represent a major international agreement and have the potential to influence development policy for years to come.

Good progress has already been made and a zero draft sets out seventeen goals with a number of targets under each.

But there is something missing. Consumer rights are not mentioned. CI believes this is a serious omission and we are campaigning for consumer rights to be put back into sustainable development.

The missing link


The zero draft does include a goal on Sustainable Consumption and Production (something CI has long campaigned for and strongly supports), however this is largely about supporting and promoting environmental and ethical consumption and, as important as this is, it doesn’t address the wide range of issues that consumers struggle with.

Apart from sustainable consumption and production, there are also many other goals and targets in the draft that consumer organisations would recognise and support – including poverty eradication, promoting an efficient and equitable economy, water, energy and health to name just a few.

Why consumer rights matter

The consumer perspective is important for two reasons.

Firstly consumer protection is fundamental to the implementation of many of the other goals that have been proposed and “implementation” is important. As we have seen with the Millennium Development Goals, it is one thing to develop a set of ambitious goals but it is another to deliver on them.

However consumer protection is also an important issue in its own right. Any full definition of sustainable development should include consumer protection.

After all, people’s ability to consume, the consumption choices they have available to them and whether they are treated fairly as consumers, fundamentally effects the quality of their lives and the lives of those around them.

To give just three examples of why consumer protection is important:
  • The first of the proposed SDGs is to ‘End poverty everywhere'. To achieve this poor and vulnerable people need to be sure that they can spend and save their limited income safely, yet they are often amongst the most exploited in the marketplace.
  • The third of the proposed SDGs calls for ‘Attaining healthy lives for all'. This means that consumers need access to healthcare but also protection against unsafe products and services that cause ill health, injury or death.
  • The eighth of the proposed SDGs calls for 'Sustained, inclusive and sustainable economic growth'. It is hard to see how this can be achieved unless consumers are represented and empowered to play their part in the economy.

Similar points can be made in relation to almost every one of the proposed Goals.

Putting consumer rights back into sustainable development


For this reason Consumers International is campaigning for implementation of the UN Guidelines for Consumer Protection to be added as a target under the proposed goal relating to ‘inclusive societies and access to justice’ or ‘means of implementation’.

This is a practical and realistic proposal. The UN Guidelines are internationally agreed and they have proved their value over more than 30 years.

Through CI’s State of Consumer Protection report we have also demonstrated that it is possible to measure their implementation (though we look forward to seeing what more can be done in this area with the right resources).

The process of negotiating the SDGs is already well advanced, so please join CI’s call for consumer protection to be included in the SDGs by contacting your Minister for Foreign Affairs.

You can also watch my video message on these goals - feel free to share.

Monday, 14 July 2014

Junk food World Cup: CI shows football puts profits ahead of world obesity crisis

Competitive sport and junk food should not go hand in hand. Consumers International’s social media campaign during the World Cup in Brazil this month demonstrates that unfortunately they often do, says CI's Nora Blascsok.

The tournament is being used by the food industry to market unhealthy food. Coca Cola is one of FIFA’s major partners and McDonald’s is one of the first-tier World Cup sponsors.

FIFA partners pay between $25-50 million each per year, while first tier sponsors pay between $15-20 million each .

Besides sponsors, other companies like Pepsi, Domino’s and KFC use the World Cup to sell more food and drink products. According to consumer research firm Webloyalty, sales of unhealthy food and beverages tied to the World Cup will reach $459 million in the UK alone.

To highlight the problem, CI asked people to collect examples of adverts in which pictures of footballers and other images relating to the World Cup are used to advertise food and beverage products high in fat, salt or sugar.

These examples were then tweeted or posted on Facebook using the hashtag #JunkFoodWorldCup.

CI Members, as well as many other people on social media around the world, actively participated in the campaign.

Pictures of billboards, TV adverts, interactive marketing promos and publicity stunts involving famous footballers were published on social media, showing how truly global the reach of the food industry and its marketing machine is, especially during events like the World Cup (see our collection of pictures on Facebook).

The social media campaign has reached an estimated 76,090 accounts on Twitter, with the hashtag #JunkFoodWorldCup mentioned in 716 tweets over a period of nearly three weeks.

Many of the adverts tweeted or posted on Facebook use techniques that are known to be appealing to children.

Not only do they star footballers who are well-known and admired by children throughout the world, they also use bright colours, music and often contain an interactive element (such as competitions or games).

CI food expert Anna Glayzer points out: “If children see their favourite footballer advertising crisps or a highly sugared beverage, they will associate that product with sport and with being fit and healthy.”

200 million children globally are either overweight or obese, with 40-50 million classified as obese.

Obesity in childhood has a high likelihood of leading to diseases such as diabetes, cardiovascular disease and cancer in adulthood.

Currently 2.1 billion people are obese and overweight worldwide.

CI is campaigning for global action to address the marketing of unhealthy food. In our publication, Recommendations towards a Global Convention to protect and promote healthy diets, CI calls on governments to restrict advertising that is likely to create an erroneous impression about a product’s health benefits and other characteristics, and to prohibit or restrict the sponsorship of international events by companies and brands associated with unhealthy foods and beverages.

You can see some of the images posted to Twitter  which show the extent of 2014's junk food promoting World Cup.