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2 RECOMMENDED OPTION - CONSUMER INFORMATION SERVICE2.1 Overview2.1.1 Operations will continue to work with the following groups:
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2.1.2 This diagram (amended following the interim report) reflects feedback from the Wellington focus group and the Consumers’ Institute that we should build and maintain effective relationships with key Government and other consumer agencies.
Consumer Information Service 2.1.3 The recommended option proposes increased information and education work with target consumers, employing regionally-based liaison workers to work directly with groups and traders involved with target consumers, extra support and training for agencies that currently provide free consumer advice and information such as CABx, NZFFBS members and CLCs and more advocacy work which will help target consumers with problems where they face a high level of detriment. 2.1.4 The following outline summarises the key features of the new service: |
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Consumer Disputes Service 2.1.5 The interim report identified the Consumer Disputes Service as an integral feature of the Consumer Information Service option. It will be available to target consumers identified through criteria and promoted through community agencies, beneficiary agencies, Maori and Pacific Island organisations, BAS, CABx, CLC and Government agencies such as NZISS, TPK and the Ministry of Pacific Island Affairs. 2.1.6 The work will involve providing advice and advocacy for specific consumers (and specific issues), assessment of disputes resolution options, negotiation with traders, preparation of cases for Disputes Tribunals/Motor Vehicle Disputes Tribunals, legal research, monitoring key legal developments in consumer/credit legislation and identifying trends for trader compliance and policy development work. 2.1.7 Considerable support was given to the introduction of this enhanced service at focus groups and in written submissions. However, comment was made that the service should be available to other consumers than just those targeted by the Ministry and that the title of the service may confuse:
"[W]e endorse the establishment of a targeted Consumer Disputes Service, although the title could lead to confusion with the Disputes Tribunal. It will provide much needed advocacy and as the report notes, much better record keeping ... However, our support is tempered by a fear that a large group of consumers will be without assistance ... For example, who will provide assistance to an older consumer who is bewildered and confused and open to exploitation" - Submission from the Consumers’ Institute.2.1.8 All the operational issues in relation to this service have not yet been finalised. Feedback received from the focus groups and written submissions about who will be able to access the service, whether the service will be renamed and how it will be marketed will be considered further by the Ministry team established to implement the recommended option. 2.1.9 The availability of this service is constrained by resources. 2.2 Low Income ConsumersObjective 2.2.1 Our objective is to inform low income consumers, using the most appropriate means possible, so they can exercise choice and be effective in asserting their rights and responsibilities in the marketplace. Findings from our Research and Consultation 2.2.2 The Ministry recognises that a strong oral tradition exists amongst low income consumers who prefer to receive information from someone they know and trust in a familiar community setting. Offering pamphlets to many low income consumers to address their information needs is unhelpful as pamphlets are perceived as not for them, difficult or overwhelming unless the written information is ‘explained’ by someone suitable. 2.2.3 The word ‘consumer’ has little meaning to some low income consumers and needs to be explained in terms of consumer issues affecting peoples’ daily lives so that the information then becomes important. 2.2.4 In the interim report we identified that the Ministry did not have an established definition of what level of income constitutes being ‘low income’. Therefore, based on the available research and census information we defined a low income consumer as an individual whose total source of income is less than $25,000 per annum. 2.2.5 This definition was a concern at the Wellington and Christchurch focus groups and in a number of submissions:
"Based on the 1996 census figures for residents 15 years and over this definition would include 67.4% of the population [...there is a] real question as to whether there is a sound basis for defining low income in the terms that the Ministry proposes." -Submission from the Financial Services Federation. "The assumption ... that because 50% of the population is eligible for the Community Services Card the measure is a reflection of a low to moderate income is flawed. It is not appropriate to judge the level of someone’s income through comparing that income to one received by others ... any percentage of a population, including a high percentage, could be low income earners." - Submission from Te Puni Kokiri. 2.2.6 The Ministry recognises that Government and the wider community has struggled with defining ‘low income’ (some discussion is contained in Appendix eight of the interim report). We will continue to consider a range of factors to assist us to target low income consumers without establishing an arbitrary income limit to define ‘low income.’ 2.2.7 These factors will include strong networks with a variety of agencies that regularly work with low income people (for example BAS and NZISS), considering the types of issues that consumers want advice/assistance with, considering the geographical location when deciding where to pitch information and education programmes and further indicators of social disadvantage such as language or education barriers. A significant issue to put the definition in context is that it is a mechanism for assisting in directing resources not a prescriptive label with any other meaning or value attached to it. Strategy for Working with Low Income Consumers 2.2.8 We will enhance our networking and overall relationship management with key external agencies such as:
2.2.9 We recognise that these relationships are essential for the success of the strategy of utilising a range of key people and agencies to explain and pass on information to consumers and make referrals to the Ministry as appropriate. Where the CABx or BAS is unable to assist a low income consumer with a complex consumer matter, we will advocate on the consumer’s behalf. 2.2.10 We will initiate ongoing projects rather than one-off activities, for example regular columns and sessions on community radio and in community newspapers and the development of more appropriate written and visual resources. 2.2.11 As part of the multi-pronged approach, we will work strategically with business to assist low income consumers. We will target traders who deal with low income consumers to ensure they comply with consumer law and have appropriate complaints handling procedures. This will also benefit all consumers. (An example of a compliance project the Ministry was recently involved in with the CC is the Dominion Television Rental (DTR) project which involved a systemic problem of non-disclosure by DTR with their rent-to-buy agreements. The Ministry worked with DTR over many months to come up with a settlement that would give affected consumers some compensation and ensure that in future consumers would be given the financial information they are legally entitled to). 2.3 Maori ConsumersObjective 2.3.1 Our objective is to maximise Maori control of information development and dissemination processes through the recognition of the Treaty of Waitangi and the practices of partnership to enable Maori to exercise choice and be effective in asserting their rights and responsibilities in the marketplace. Findings from our Research and Consultation 2.3.2 The most common and preferable way of obtaining information for Maori is word of mouth. Maori are more likely to ask those people they trust for information such as parents, whanau, friends, children, partners, and people working in the community who are known and trusted, particularly in a problem situation. Feedback from Maori in the Wellington focus group supported our research in this respect and added that ‘grass roots’ organisations such as Kohanga are an important avenue for disseminating information rather than more ‘high powered’ organisations such as Maori Women’s Welfare League that may be intimidating for some Maori. 2.3.3 Maori radio, newspapers and magazines are popular mediums for disseminating information to Maori. This is due to the way the information is presented - reports are written for Maori by Maori. 2.3.4 Research and consultation have highlighted that the experiences of many Maori with Government agencies have been largely negative. The way Government agencies and other non-Maori organisations deliver services has traditionally not been user friendly for Maori and so information delivered, particularly by non-Maori people, is likely to be viewed with suspicion and mistrust, or ignored. The best vehicle for delivering information is one that uses whanau, hapu, and Iwi networks. 2.3.5 We were reminded at the Gisborne focus group that all of our information and education work will have an impact on Maori community agencies who are under-resourced and reliant on volunteers. 2.3.6 Comment has been made supporting the continuing provision of a toll-free telephone advice service to reach targeted consumers, including Maori:
"We would expect that target group consumers would use the Ministry’s phone advice service much more once they knew more about its existence and they had some basic knowledge of consumer rights [...and] without an accessible phone advice service the basic and particular needs of even target groups of consumers will not be met." - Submission from NZ Assn. of CABx Inc. Head Office.2.3.7 There will not be access to a Ministry-based public phone advice service, because, among other reasons outlined elsewhere in this paper, we stand by our research that shows that a telephone advice service is not the most effective way to provide information to target consumers, including Maori. Also, to operate any sort of phone service other than the hotlines to community agencies is resource intensive and may not be manageable. Strategy for Working with Maori 2.3.8 The Ministry, as with all Government agencies, is obliged to acknowledge the Treaty of Waitangi and in particular it’s significance in the relationship between Maori and the Crown. The Ministry targets its information, education and advice to those most disadvantaged in the marketplace, Maori being one of these groups targeted. This strategy is premised on that obligation and our objective stated at 2.3.1. 2.3.9 We will foster Maori control of the information development and dissemination processes which will ensure that information and education services are accessible, appropriate and acceptable to Maori. We will build on our work with Te Runanga O Toa Rangatira (specifically te Iwi o Ngati Toa ki Porirua [the Ngati Toa project]) by developing and supporting consumer education packages in a range of learning environments for Iwi. The Ngati Toa project involved contracting and working with Ngati Toa to design a package which ensures that Iwi have ownership of the information dissemination process and responsibility for educating their own about consumer rights and responsibilities. 2.3.10 We will enhance our networking and overall relationship management with key external agencies such as:
2.3.11 We will provide training and support to Maori community agencies that are disseminating information and advice about consumer matters. This will involve their having access to the community advisory agencies ‘hotline,’ providing regular consumer updates and written training and resource material. 2.3.12 Where external organisations such as Maori community agencies, CABx and BAS are unable to assist a Maori consumer with a complex consumer matter, we will advocate on the consumer’s behalf. 2.3.14 We will develop an overall communication strategy to ensure effective use of Maori media, for example Iwi radio stations, television and the print media. 2.3.15 The Ministry will work strategically with business to assist Maori consumers. We will target traders with a large Maori customer base to ensure they comply with consumer law and have appropriate complaints handling procedures. This will also benefit all consumers. 2.4 Pacific Island ConsumersObjective 2.4.1 Our objective is to inform Pacific Island consumers, using the most culturally appropriate means possible and while recognising that each Pacific Island nation is a unique community in its own right, each with its own language, culture, processes and networks, so they can exercise choice and be effective in asserting their rights and responsibilities in the marketplace. Findings from our Research and Consultation 2.4.2 Networking is seen by Pacific Island consumers as the most effective way of distributing consumer information, whether through family, church, social, or community networks. Within this networking process, face to face dialogue is seen as the most appropriate way to get information to and from Pacific Island communities. This stems from Pacific Island histories and traditions where information is normally passed on orally. Where agencies can, they need to use the expertise of Pacific Island staff/contacts to ensure processes are followed. 2.4.3 We were reminded at all the focus groups that all of our information and education work will have an impact on Pacific Island community agencies who are under-resourced and reliant on volunteers. 2.4.4 Our evaluation of previous projects with Pacific Island radio stations demonstrates that this medium is effective for disseminating consumer information to Pacific Island people. This has been identified by Pacific Island staff in the Ministry involved in these projects and feedback from Pacific Island staff in the radio stations and Pacific Island community groups at the Wellington, Christchurch and Auckland focus groups. 2.4.5 In the Wellington and Christchurch focus groups we were reminded that for many Pacific Island consumers the issue of disadvantage in the market stems from ethnicity more than income and support was received for the preferred option in relation to the proposed work with Pacific Island consumers:
"The Ministry [of Pacific Island Affairs] supports the preferred option identified by the review and the proposed establishment of a Coordinator (Pacific Island) position [...and w]e would like to suggest that knowledge of a Pacific Island language be a requirement in the appointment of regional liaison workers, to enhance access and dialogue with Pacific communities" - Submission from the Ministry of Pacific Island Affairs.Strategy for Working with Pacific Island Consumers 2.4.6 The Ministry recognises that Pacific Island consumers prefer to receive information visually and face to face by utilising Pacific Island staff resources within the Ministry and key Pacific Island community agencies to disseminate information. 2.4.7 We acknowledge that Pacific Island women are the key buyers of consumer items. Therefore, strong networks with Pacific Island women’s agencies are essential to the success of the strategy. 2.4.8 There is an emphasis on enhanced relationship management with key Pacific Island agencies such as:
2.4.10 We will provide training and support to Pacific Island community agencies that are disseminating information and advice about consumer matters. This will involve their having access to the community advisory agencies ‘hotline,’ providing regular consumer updates and written training and resource material. 2.4.11 Where external organisations such as Pacific Island community agencies, CABx and BAS are unable to assist a Pacific Island consumer with a complex consumer matter, we will advocate on the consumer’s behalf. 2.4.12 We will have ongoing contact with Pacific Island consumers through long term projects such as Pacific Island Radio and regular columns in Pacific Island newspapers and strong networks with key Pacific Island agencies. 2.4.13 The Ministry will work strategically with business to assist Pacific Island consumers. We will target traders with a high Pacific Island customer base to ensure they comply with consumer law and have appropriate complaints handling procedures. This will also benefit all consumers. 2.5 BusinessObjective 2.5.1 Our objective is to work strategically with business, particularly businesses that have a significant customer base of target consumers, to increase business compliance with consumer law. Findings from our Research and Consultation 2.5.2 Business’ feedback about Ministry services highlighted the importance of the Ministry’s written information, particularly about the Consumer Guarantees Act. Businesses look to the Ministry for guidance on interpretation of new law and one suggestion was that the Ministry hold informal discussions with businesses about developments in interpretation of relevant legislation. 2.5.3 Businesses support the Ministry’s work in the trader compliance area, particularly work that is more proactive. A written submission went further than this:
"Your targeted groups may be those you perceive as least capable of achieving ... a position [in which they can deal equitably] within the market place but it should be questioned whether the best way of assisting them is providing advice to them or by studying very closely the traders that predominantly deal in that marketplace" - Submission from L.V. Martin & Son Ltd. 2.5.4 Ninety-four percent of CABx and NZFFBS respondents supported a greater focus on working with business. Pamphlets and information about rights and responsibilities were identified by the respondents as the biggest priority. 2.5.5 All CLC respondents said that the Ministry should deal with businesses who repeatedly break the law, to change bad trader behaviour. Methods included education, prosecution, suspension from trading and publicity of a register of ‘bad’ businesses. CLCs encouraged the Ministry to provide information to law centres about businesses with bad records. 2.5.6 The point was made in the Auckland focus group that the Ministry should have enforcement power to deal with ‘rogue traders’ and that we need to have a system in place for community agencies to report these traders. 2.5.7 Consultation (through a questionnaire - details available in the interim report) with community organisations, low income, Maori and Pacific Island consumers showed that a significant proportion of consumers value good in-store procedures for getting disputes sorted out. Strategy for Working with Business 2.5.8 The Ministry believes that significant benefits for all consumers can be made through working with business or the business sector. We acknowledge that credibility with business is crucial and we will endeavour to ensure that the Ministry retains/improves credibility with business. 2.5.9 We will work in a cooperative way and capitalise on opportunities to involve business in information programmes aimed at them. We will seek to take an active part in an integrated Ministry-wide approach towards business, including trade measurement, consumer safety and consumer policy. Where possible, the Ministry will seek a contribution from businesses targeted by an information programme. 2.5.10 We will work in the following ways:
2.5.12 We expect that information/trends relating to ‘rogue traders’ and ‘bad business behaviour’ will be identified through our advocacy casework, information via the community advisory agencies ‘hotline’ and as a result of our improved networking and information sharing with key community advisory agencies. 2.6 Non-targeted ConsumersObjective 2.6.1 Our objective is to inform all consumers, through all available avenues, so they can exercise choice and be effective in asserting their rights and responsibilities in the marketplace. Findings from our Research and Consultation 2.6.2 This group consists of those consumers who are outside the Ministry’s targeting criteria. Members of this group are more generally aware of their rights than target consumers and have the ability and resources to obtain information regarding their rights from a number of sources in addition to the Ministry, for example Trader/Industry Organisations (such as Master Builders and Motor Vehicle Dealers’ Institute) CABx, CLCs, Consumers’ Institute and solicitors. 2.6.3 Feedback from community advisory agencies (particularly CABx) at the focus groups reminded us that all consumers needed access to a free consumer advice service. This sentiment was echoed in some written submissions: "While the Federation [New Zealand Federation of Family Budgeting Services - NZFFBS] certainly agrees that low income, Maori and Pacific Island consumers do need access to good consumer information and advice, as target groups, we also support the provision of specialist advice and information for all consumers. This is particularly important in the deregulated market within which credit and purchase decisions are now made." - Submission from NZFFBS Head Office. Strategy for Working with Non-targeted Consumers 2.6.4 This strategy is framed given our current resourcing. Also relevant, is the point raised at 1.1.6 in relation to the work of the wider Ministry. 2.6.5 Non-targeted consumers will be able to obtain information on their consumer rights through community organisations, for example CABx and CLCs, libraries, Internet, industry dispute resolution schemes and the Consumers’ Institute, not directly by telephone from the Ministry. 2.6.6 A ‘hotline’ for CABx, BAS, CLCs and other community advisory agencies will ensure Ministry support for these organisations who are often the first port of call for many consumers. 2.6.7 The Ministry will enhance the training and provision of written resources and training material for key community advisory agencies that deal with non-targeted and targeted consumers alike. 2.6.8 We will continue to produce regular articles for community newspapers and general media releases (as appropriate) which all consumers have access to. 2.6.9 A specific ‘issues hotline’ will be provided as required which all consumers will have access to. This will be set up in response to a particular issue ( for example the recent death of a baby in a pram). 2.6.10 ‘Project hotlines’ will also be accessible by all consumers. These will be set up as part of specific projects to collect information for the researching of policy or compliance projects. 2.6.11 The Ministry’s compliance work with traders and the support and training provided to community advisory agencies targeted at low income, Maori and Pacific Island consumers will also benefit this group.
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