The global voice for consumers

1. The global voice for consumers The global voice for consumers La voz global para la defensa de los consumidores La voz global para la defensa de los consumidores La voix des Consommateurs à travers le monde La voix des Consommateurs à travers le monde

2. Harnessing business & consumer interests; is statute the only way? Robin Simpson Consumers International Fair Trading Commission of Barbados February 8 2008

3. What is CI? • Global federation of consumer organisations • 220 member organisations (mostly independent, some governmental)in 115 countries • Offices in London, Santiago, Kuala Lumpur • Working with UN on consumer protection guidelines

4. Is statute the only way? • No

5. The usual suspects (1) • General consumer protection: • Conduct – unconscionable, misleading, unfair • Contract terms – implied terms and warranties • Product safety • Information disclosure • Redress and penalties inc. product liability

6. Usual suspects (2) • Competition • Sector specific legislation; (rather less usual)

7. Consumer rights - CI • Satisfaction of basic needs • Safety • Information • Choice • Representation • Redress • Consumer education • Healthy environment

8. UN-legitimate needs • b) promotion…. of economic interests • a) protection from hazards to health/ safety • c) information for choice • f) freedom to form CAs & represent views • e) redress • d) consumer education • g) sustainable consumption

9. Self regulation - UN • Art 1 high levels of ethical conduct • Art 16 laws & standards, CA monitoring • Art 26 codes of marketing ..voluntary agreements..adequate publicity • Art 32 Governments: redress..formal & informal..fair, expeditious,inexpensive, accessible • Art 33:enterprises..resolve disputes (ditto) • Art 34 information on above

10. Is SR for special markets? • ‘Dysfunctional markets’ (EC and OECD) • Eg: • funeral services – funeral ombudsman • legal services – legal services ombudsmen • Natural monopolies – state regulators • No need to deviate from basic CP

11. Definitions of self regulation (1) • Delegated • Voluntary • Hybrid • No pure model • Delegated may be too rigid • Voluntary may be too loose

12. Definitions of self regulation (2) • Unilateral codes of conduct • Customer charters • Unilateral sector codes • Negotiated/approved codes • Recognised codes • Official codes/guidance • Legal codes

13. Code approval criteria • Sponsoring body • Beyond legal minimum • Significant coverage • Involvement of independents • Complaints mechanisms + low cost redress • Disciplinary sanctions • Publicity • Monitoring and reporting inc. annual review + report

14. Strengths of SR • Flexibility • Promotion of good practice (pos. not neg.) • Industry identification with code • Culturally flexible • Burden of proof/ • Cheap/rapid redress? • Cost borne by industry

15. Weaknesses of SR • Dilemma: Limited coverage or Barriers to entry • Non members may undercut standards • Requirements may be ignored – just PR • Multiplicity confuses consumers • Sanctions may be weak or monitoring poor • Consumer scepticism • Conflict of interest for SRO • May deter legislation

16. Strengths of legislation • Governmental authority • Obligatory compliance • Comprehensive coverage • Content not vetoed by industry • Consumer credibility

17. Weaknesses of legislation • Legislative time squeezed • Negative rather than positive – ‘shalt not’ • General legislation vague • Precise legislation complex • Criminal law unwieldy • Built in obsolescence • Unintended consequences

18. Evolutionary theory • Self-regulation:stakeholders (predominantly industry) take the initiative to set standards for the benefit of consumers. The government or regulator need not have formal involvement. • Co-regulation:businesses and consumer stakeholders negotiate consumer rights and business obligations with each other under the auspices of public authorities with legal effect • Industry-led regulation

19. Recent industry led regulation • US - children’s food and drink advertising: one jump ahead of legislation • UK Advertising Standards Authority • EU –cross-border selling, eg timeshare, • OECD – financial services • Even Russia?

20. Role for CAs • Denmark: negotiating codes • Belgium: standard contracts • NL: public utility contracts • UK regulated sector guaranteed standards • EU wide: CA participation in alternative dispute resolution (ADR)

21. ADR • Arbitration and its critics • Mediation and its critics • French credit commissions • Statutory ombudsmen: public and private sectors, national and local • European downgrade of adversarial principle

22. Limits of ADR • Civil rights or constitutional precedent • One party has no legal competence • Substantial power imbalance • Legal issue to be decided • Injunction needed • Tactical move – bad faith

23. Check list • Public confidence, public reporting, publicity • Autonomy, external presence, • Standards and performance indicators • Clear complaints procedures • Monitoring of compliance • Independent resolution of disputes • Adequate resources • Flexible evolution

24. Thank you • Rsimpson@consint.org • Robinpsimpson@gmail.com