Consumer Clout, Consumer Power

By Jean Lukaz MIH, MTS

There’s nothing more vexing than the continual dripping of consumer clichés from consumer rights champions hoping to inspire consumer revolutions through declamatory ranting of ‘consumer rights’ and ‘consumer power’, when the horse is actually ‘consumer clout’. Consumer clout is about ‘being influential’ in getting immediate or later redress when you are wronged without necessarily ‘threatening to use your influence’. Consumer clout is a form of soft power, consumer soft power.

By putting the cart of consumer rights and consumer power to the fore without teaching consumers how to gain influence and become the change they want through educational self-preservation-oriented consumerism, most consumers go about quoting consumer champions and threatening to report to the latter rather than citing and insisting on what they know to be their rights in the particular situation.

CASE STUDY: One fine Saturday, while playing with my little nephew Miguel Yeboah and his friends at his parents Tenth Wedding Anniversary, I got a phone call from Alex Yeboah, Restaurant Manager at Mazera Restaurant, Osu-Accra…
The problem: a consumer is threatening to report the restaurant to a Consumer Rights ‘Don’.
The reason: their Grilled Tilapia is too expensive!

Well, I personally trained this manager as a Consumer Advocate while he worked with me also as a Hospitality Expert. Now this consumer, after being reeducated on the theory and practice of Consumer Protection, and the Manager also referring him to the National Expert on Consumer Protection, could foresee his sudden fall for climbing hastily on an overused prank employed by those with good taste but impecunious. This time the trick was not going to work. Consumer power is not about whom you know and whom you believe to be powerful enough to get you undeserved redress.

Pro 18:17-18 KJV He that is first in his own cause seemeth just; but his neighbour cometh and searcheth him. (18) The lot causeth contentions to cease, and parteth between the mighty.

The customer in question, who was surely on a consumer power trip (eventually turned sour), like many revolutionized Ghanaian consumers, had a default complaints reflex: threaten in making your case and you will win because the consumer is always right! Wrong! His power trip had an unexpected denouement to his dismay. Consumer hard power is for revolutionaries, not advocates and influencers.

As I mentioned earlier, declamatory ranting does not win favours or solve consumer problems. In this age of digital consumption, collaboration=self-preservation=consumer protection.

Firstly, in a free market economy, where prices are determined by the forces of demand and supply, ‘expensive’ is not a business wrong, ‘defective’ is! This consumer seemed to reminisce the coup d’état days of Price Control Laws in Ghana during which period women were stripped naked and flogged in public by the military for hoarding, in order to profiteer from hyperinflation, locally termed ‘KALABULE’. I thought he would rather call the military! This was a typical consumer wrong, no pun intended.

Secondly, Restaurants are licenced and graded by the Ghana Tourism Authority (GTA), which grading will give you a fair idea of what you should expect in terms of quality and price when you resolve to test your consumer power. Fine Dining is not for hungry consumers, but rather for those seeking a fine dining experience for the right price. Street food is the other alternative for hungry consumers who are determined to lose their right to redress for the right price in their haste. At least, you will not be able to trace the seller let alone rant about your consumer rights.

Besides, complaints have got a procedure and there is an International Standard for Complaints Management for businesses developed by the International Organization for Standardization (ISO).

Next time you choose to go on a consumer power trip, please test your budget first.

Teaching Consumers to Fish

By Jean Lukaz MIH, MTS

Have consumers been spoonfed to their detriment that anyone would think of teaching them to fish on their own? Spoonfeeding consumers with Consumer rights and responsibilities, consumer protection laws, consumer-business arbitration, small claims courts, consumer associations, consumer organizations, consumer pressure groups, etc, seem to work on the surface but the days of formal movements and bureaucratic resolution of consumer problems are so 1990.

Advanced World Counterfeiting, Global Contamination
Recent problems of melamine contamination in milk damned China until the Netherlands popped up for fake beef products using rat and other disgusting stuff. Unethical business at the highest level requires expensive technology and, thus, the advanced world lurk as prospects with their fingers pointing to the developing world for counterfeiting. Do not the powerful pharmaceutical companies covertly sponsor the counterfeiting of their competitors’ products with the objective of undermining them? And are not consumers the world over equally affected?

Necessity, Mother of Consumer Justice
Since the days of Martin Luther King Jr and Ralph Nader, consumers have been spurred on by necessity, and their outbursts have engendered change that was not brought about by organized formal institutions that have been established by governments for the sake of civil and consumer protection. Talk about the Arab spring, London Summer, etc… Was it not a consumer problem which triggered the Arab Spring that serially dethroned despots, demagogs and democrats alike?
I call it amoebic consumer reengineering, some call it customer advocacy and even more lately, customer power. The constantly evolving consumer in the digital world has neither shape nor form.

The emergence of the buyer to consumer to customer to client has morphed into another trend all together in this digital age. Consumer Injustice eventually breeds Evolutionary Customer Advocacy, negative as it may be. Love is blind, and so is Consumer Injustice. On March 15, 2013, Consumers International (CI) themed the World Consumer Rights Day on the issue of Consumer Injustice, wherein justice could be churned directly from the injustice, if the consumer microscope is not that maladjusted.

Fishing Businesses in their Own Murky Waters
Some may call it fishing in murky waters. But if the murky waters are unethical business practices then teaching consumers to look for murky waters will almost likely yield results as there’s definitely a fish blinded by their own stirring of the waters to make it muddy for others and thereby entrapping themselves in the cloudiness for the unsophisticated consumer-angler to nip them in the bud. If in the business world, entropy rules, in the consumer world amoebic justice rules.

Digital technologies and web sites like Amazon.com and Epinions.com facilitate communication among customers enabling them to share information about their consumer experiences in purchasing and using products and services and even specialized services such as health care.
Consumers are savvier now due to infinite online information search capabilities including the capacity and tools to verify business claims and do comparative shopping.

Social Consumption, Customer Advocacy
Since consumers began to share their consumption on consumer forums and social network platforms, the scales in their eyes began to fall off. Instead of negatively tagging vociferous consumers as tyrannizing the rest, more consumers awoke to the reality of shared problems from common businesses, thereby raising eyebrows on unscrupulous business practices.

Consumer Protection Advocacy usually championed consumer education and product information in labeling as critical in guiding consumers to make well-informed choices. However, since consumers resolved to take the bull by the horns and began to seek their own form of justice through name and shame on social platforms, businesses have been forced to champion consumer-customer education to the extent of even creating platforms for consumers to do comparative shopping vis-à-vis their competitors’ products. No consumer advocate, consumer protection organization or pressure group invented this. Necessity did!

Those who can, Teach; those who can’t, Act now!

Global consumer movement sets out conditions for a new financial order

· Consumer education not enough, protection is vital

· Measures to restrict emerging monopolies needed

· Ringfence retail banking to protect consumer deposits

· No bailouts without essential services investment obligations

Consumers International (CI), the global federation of consumer organisations, today set out its solutions to the financial fix calling for effective, affirmative, preventative consumer protection as an essential foundation for moving beyond the economic crisis.

Following worldwide consultation with its membership, CI is submitting its position to the UN Conference on the World Financial Crisis, 24-26 June. This follows ongoing contributions to the UN’s Stiglitz Committee and the OECD.

Joost Martens, Director General of Consumers International, stated that “While CI research has shown most consumers manage their finances responsibly, they have been unfairly blamed by governments, media and industry for creating this crisis through irresponsible borrowing, and then prolonging it through insufficient spending. It is high time the so-called experts start listening to consumers, rather than blaming them for the mess the bankers and governments have created.”

In mapping out the consumer movement’s call for a new financial order, CI argues that the financial crisis began with a failure to protect consumers from bad loans in the US and other mortgage markets. A viable fix for the global economy must include greater regulatory oversight of a far more transparent banking industry.

However, whilst transparency is important, more information for consumers is not enough. The system is simply too complex at present and needs regulatory intervention to remove incomprehensible financial products and services.

Robin Simpson, Senior Policy Advisor at Consumers International, has hinted that “Consumer education is a right, but avoiding financial ruin in the current climate takes more than access to information. No doubt the clients of Bernie Madoff thought their money was in good hands, but the billions he embezzled shows we are all susceptible to the faults in the financial system. Better law, as well as better understanding, is needed”.

The meltdown of the financial industry has also led to bank mergers being hurried through by competition authorities. CI is gravely concerned that the banking monopolies emerging from this crisis pose a danger to consumer choice and protection. We therefore call for strict monitoring and reporting requirements to be established to ensure the new financial services landscape works for the consumer.

There must also be a clear distinction between retail and investment banking activities. Only then can consumer deposits be protected from the irresponsible behaviour and risky speculation of the investment bankers.

CI is also concerned that the current seizure of bank activity is denying millions of poor consumers access to basic bank account services and starving critical public utility developments of investment. This is of particular concern in the developing world where the flow of funds is a vital means of achieving improved consumer access to electricity, water, sanitation and financial services.

CI is therefore demanding that taxpayer bailouts come with mandatory obligations to provide basic consumer banking services and investment in major social infrastructure projects.

According to Robin Simpson “The banking sector has elbowed its way to the front of the public expenditure queue as a result of the threat of collapse, effectively holding a gun to the head of government. They cannot simply swallow taxpayer money and carry on as before; firm commitments to provide for basic consumer needs and services must accompany these bailouts. ”

For more on CI’s work in this area, visit www.consumersinternational.org/financialcrisis

Consumer Protection: A Panacea For Shoddy Goods & Services?

by Jean Lukaz

Pundits in Ghana have always pointed fingers at the ineffectiveness of consumer protection associations in the country in the face of the proliferation of shoddy goods and services. Why consumers are thinking along these lines are a wonder. It is as if consumer protection will get into factories and offices and literally rid the country of this menace.  On the other hand, consumer activism stimulates the market to provide products, processes and services that are better and safer.

Hard or Soft Power?

Consumer protection is not about hard power, the use of physical force. It is rather on the contrary. It is about soft power: dialogue, persuasion, understanding, and joint action by consumers, producers and the government. Hard consumer power rather alienates consumers and consumer activists from the government and producers of goods and services. It is in this light that some people feel that lawyers are probably the best activists when it comes to consumer protection but let’s get this right: is consumer protection about litigation and legal threats? Consumers are generally assumed to be laymen, otherwise irrational in their thinking when they are uninformed. The aim of consumer protection is to present safe products and services in plain lay universal language that is understandable by all so that consumers will put products and services to the right use for which they were purposed.

The Weapon

Consumers are not specialists but in consumption. And the only adverse way consumers react is by way of complaints and boycott. An influx of complaints on a particular product or service is an alarm bell and a call to action. Action is not necessarily litigation, which rather ends up antagonising producers of goods and services. Action is about alerting the producer who may not even be aware of the impact of their products on consumers. Complaints, by way of feedback, arm consumers with the reason to proceed to the next level in case of inaction on the part of producers. When consumer complaints are met with arrogance and denials, industry associations are the next places to visit with the complaints. Consumers may collectively channel their complaints through a consumer protection association or other and request for feedback on the action that will be taken by the industry association within a specified timeframe. Where the industry association compromises or is ineffective, the regulator of the industry is the next point of call and consumers may well put their complaints and grievances in writing even after verbally doing so. One would ask about what to do if the regulator fails to act…in that case there is something definitely wrong with the whole process of consumer complaints management process in the industry or country. This requires a microscopic examination of the structures that have been established to give consumers their value for money. The lawsuit is the last resort if you have the money to bring commercial giants into the courtroom. It may not be worth your complaint to sue unless it is intended to generate negative publicity for the producer in order to sensitise the public about their insensitivity.

The Practicals

To put the above into practice, if you are aggrieved for buying a faulty new automobile and the seller or distributor refuses to repair or replace it, you just make sure you put your complaint or grievance into writing and copy it to a consumer protection association such as The Consumer Partnership (THE-COP). The next step is to send another letter on how you have been treated unfairly by the distributor and what action you request to the Automobile Distributors Association (if there is any), attaching a copy of your previous letter to the distributor. Make sure a copy of this letter is also sent to the consumer protection association that received your first letter (this will help them to monitor and fight on your behalf where the occasion arises). If the industry association in question compromises or does not act on your complaint after the timeframe you requested expires (unless they reply to explain) you then proceed to the regulator of the automobile industry in Ghana: I’m not sure who does…Where there is no regulator or a national consumer ombudsman, the Ministry of Trade in this case may be the next point of contact with your new complaint letter detailing the various actions you have taken that have not received any attention and what action you are requesting. Remember to copy this final letter to your correspondent consumer protection association and attach copies of all correspondence to the Ministry of Trade including relevant receipts and contracts (do not send original copies). If the Ministry fails to respond without explanation within a timeframe it is time to talk to some litigant lawyers. In Ghana the Centre for Public Interest Law (CEPIL) may be of help. They may however take a commission from your claim for their effort even if you do not pay any fees initially. Remember the media at this stage but consult the consumer protection association first as they may give your story the right twist. Other consumers will definitely need to share your experience with such an arrogant distributor so they may not fall victim to their wiles.

To Be or Not to Be?

The question under review here is: Does consumer protection bring sanity into a system? The answer may be a yes and no depending on where you are coming from. If you are coming from the USA, where industry regulation is quite effective, then Ralph Nader has already done most of the work so the answer may be a yes. If you are fortunate to come from Ghana, where regulation of industry is rather ineffective, the answer is a big NO! Consumer protection is just one of the answers and its effectiveness is dependent on a number of factors.

Competition, regulation and standards all go hand in hand in giving consumer protection a boost.

Competition forces otherwise producers of shoddy goods and services to put their best before consumers in order to win a market share. Competition, in the face of the market forces of demand and supply, keeps the best actors in business whilst phasing out the bad and ugly. Lack of competition gives consumers no alternatives to substitute shoddy goods and services for as a monopolistic environment may not be a fertile ground for consumer protection fundamentalism.

Regulation outlines legal norms for those in industry and is bound by law that is mandatorily enforced. The contents of regulations are usually a prerequisite for entry into the industry and pre-establish conformity. However, poor regulation is an epitome of a porous enforcement mechanism and corrupted enforcement agents. In a system where there is virtually no enforcement, there is usually a lack of consumer confidence and consumers may resign to their fate. Consumers in such a system will not formally complain as it ridicules them and makes a mockery of the process and will, thus, become apathetic to the activities of consumer protection associations. Complaints are then replaced with word of mouth moaning to friends and relatives. 

Standards when mandatory are part of regulation and provide an automatic platform for consumer satisfaction. Standards are ‘…rules, guidelines or characteristics for activities or their results, aimed at the achievement of the optimum degree of order in a given context’ (ISO/IEC Guide 2). Standards may also be voluntary whereby members of a body establish a code of conduct to guide their operations. Recognition may be in the form of the use of a well-recognised quality mark or trustmark. Companies and individuals use and adhere to standards voluntarily, or because they are required to by law. When compliance with a standard is not mandated by law, companies and individuals follow the terms of the standards simply because it is in their interest to do so — standards improve the quality of products, processes or services, reassure customers and open up markets. The terms of standards may also be incorporated into government statutes and regulations, in which case companies and individuals must follow them as a matter of law. In some cases, governments initiate and participate in standards development so the standard can be included in legislation. In other cases, governments find that an existing standard can be used to deal with a public policy problem and include it in new legislation.

Complaints, in the face of standards, are also endemic in an environment characterised by corruption, non-conformity and non-enforcement of standards. Consumers, acting rationally, would want the best products and services at the least cost that is readily available. Thus, consumers would look out for certain elements that have been traditionally infused into standards such as health and safety, fitness for purpose (performance), product information and labelling, environmental protection, fair pricing, interoperability (ability of a product to be used in different countries and within a product range) and systems of redress. However, oblivious to the prevalence of shoddy goods and services, consumers may also presume that all products and services on offer are safe for their use- a danger to their health and safety.

So if you find yourself in a country where competition is virtually non-existent, regulation lacks enforcement and where standards are not really working, the only way forward is consumer participation in standardization. When consumers are represented in the standards-making process, their views are taken into account and it subsequently forms an automatic basis for consumer satisfactions albeit this will still require a stringent enforcement mechanism to be manifest.

Consumer participation is also beneficial for manufacturers, because goods and services that adopt standards developed with consumer participation may be more easily accepted in the marketplace.

 

Published in Public Agenda on 11th December, 2006: www.ghanaweb.com/public_agenda

http://www.theconsumerpartnership.org