Regulators in the energy, water, telecoms and financial service sectors take different and often inconsistent approaches to tackling consumer issues and have not made enough progress in working together, according to a new report from the Public Accounts Committee. What is more, it is a “huge part of the problem” that regulators believe competition will lead to the best outcomes for people, the Committee said. The regulators must “ensure that competition leads to better services and more choice for consumers, rather than presenting opportunities for them to be exploited by suppliers”.
The MPs said regulators should be more specific on what they are trying to achieve for consumers, and how they will measure and report on their progress.
The report says consumers are facing serious problems with accessing essential services: affordability constraints, difficulties accessing the best deals, and confusing and often incomprehensible bills. Vulnerable consumers, in particular, face a number of common challenges.
But consumers are being penalised for loyalty: estimates suggest that people who do not switch their energy, telecoms and financial services providers could be overpaying by up to £1,000 a year. And while the expansion of digital platforms has increased accessibility in many respects, it has also restricted it and digital exclusion is cross-sector problem.
The PAC said it was concerned that the regulators’ variation in approach is leading to disparity in consumer experience. The regulators have different rules and principles for providing information, determining redress and dealing with vulnerable customers and those in debt. Government and regulators must work more together to solve the problems. Where they do work together progress has been too slow, the MPs said.
Regulators are not clear enough about what they are trying to achieve for consumers. Their intended outcomes, such as affordability ”are commendable ambitions but are not specific or measurable, and therefore cannot be used to judge progress.” Nor do theregulators have a good enough understanding of their impact and effectiveness.
Read the full report