New consumer ‘supergroup’ must define its purpose

consumer_focusConsumer Focus, the group that replaces three major consumer bodies, faces a tough task persuading consumers and the industry that its one-size-fits-all approach will improve on the status quo.

The new body replaces Energywatch, the National Consumer Council and Postcomm in October, with supporters suggesting the “supergroup” is more streamlined. But some industry executives argue it is spreading itself too thinly at the cost of consumers. So much so that, if unsuccessful, it may see itself split off once again.

It will at first concentrate on the energy sector, but some in the industry believe that in an era of soaring fuel prices, consumers need proven expertise, not a one-stop shop.

It was created as part of the Consumers, Estate Agents and Redress Act that received Royal Assent in July last year. Its first task must be to ensure consumers are aware of the change. The group, which has the strapline: “Campaigning for a fair deal”, is considering the appointment of an advertising agency to handle its £15m launch (MW last week). Fuel poverty will lead its initial campaigns and its remaining remit is “out to consultation”.

USwitch director of consumer policy Ann Robinson says consumer awareness is a big issue. “Consumer Focus could be of huge campaigning benefit to consumers, but I would like it to be focused and not spread too thinly. I am still worried about consumers being left on their own to fight.”

Some also question the appointment of Consumer Focus’ leader, NCC chief executive Ed Mayo. Last week, Mayo suggested the UK effectively subsidised the French energy system, a comment that his detractors say underlines his naivety over such a complex issue and has led to calls for him to prove – and improve – his industry knowledge.

Energywatch, led by chief executive Allan Asher, had two clear roles – lobbying on behalf of consumers and operating an advice service. An insider says: “You need that expertise on the end of the phone.”

But a Consumer Focus spokesman argues the dissolved consumer groups will have “a presence” in the new organisation. The new framework will be putting the onus on energy companies to resolve complaints, through the fear of the specific “energy ombudsman”, who has the power to decide on compensation. It will also have an “extra help” unit for vulnerable customers such as those under threat of disconnection.

Government policy

The new group will work with Government helpline Consumer Direct, which will handle the complaints side of the business and inform consumers of the existence of the ombudsman. Energywatch was founded in 2001 to address fears of a gap between Government policy and consumers’ understanding. The NCC and Postcomm were set up with similar aims.

If the industry itself is confused about the new body’s function, consumers will have little hope, according to an energy industry executive. He questions how post and energy “come together”.

Greater powers

But the Consumer Focus spokesman argues the new body has “greater powers” so can look at “any area of general interest”. “There has been a piecemeal approach and that is no longer the case,” he says.

Although the group aims to “empower the consumer”, it also has powers to lobby the Government and the industry, including its regulators.

Consumer Focus has until October, when it officially launches, to court its sceptics. As an unproven entity it needs to make consumers aware of its presence, as well as prove it is equipped for tackling the flailing energy sector.

Kate O’Flaherty

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