Tuesday, February 19, 2008

There is little Ode to Joy for Irish Consumers!!

Quelle Surprise! Another report tells us that we are being ripped off compared to our EU counterparts. Forfas published a report last week which reminds us again just how much over the odds we are paying for everything. Well that is all very good, but what we need now is an action plan to actually address the underlying reasons why the cost of living is so high here. We need a co-ordinated Government response to inflation, we need to overhaul the consumer redress system, we need to either reform or if necessary replace the underperforming regulators and we need to take on the vested interests and inject more competition into the economy. And of course I would say this....we need to make sure CAI and others coming from a consumer perspective are at the table when key decisions are being made to ensure the voice of consumers is heard.

Also last week Paul Kelly in the Irish Examiner did an excellent piece on inflation for everyday costs, in particular food. Its shows that flour has gone up 52%, butter up 27%, milk up 22%, eggs up 16% to name a few. While the overall inflation rate has come down to 4.3% (still very high) in January 2008 these everyday costs have skyrocketed, which hits vulnerable consumers on low and fixed incomes the hardest.

Well what can the EU do to address our inflation problem? The single internal market was supposed to bring extra choice and competition. I think we have got the choice, but the competition has been slow to arrive. Yes, large International and European multinationals have come into the Irish market, but in most cases (perhaps Bank of Scotland-Ireland concerning mortgages is an exception to the rule) rather than shake up the market, seeing how cosy and easy it was to overcharge, they nestled into the Irish way of doing things. So as is confirmed by the Forfas report, Irish consumers have not seen much of the benefits of a single market.

Ode to Joy for Irish Consumers?

The debate on Europe will dominate the political agenda in the coming weeks and months. On a personal basis I am pro-EU and will vote yes for the Lisbon Treaty. It would be easy to blame Brussels for the failure of the single market to benefit consumers. Thats not to say that the EU couldn't do more and I do worry about the army of business and corporate lobbyists who descend on the EU institutions every day to press the case of vested interests. However as with environmental and social legislation, some of our more progressive consumer legislation has been driven by the EU and the actions on flight rights and mobile roaming have been welcome.

What we need to see is a commitment by our own Government and the regulatory bodies here to ensure the full benefits of the single market are passed onto consumers, and that unfortunately has been mostly lacking to date.

Sunday, February 10, 2008

Going, Going Gone...Consumers patience gone waiting for laws to protect them in property market!

Property for Sale, great river view, no basement!

There is a certain pattern to political events and action in Ireland. There is a crisis or media storm, Minister responsible wants to be seen as taking action, so he/she sets up a committee/taskforce to look into it. The group is told to report without delay given the urgency of the matter which they do....and then the findings of of the report remain unimplemented until another crisis/event occurs a number of years later.

And so it is with regulating auctioneers, estate agents, letting agents etc. In 2004 Michael McDowell set up a group to review the sector in light of concerns expressed. It worked very speedily and produced a report in 2005. In the interim the Government set up an implementation group....(I hope you are still with me on this) and last year the National Property Services Regulatory Authority was established on an ad-hoc basis. However as of today it doesn't have any statutory powers, so while it is engaging in preparatory work, it cannot regulate the activities of estate agents and auctioneers and cannot investigate complaints from property buyers and sellers if they arise and where necessary impose sanctions and award compensation.

This delay is unacceptable, in July 2005 the Government promised it would bring in these laws and two and a half years later, the latest information from the Government website suggests that the necessary legislation will not be published until late 2008 and given the time it takes for bills to go through the Oireachtas, it could be 2010 before consumers engaging in property transactions have the rights they badly need. The National Property Services Regulatory Authority which is based in Navan has appointed a CEO, and other staff, I assume, has a budget of almost €1m, but from a consumer prospective is a toothless watchdog.

Given the high home, land and property ownership levels in Ireland, large numbers of consumers are engaging in transactions each year. In particular the purchase of a home is a significant life event and with the large sums of money involved, it is vital that the profession meets the highest standards. While I have no doubt that the majority of estate agents and auctioneers do an excellent job, concerns and problems remain. The main issues for consumers include the misleading guide prices being advertised, inaccurate information about the property being provided, phantom bidders being used to artificially increase prices and blatant conflicts of interests. While the representative bodies such as the IPAV and IAVI can investigate complaints and take some disciplinary actions, they can only act on complaints made against their members. And while the majority are members of these associatons, you don't need to be. And even if they were to kick someone out of their association, they can still practice in the market. And as with all self regulatory bodies the public perception is that these bodies will side “with one of their own” and therefore consumers lack confidence in them and are less likely to complain.

I would also be concerned at the limited requirements for getting an auctioneers licence at present, made worse by the fact that once a licence is obtained there is a total lack of an ongoing supervisory and disciplinary system. It is positive that the NPSRA will have powers to set minimum levels of education and qualificiations for estate agents and auctioneers and will apply fitness and probity criteria.

Its funny that the Government can rush legislation through the Oireachtas when exchequer funding is at stake, but drags it heels on important pieces of legislation like this which are vital to protect consumers. CAI will continue to call on the Department of Justice, Equality and Law Reform to publish the legislation by the summer and to have it passed into law by the end of the year at the latest.

Sunday, February 3, 2008

Post Haste....Not!!!

The latest survey by Comreg of the opinions of business and residential postal users about postal services here published in recent days makes for depressing reading. When this information is put together with the repeated failure of An Post to meet the targets for next day delivery, surely its time for someone to take responsibility for a service that is not delivery for consumers, pardon the pun! It is ridiculous that a target of 94% for next day delivery of post set by Comreg for An Post a number of years ago continues to be missed by a mile. For the last 5 years, the rate has been in the 63%-79% bracket. I use the post a few times a week and it is really frustrating that sometimes it takes a few days for a letter to get from Dublin to Ashbourne.

I know Royal Mail have had their problems too, but I really like this ad!

I don't blame the postal workers, especially the postmen and women who go out in all weathers to deliver our letters, but the management at the top and in particular the regulator and the Government who have presided over this fiasco. Obviously An Post deliver most of the post in the country, even if on the business side new players have come into the market in recent years. But even with liberalisation, if we allow the current providers to get away with a poor service without any penalties or consequences, well then there is no incentive for improvement. In fact the opposite has happened, Comreg awarded a price increase, with the standard stamp going up from 48c to 55c last March without any commitments on improved service.

You have to plough through it, but on page 39 of the business report it records levels of satisfaction, there are some minor shifts up and down, but overall there are still high levels of dissatisfaction and on page 42 it shows 40% of business customers were unhappy with aspects of postal service. That's an amazing figure.

There were lower levels of dissatisfaction among residential customers, about 10%, but heavy users (those getting or sending more than 14 items a week) dissatisfaction was up to 20%. Of those who made a complaint 34%, only 20% were happy with how it was dealt with, which again is quite a shocking figure.

It's clear from this that with liberalisation approaching we either need incentives for all post providers to improve performance and perhaps price freezes or other sanctions where targets are not met, which result in consumers getting a bad deal.