HIES Respond to BEIS Modernising Consumer Markets Green Paper

HIES has been resolving consumer complaints in the renewable industry since 2015 and over 90,000 consumers have benefited from the reassurance that if their installer can’t or won’t help them with their complaint – we will.

HIES responses to BEIS Green Paper

We responded to questions 12 to 15, which concerned Alternative Dispute Resolution (ADR). We believe that consumers should have access to free, speedy ADR which is conducted by subject matter experts who know the market and how to skilfully and fairly resolve consumer complaints. The green paper can be found at https://www.gov.uk/government/consultations/consumer-green-paper-modernising-consumer-markets

We have proposed a dispute resolution model which is based around consumer education and enforcement of the standards. In our experience, any scheme which cannot robustly police its members will struggle to show that it has any effect on the industry that it self-regulates.

Response to consultation questions (12-15)

12. How can we improve consumer awareness and take-up of alternative dispute resolution?

Currently, the law regarding traders mentioning ADR to consumers is confusing. As it stands, a trader should point a consumer towards an ADR scheme, but the trader is not obliged to use it.

We feel that ADR schemes should be closely linked to consumer advice and education. Consumers should feel that membership of an approved ADR scheme or Ombudsman is a driver of choice as they feel that they will be protected before, during and after purchase. Traders should be proud to be members of a scheme and prominently display it in marketing literature, at the point of sale etc. It should be noted that the Consumer Contracts Regulations 2013 places specific obligations on traders to declare membership of a code of conduct or ADR scheme.

Consumers should be made aware of the benefits of ADR over going to court:

  1. ADR schemes are usually subject matter experts who specialise in consumer redress, meaning that the ADR advisor is likely to understand the technical details of the complaint
  2. There is usually no cost for the consumer to access ADR
  3. ADR can be significantly less time-consuming than going to court, for example, our average time to resolve complaints through our HIES scheme is just 7 days

In our experience, businesses want to get things right and going through the ADR process helps them improve their service to consumers.

Although businesses can charge a nominal fee for consumer access to ADR, we believe that the average consumer would be put off by this. So, to promote ADR to consumers, access to ADR should be free.

13. What model of alternative dispute resolution provision would deliver the best experience for consumers?

An ideal ADR provision would consist of consumer education and enforcement.

A consumer who comes to us in the first instance will be advised and educated on how to resolve their complaint. If this is unsuccessful then we can get involved and contact the trader on the consumer’s behalf.

For enforcement, ADR can help. It is often a welcome alternative to Government regulation and can be achieved at no cost to the tax-payer. An example of where enforcement works well is in the renewables sector. A trader who sells renewable heating or electric systems to consumers must be a member of a recognised consumer code. Failure to do so will mean that the customers will not be able to access Government incentives. Traders who generate numbers of complaints, fail to take part in ADR, or disregard Ombudsman decisions, can find themselves taken off our scheme. We, along with the other consumer codes in operation in this market, have all signed up to a memorandum of understanding (MoU) to stop businesses code-hopping when they generate several complaints. Without membership of an approved consumer code, a trader cannot operate in this market.

Without robust enforcement, either through agencies such as trading standards or through industry policing themselves, self-regulation and ADR could fail.

14. How could we incentivise more businesses to participate in alternative dispute resolution?

In our experience, those businesses that are generally compliant and positive about consumers are already likely to be a member of an ADR scheme.

Businesses would only be incentivised to join voluntary ADR schemes if they were able to see significant financial or operational efficiency savings, which could be achieved through effective Government campaigns and case studies. The only alternative is to make ADR mandatory on an industry by industry basis.

We believe that ADR should be compulsory where there is evidence to show any of, or a combination of:

  • High levels of consumer detriment
  • Low levels of enforcement from statutory bodies
  • Large numbers of vulnerable consumers

15. Should there be an automatic right for consumers to access alternative dispute resolution in sectors with the highest levels of consumer harm?

Yes. Where there are high levels of detriment there should be an automatic right to ADR. Government Policy should be flexible in this area to consider emerging threats.

We look forward to seeing the results of the green paper response and are happy to share our expertise with Government through working groups.

If you have any further questions or would like to know more, please contact Adrian Simpson – a.simpson@hiesscheme.org.uk

Featured photo by ijeab  at Freepik