Stronger collective action could help millions of consumers, hears Labour’s Consumer Investigation

The first of evidence hearing of Labour’s Consumer Investigation has examined evidence that better empowering consumers through collective action could help million s who suffer financial loss each year. 
  
Labour’s Consumers Investigation, part of the party’s Policy Review, is looking at ways of putting consumers in the driving seat and ensuring that markets work fairly for businesses and consumers alike. As part of the Investigation, Labour is looking at proposals for a stronger collective action regime – like those that exist in the United States, Australia and Portugal. 
  
This would mean that consumers could more easily seek redress collectively and launch a claim together. Currently in the UK consumer group Which? is the only body which can bring forward class actions but recent cases such as the PIP breast implants and payment protection insurance scandals highlight the type of case where a stronger class action framework could provide greater redress. 
  
The evidence session was chaired by Shadow Consumer Minister Ian Murray MP and consumer champion Ed Mayo, formerly Chief Executive of the National Consumer Council who has been described as “the most authoritative voice in the country speaking up for consumers”. It heard from Prashant Vaze, Chief Economist at Consumer Focus and Ron Gainsford, Chief Executive at the Trading Standards Institute as well as contributions from the FSB and Ombudsman Services. 
  
It examined evidence that there have been more than 50 million consumer complaints in the past year and that financial loss is disproportionally borne to consumers who suffer a loss of £1,000 or less, totalling as much as £800m a year, who would be assisted by stronger collective action procedures. 
  
Commenting on the evidence at the hearings, Shadow Consumer Minister Ian Murray MP said:   
  
“What the hearing has shown is the as well as problems for individuals, we must remember that small and micros businesses are also consumers.  In total there were more than 50 million complaints this year so it is timely that we look at what remedies are available and if the current tools for enforcement are working. 
  
“Questions were raised  around the detriment suffered by consumers suffering financial losses of less than £1000.  This is an area ripe for groups of people to come together to get restorative justice when they have been ripped-off, and that is why Labour is examining proposals to better empower consumers by introducing a class action framework in the UK, allowing consumers to seek redress collectively. Concerns were raised that varied cuts to local authorities were having a significant impact on trading standards and that problems arise where issues cross council boundaries.   
  
“This evidence gathered will be vital for Labour’s Consumer Investigation, led by consumer champion Ed Mayo, in looking at ways that we can empower consumers, back responsible business, underpin fair markets and end the rip off culture which too often has faced consumers. 
  
“As Ed Miliband has championed, consumers deserve a fair deal.  That is why Labour have proposed a Consumer Bill that would give new powers to the Financial Conduct Authority and Competition and Markets Authority to stop rip-off surcharges by banks, low-cost airlines and pension firms.  Labour are willing to take on vested interests and get a better deal or ordinary people and businesses up and down the UK.” 
 

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