Empowering and Protecting Consumers

03 Nov 2011

Response by TrustMark, Sept 2011

TrustMark is pleased to have the opportunity to respond to this critical consultation on the future of the consumer protection landscape. We also offer views that touch on topics raised in the strategy document 'Better Choices: Better Deals'.

Our views relate primarily to how these proposed changes will impact on the UK's domestic repair, maintenance and improvement (RMI) sector - in other words, the consumer information, education, advice and protection of householders looking to carry out repairs or improvement work in and around their homes.

Views have been gathered from representatives on TrustMark's joint industry/consumer forum, and from TrustMark's Board which includes independent, industry and consumer representatives.

Why do TrustMark's views matter?

1. The domestic RMI sector is worth an estimated £27 billion per annum (OFT research, June 2011).  While recent figures from OFT suggest that only 3% of consumers surveyed reported being dissatisfied with the outcome of home improvement and repairs work, we do know that cowboy builders and rogue traders generally in the RMI sector present a considerable consumer detriment.  For example, in the year to March 2011, Consumer Direct received 70,000 complaints from consumers about general home improvements, maintenance and repairs, and an additional 15,000 specifically about the glazing sector.

2. The RMI market is growing, boosted in part by a depressed housing market which encourages homeowners to 'improve not move'.  We also anticipate a substantial increase in RMI work triggered by initiatives next year to refurbish and improve the UK's existing housing stock via the proposed Green Deal.  Early estimates suggest that even just a 25% uptake of Green Deal work in pre-1980, owner occupied homes would add another £2 billon a year to the RMI sector for associated works and repairs required over and above the Green Deal work itself.

3. Much of this work may begin just at the same time that the consumer landscape changes are taking effect.  We are very keen to ensure consumers will know where to go for advice and will be signposted to reputable firms during this period of change and for the future.

4. TrustMark is a good example of co-regulation and a flexible, cost-effective approach to consumer empowerment.  A Social Enterprise, we signpost consumers to reputable tradesmen who are vetted, inspected and monitored and who work to Government-endorsed standards. (See more about TrustMark in Appendix A).  We have six years' experience of the sort of consumer empowerment and safeguards that the Government now wants to extend, so in our responses below we are able to offer insights based on real life experience.

1 Information & Advice

QUESTION 1. How do you think the provision of consumer information to consumers can be improved upon?

5. When it comes to the provision of consumer information in the RMI market, our view is that additional regulation in the sector is unnecessary. What matters most is reducing fragmentation and more joined-up signposting by the key agencies, independent third sector organisations, trade bodies and advisory services that touch the consumer throughout the process of finding help to repair, maintain or improve a home.

6. In terms of reducing fragmentation in the consumer landscape, we support a one-stop-shop approach, effectively integrating and rationalising the offering, bringing the best together in one place or syndicated to many places.  Citizens Advice may be in a position to take the lead with other organisations to achieve this. TrustMark will certainly continue to give Citizens Advice our full support to deliver RMI advice to consumers.  Success of this approach will also depend largely on the visibility and promotion of this service, particularly online and at local grassroots level, so it is vital that the proposed changes do strengthen central support structures to ease the pressure on local Citizens Advice Bureaux.

7. The joined-up approach is particularly important in the provision of information to the most vulnerable groups. Research by OFT in the RMI sector shows these groups include younger consumers too.

8. Good examples of a joined-up approach must be encouraged, for example:
• Collaboration on public information campaigns which use social media as well as traditional media channels to reach consumers, such as the recent OFT Doorstep Selling campaign which was supported by TrustMark.
• Partnerships between bodies like TrustMark and Citizens Advice to ensure RMI advice, leaflets and information is provided via every Citizens Advice Bureau.

9. We must caution consumers about reliance on 'consumer feedback' websites in the RMI sector. We are aware of many websites which claim to put consumers in touch with local tradesmen where no initial vetting has been carried out and the 'consumer feedback' is entirely unreliable. Many sites are simply glorified advertising directories which charge firms for listings or job leads. With so much of the work either hidden or of a technical nature, this also makes it very hard for a consumer to judge the performance of a tradesman - this is also why TrustMark is the only scheme in the UK to require onsite inspections of registered firms carried out by qualified inspectors who know the trade in question. Further information on our grave concerns about 'consumer feedback' sites in the RMI sector is in Appendix B.

10. We agree that public money need not be spent on generating consumer information where such material is available free of charge from an authoritative source.  However, Government should provide clear endorsement of the most reputable sources.  For example, research shows that it is the visible support of Government which keeps self-regulation schemes like TrustMark working and creates confidence among tradesmen and consumers alike.  We agree with the consultation statement 1.5 regarding public body endorsement of voluntary codes of practice and standards.

QUESTION 2. Do you agree that the OFT's consumer information role should be transferred to the Citizens Advice service?

QUESTION 3. Do you agree that the Extra Help Unit should be transferred to the Citizens Advice service?

11. Yes, TrustMark supports the transfer of these roles and responsibilities.

2 Education

QUESTION 4. Do you agree that the OFT's consumer education roles should be transferred to the Citizens Advice service? What are your views about the types of consumer education activity that are most valuable and how they should be managed and coordinated?

12. Education of consumers when they embark upon RMI work is critically important, particularly for first-time householders (anyone who has responsibility for the upkeep of a property and its grounds). Consumers need to know where to turn in a home repair emergency, as well as how best to approach a planned home improvement project.

13. The most valuable consumer education work in the RMI sector comes at important milestone events - typically when people first enter the housing market, or when they prepare to alter a property to reflect changing lifestyles (arrival of a new child, empty nesters etc).

14. We must get to such people before they make a purchasing decision in order to signpost them to reputable firms, and we must then help them become better clients - able to negotiate a mutually acceptable contract, proactively manage the job, communicate with confidence, understand the work that is being done and treat the tradesman with respect.

15. Education about a home's upkeep is also going to become increasingly important as our homes and gardens are impacted by the uptake of renewable energy technologies and other systems which are not yet well understood.

16. We believe that the consumer education role could be transferred to Citizens Advice to coordinate with other organisations, making these educational campaigns available to other organisations such as TrustMark to promote.  This proactive and coordinated approach will also help to address any potential consumer perception that Citizens Advice is there to help after a problem, rather than as the best source of advice beforehand to prevent the problem in the first place.

17. TrustMark will pursue continued opportunities to join forces with Citizens Advice and other bodies to promote its new tools which help consumers know how to deal with tradesmen.  We are also keen to partner with Citizens Advice on awareness-raising campaigns with estate agents, mortgage lenders, housebuilders, surveyors, garden centres and DIY retailers, all of whom touch homebuyers and property owners at critical stages in the RMI journey.

QUESTION 5. Do you agree that the proposed Trading Standards Policy Board and the TSI should coordinate and support business-facing educational activities?

18. Education of business in the RMI sector is also very important, particularly making SMEs more aware of the laws regarding consumer protection and best practice in customer care and treating consumers fairly.  A coordinated response through the Trading Standards Policy Board and the TSI delivered to others including TrustMark would be a model that TrustMark would support.

19. Regular discussion and information-sharing meetings in the RMI sector (such as TrustMark's quarterly joint industry/consumer forum meetings) also provide an essential opportunity for trade associations, certification bodies, retailers and private organisations specialising in building and associated trades to meet with representatives from Trading Standards and other consumer protection bodies. TrustMark is the only organisation to facilitate this sort of dialogue and collaboration in the RMI sector, and we would hope that the Trading Standards Policy Board and the TSI will continue to support and take an active role in these meetings.

20. TrustMark scheme operators distribute important information to members' firms to raise their awareness of critical consumer protection issues, and we will support the ongoing provision of relevant business information provided by the TSI and others.

3 Consumer Code Approvals

QUESTION 6. What are the best options for current and prospective CCAS members to consider in the event that the Government's proposed consumer and competition landscape proposals are adopted?

21. TrustMark has considered the benefits and processes that currently exist with the CCAS scheme.  We believe that there is value to businesses and consumers from a Government-endorsed code approval system.  However the current system is recognised as too bureaucratic and tardy.  We feel that should the BSI standards/PAS route be taken this will remain the case, and will lose attractiveness to future code promoters.

22. The alternative suggestion of involving Primary Authorities is potentially more streamlined, but our experience shows that assessing and auditing trade associations and other scheme operators is very different to the work of assessing and auditing individual big businesses.

23. TrustMark's view is that CCAS needs a central body to own, amend and develop the codes.  A single national body would ensure consistency of standards across a variety of codes, and would deliver a single point of reference for consumer complaints. It could also help to provide consistent feedback and legal support that has been so valuable to code promoters to date. This coordination role needs to be both proactive and reactive.  TrustMark already operates a similar role liaising with scheme operators in a tiered system.  We believe this model could be adopted to continue and develop the CCAS system, and we are interested in further opportunities to discuss this option with Government and with code promoters themselves.

QUESTION 7. Do you think that the private and voluntary sectors, together with local authorities, will respond to any winding down of CCAS with effective alternative systems of accreditation?

24. There would be a negative effect and therefore it would be inappropriate to wind down CCAS which has achieved a great deal.  However a review of operations and procedures could enable a national replacement body to become more efficient at introducing more codes within new business sectors.  If CCAS was wound down, there would be little if any incentive for anyone to reinvent the wheel.  The time and effort put in to achieving CCAS status by those organisations and their members must not be underestimated.

QUESTION 8. What are the lessons learned from the operation of CCAS which may help in establishing (or revising) voluntary schemes in the future?

25. One point that is already clear is the need for continued rigour in approach but faster processing of applications - TrustMark has achieved this by close working throughout the application process of our scheme operators, providing feedback at all stages.  The charging of a non-refundable application fee also ensures real commitment to the process.

QUESTION 9. What is your view on transposing CCAS-approved codes into standards and related documents such as those published by BSI?

26. See above.

QUESTION 10. What characteristics would a Kitemark based code certification process need to have to meet industry requirements?

27. We do not yet see the benefits of Kitemarking codes.

QUESTION 11. What is your view on extending the Primary Authority concept to code certification?

28. See above.

4 Consumer Advocacy

QUESTIONS 12 - 15

29. TrustMark believes that an overriding principle for advocacy should be non reliance upon subscription arrangements i.e. a free service.  Equally the combining of advocacy services can only help to provide efficiency and ease for consumer access. In relation to the specific suggestions, we believe that others may be better equipped to answer these points.

 

5 Information gathering powers

QUESTION 16. What are your views on these options for the transfer of information gathering powers? Which is preferable and why? Are there any other options for information-gathering powers?

30. Giving statutory powers to Citizens Advice to be able to demand information from any regulator, business or individual could fundamentally change the nature of the organisation and its relationship with the public. Others will be better able to comment on the legal issues this creates, but TrustMark's instincts are that all statutory powers should stay with public bodies and that these responsibilities may be better served as part of the enforcement role, rather than consumer information and education role.

6 Redress schemes

QUESTION 17. What are your views on whether redress schemes such as those established in electronic communications, financial services, energy and postal services should be extended to other sectors?

31. TrustMark is in favour of redress schemes generally.  But we would advocate different ways of achieving this in differing sectors.  For instance, the tiered complaints process with TrustMark achieves redress in the highly fragmented RMI market without the need for individual sectoral ombudsman schemes to be created.  This approach also helps to ensure effective consumer redress does not put unnecessary additional costs on business, particularly SMEs.

7 Transfer of functions from Consumer Focus Post in NI

QUESTIONS 18 - 19

32. These issues are outside the areas of our expertise and there are others better able to answer these questions.

8 Enforcement of Consumer Protection Legislation

QUESTION 20. Which option for reform of enforcement powers and responsibilities do you prefer, if any, and why?

33. TrustMark has a long-standing relationship with Trading Standards Services and we value the expertise and professionalism that is apparent.  We therefore agree that the best model would be option 3, which again builds upon current best practice.  The Policy Board has worked effectively as a voluntary network and to assist it with funding and this responsibility would create a model far stronger than that it replaces.

34. However, with the imminent arrival of the Green Deal and the wave of associated building and repairs work that we expect it will cause, TrustMark shares the concerns outlined in consultation statement 5.34 regarding the very difficult financial and resource restrictions currently affecting Trading Standards Services and the ability of some services to pursue high visibility enforcement action against rogue traders in the RMI sector.

35. It must be recognised that much more could be done by effective education of the public, thus reducing complaints and consumer detriment.  Extra effort put into the provision of good advice and consistent signposting by Citizens Advice and its trusted partners to consumers before they undertake RMI work would reduce the need for Trading Standards' involvement and enforcement later on. In our sector in particular, prevention is always better than cure.

9 Role of the Competition & Markets Authority

QUESTIONS 25 - 29

36. TrustMark believes that the model proposed with Citizens Advice and the Trading Standard Policy Board would be an effective means of considering consumer detriment analysis.  This will build upon the work that the organisations involved already conducts and so would be an effective and efficient model.

10 Cases that cross over institutional boundaries

QUESTIONS 30 - 31

37. We believe that the proposed collaboration is the best way to achieve outcomes for consumers.  The level of resource required is something that others may be better able to comment upon.

11 Other current OFT roles, and potential delay to CMA

QUESTIONS 32 - 40

38. With regard to questions 32 to 39, we agree with the Government's analysis and suggestions in these regards. However, TrustMark wants to see the consumer enforcement landscape settled as quickly as possible. There are many opportunities that arise that will substantially develop and strengthen the landscape.  The consolidation, integration and utilisation of existing processes is a step forward to simplify and deliver effective protection for consumers as well as encourage economic recovery.  We therefore feel that the proposed changes should be implemented as soon as possible irrespective of any delays to the creation of the CMA.

Appendix A - About TrustMark

• For a long time there was no national scheme to signpost consumers to the good firms. This is why TrustMark was set up in 2005 and launched in 2006 as a Government-backed quality mark scheme for tradesmen. It operates under licence from the Department for Business, Innovation and Skills (BIS). TrustMark provides a free and easy service to householders to select a tradesman with confidence, knowing the firm's competence and fair trading practices have been independently checked. 

• Tradesmen/firms are vetted and then registered with TrustMark via Scheme Operators.  TrustMark acts as the oversight body for 38 Scheme Operators (trade associations, commercial organisations, local authorities, certification schemes etc).  This ensures consistency of standards across a wide range of trades.

• Scheme Operators and their registered tradesmen/firms sign up to a carefully-monitored and audited code of practice that includes insurance, good health and safety practices and customer care. TrustMark is the only organisation to require on-site inspections to check tradesmen's workmanship - and these checks must be carried out by independent, qualified inspectors. These standards are developed by a range of consumer and industry interests in order to achieve the right balance between consumer protection, industry practicalities and costs.

• TrustMark registered firms are able to offer an insurance backed warranty to homeowners for jobs over £250. This insurance covers deposits, pre-payments and work in progress should the firm cease trading. It also covers, as a minimum, two years warranty on materials, design and workmanship. TrustMark is currently reviewing options for making such a warranty mandatory.

• TrustMark is wholly funded by the construction industry (a fee is charged for every registered firm). It does not get any funding from the tax payer. It is a registered Social Enterprise, has no shareholders to pay and is run as a not-for-profit company limited by guarantee.

• TrustMark meets Government's needs in terms of:

 Providing consumer empowerment - including advice and user-friendly ways (via web and telephone) for consumers and vulnerable people to find trustworthy and reliable tradesmen to carry out repairs, maintenance and improvement (RMI) work.

 Supporting and strengthening SMEs in the construction industry - increasing public confidence in their work and creating opportunities for growth in the RMI sector, with a low cost self-regulatory mechanism that does not impose excessive bureaucracy or costs on business.

 Strengthening the Green Deal agenda - providing an established scheme to ensure robust standards, monitoring and consumer redress for all the associated repairs and building work that will inevitably arise as a result of a major retrofit of the UK housing stock (and which will also impact on the success of the Green Deal measures and promised energy savings).

• TrustMark has the support and involvement of various consumer affairs organisations including the Trading Standards Institute and Citizens Advice, and acts as a conduit to bring industry and consumer groups together which helps to inform and improve consumer affairs policy.

• TrustMark has the largest database of accredited tradesmen in the country, providing national coverage with almost 20,000 trades listed on its database. Over 90% of TrustMark-registered firms are SMEs, but it also includes some much larger national firms.
• In 2010 TrustMark tradesmen's details were viewed 3.5 million times - an increase of 8.7% on the previous year.  There are about 300,000 viewings of firms' details per month on www.trustmark.org.uk

Appendix B - 'Consumer feedback' websites and the RMI sector

"Consumers can shortcut traditional accreditation schemes and instead get access to the opinions and experiences of people just like them."  (Consultation statement 2.6)

Unfortunately this statement is not necessarily true or a wise option in all cases, and reliance on 'consumer feedback' sites potentially creates greater vulnerabilities for consumers in the RMI sector.

Feedback sites are ideally suited to regular, uncomplicated consumer purchases which do not rely on the customer having technical knowledge and where all the work/product/service is visible and easily understood. This is not the case in the RMI sector.  Consumer feedback may be useful on elements of customer service (the tradesman turned up on time, left the site tidy etc) but this gives no reliable indicator of a firm's competence or suitability to do the work that's required.

TrustMark is acutely aware of the risks caused by websites which claim to be a "cowboy free zone" and purport to give reviews from consumers who have used tradesmen to do work in and around their home:

1. In many cases, firms are paying a fee to appear on the website. They are not vetted properly, if at all.  They are often sent unlimited numbers of 'feedback forms' to give out to customers (or anyone else), with incentives to get as many of these forms returned as quickly as possible.

2. There are very rarely any checks that such feedback is genuine. Out of 10 or more websites we surveyed that claim to offer this consumer service at present, we found just one that claims to do any "spot checks" - and this is only on 10% of their users' reviews. 

3. Even Which? Local, which is able to check up on reviews because it has a lot of detailed information about its subscribers (who are the only people who can use this service), tells us that it rejects about 15% of customer reviews because they think they are faked and agree that others are probably slipping through the net.  This unreliability is why they won't allow businesses to use these customer reviews or claim any endorsement.

4. In most cases, consumer feedback websites in the RMI sector do not publish negative reviews at all, or build in long delays before this feedback is visible to other users.  Mumsnet and other discussion forums are full of public comments complaining about this, and anecdotal evidence suggests that when a negative review is published it can sometimes result in more problems or even abuse to the householder afterwards.  Unsurprisingly, people are therefore reluctant to give less-than-positive feedback when a tradesman has already been in their home.

5. In one case we saw, a website urges users not to worry about negative comments anyway: "Don't discount those [firms] that have an occasional bad result - they may be a good bet."

6. Where positive comments are visible online, it is clear that in many cases these are coming about as a result of business-to-business relationships - for example, roofers, electricians or other tradesmen used as sub-contractors by a local builder or developer.  For example, it is unlikely that typical comments like "have used this firm to do roofing work five times in the last year" relate to a householder's experience.  Comments can never be assumed to be coming from "someone just like me".

7. Ultimately, in the first instance what consumers need is to be signposted to reputable firms who have been checked properly (including onsite inspections of their work by inspectors who know what they are looking at).  Only then might some additional feedback mechanism be helpful - so long as that feedback can be properly verified.  TrustMark's view is that this is very difficult to do properly. 

8. In the meantime, consumers using these 'find a trader' type sites must still do their own checks and must continue to treat the firm with caution - which defeats the object of these sorts of websites anyway.

9. As the 'Better Choices' strategy document states: "The challenge for consumers is often in knowing what is relevant information and what is not; knowing what is accurate and what is not; and what can be trusted and what cannot."  TrustMark supports the Government's ideas about creating a quality mark for web and comparison sites, and particularly welcomes targeted enforcement action against any websites in the RMI sector that are failing to protect the integrity of genuine consumer feedback and are undermining any trust consumers might have in this market.