If I asked you to describe a vulnerable person, I am sure that there would be very little variation in the picture we would each describe. Think about the definition within the CPRS. “where a clearly identifiable group of consumers is particularly vulnerable to the practice or the underlying product because of their mental or physical infirmity, age or credulity in a way which the trader could reasonably be expected to foresee”
There’s such a focus upon an individual’s physical or mental attributes as we consider vulnerability. This leads to a binary view that a person is either vulnerable or they’re not. This narrow view constricts the way we deal with systemic or situational vulnerability. I want to illustrate from an example from my time in Local Government.
I led on a review of individuals and families who were deemed to be, “high demand". We studied those who were already being provided with high levels of support from multiple agencies and particularly, the life changing events that may have triggered their journey there, such as the loss of a job. We used case studies provided to us by independent social researchers. I’m not too proud to say that I was in floods of tears as I read them and felt a real sense of disappointment/injustice as the system had clearly failed them. A number of things have stayed with me.
Firstly, how fragile our journeys in life can be and how on occasions we have a greater need for support than at other times – situational vulnerability. If we’re fortunate we get that support and direction but remember, we are all just one decision away from a different path at various points in our life.
Secondly, how risk adverse the public sector is. There are some amazing and wonderful people working within the public sector but politics, bureaucracy and trial by media has created an environment where failure and mistakes are feared not embraced. We grow as organisations and individuals when we operate at the very edges of our competence, which means making good mistakes, learning from them and implementing that learning. This doing what we’ve always done but trying to do it incrementally better stifles innovation. This fear of getting something wrong and its consequences has created fixed points within the public sector. Where people are assessed, if they meet the criteria, they get support if they don’t, they are told to bugger off and comeback when they’re more needy. A comfort blanket of process that invariably creates a higher level of vulnerability in the future. Think of it as a tap of support that can only be turned on if you hit the right score and is controlled by the state’s assessment of your vulnerability, rather than the individual’s need for support in that moment. But I’m not writing this piece to criticise the public sector – the past year has shown what it can do in times of crisis – but to understand how this fixed notion of vulnerability plays out in consumer contracts. As it’s public policy that leads the debate on what is vulnerability.
So we have the definition within the CPRS. Is it any good? Well it’s a starting point. But I would contend that we need to step away from the idea that vulnerability is binary in nature and think of it rather as a spectrum. Yes, there will be those who are always vulnerable because of their personal circumstances and some businesses will seek to exploit that, (after all according to Friedman the social purpose of a business is to maximise profits), but to do so is reprehensible. Full stop. No debate or question. But most business, whilst wishing to make as much money as possible, would not countenance ripping off this cohort of consumers.
The vast majority of us are able to undertake everyday purchases safely and confidently but do we always meet the definition of the average consumer in being reasonably well informed, reasonably observant and circumspect? There will be times when even the savviest consumer will be prone to making bad or ill-informed decisions.
So then how do we consider a wider definition of vulnerability? A better starting point is the 2017 study on ‘Consumer Vulnerability across key markets in the European Union’ that offers a definition built around facets of a consumer rather than pigeon holing consumers, namely: “A consumer, who, as a result of socio-demographic characteristics, behavioural characteristics, personal situation, or market environment:
1) Is at higher risk of experiencing negative outcomes in the market;
2) Has limited ability to maximise their well-being;
3) Has difficulty in obtaining or assimilating information;
4) Is less able to buy, choose or access suitable products; or
5) Is more susceptible to certain marketing practices”
I want to quickly consider some circumstances where we may all be more susceptible to poor decision making.
Complexity. One of the perks of being a CEO is I used to get invited to loads of events, often the launching of a product or service. On a number of occasions this would be to promote a protocol designed to protect vulnerable members of society. It reminded me of old style inclusion strategies where you thought translating leaflets was enough to address issues and we all gave ourselves hearty pats on the back rather than addressing the root causes of exclusion…. no one asked the questions why do we need the protocol in the first place. Is it because there is a genuine need or have we simply designed a system that’s too complex for most consumers to understand that we apply the sticking plaster of a “vulnerable” protocol over it? If it’s the former, then it’s to be welcomed. If the later then a more fundamental and systemic solution is required. Too complex a system has ingrained vulnerability which businesses exploit, often without the consumer being aware. The old saying, “knowledge is power” rings true in consumer contracts. I am a brilliant consumer, (sorry that sounded really big headed!), when it comes to everyday shopping but ask me to buy a car and I am completely in the hands of others. The purchasing of a car is the second biggest purchase we make according to the powers that be, but its more than that. It’s an emotional purchase. As a consumer you are in the hands of the seller unless you have expert knowledge. When I chaired the Used Car Commission, I came to the conclusion that most businesses wanted to do the right thing but a lack of mutual understanding and shared perceptions/expectations were at the heart of many of the complaints. Given the imbalance in knowledge and power there’s a real onus on the business to manage that journey.
Sitting alongside power is authority. Given that our brains developed when there were just a few hundred goods and services it’s no wonder that we look for guidance when faced with the billions of unique combinations a modern economy presents us. So we look to figures of authority to guide us. This gives great power to those trusted advocates. Now this can be an amazing power for good and transformation - just look at the work of someone like Martin Lewis at MSE and all he has done for consumers. But should those charged with protecting consumers leave it to the private and not-for-profit sectors to wield this power. You only need to consider the rise of the “influencers” and their sometimes subversive influence to see how this could potentially create vulnerability to suggestion. How do we continue to keep pace with an increasingly complex world? How do we prevent even greater inequalities?
Is it only going to get worse as we offer consumers the perceived benefits of more choice – think pensions! As an example, I was recently talking to an American company who were looking to bring a healthcare solution to the high street. On one hand fantastic for consumer choice in the increasingly competitive market place of health. On the other just another layer of confusion and complexity and where does the consumer go for advice? So, we look to the person in authority and in this case that may well be the person selling the service. Whilst those in genuine positions of authority can stagnate because of the slow moving pace of the public sector, their risk aversion, legal restrictions or their desire to protect/promote their own approval scheme a space is created for someone else to set the agenda and cut through the bulls**t. Let’s hope its people like Martin Lewis that do that not the rogues, the paid-for influencers or the lead generators that don’t care about consumers.
How do businesses use undue pressure to influence consumer decisions. We might all be a bit more attuned to the salesman sitting in our house until we sign on the dotted line. But what about the competitive pressure that you now see on websites (6 left and 8 people have this in their baskets) or the pressure of pricing practices. These are practices driven by the business but there will be situations where its our own personal circumstances that bring pressure.
Now I have a background in consumer protection and can be classed as an expert I suppose. Does that mean I am not a vulnerable consumer? I’ll answer that with a recent example. I took the decision to branch out and look for a portfolio career. One of the jigsaw pieces is interim/NED work. Looking through Linkedin I saw a role that seemed a good fit. I clicked on it and liked the details so hit the apply button. This took me to another job listing website. Skipping a few steps, I ended up at a pay wall. Now I am new to this world. No idea if this is standard practice. No idea if the land of plentiful opportunities lies behind this pay wall or not. Would I have felt differently had I been in a more desperate situation? Would I have felt the pressure to give into the hope offered by these sites? What I do know is that, having visited the site (and no I didn’t pay) my in-box, adverts etc are full of CV writing, headhunting paid services. So, I am definitely a vulnerable consumer and with my understanding of the value of my data and its uses, likely to become more vulnerable in some circumstances. But I am an expert as well!
So, what’s the solution for businesses? I am definitely no academic. I think that massive strategies are overrated – who reads anything more than a side or two of A4!! For me it’s about values. I am a believer in simple tests and maxims – they work and they stick. The one I use is the mum test. What would I advise my mum to do? It’s why, when I was at the Institute, we were the first to call for a full recall of whirlpool tumble dryers. Not that we necessarily felt colleagues had given the company the wrong advice simply because we would have advised out mums to stop using them and look for refund. That’s why when I see a CEO like Greg Jackson at Octopus Energy positively engaging on social media with complainants, I know there’s a company with the right ethos at its heart and the one I recommended to my mum.
So as a business ask yourself if your mum were a customer what would her experience be like (without pulling the old do you know who I am card!). If she had an issue would you be confident that she would be treated correctly? Would you be happy that your staff would understand her needs? Well, your customers are not only someone else’s loved ones but your greatest marketing tool. Are you happy that your staff avoid labels and understand the needs of your customers? Do you set the right culture? Does the way your present and market add to your customers vulnerability?
Relationships between regulators and businesses have improved greatly over a number of years. But it still has a very narrow focus upon compliance within legislative/policy silos. Isn’t it time we rethought this relationship and looked at business practices in its broadest sense? Really help those that want to do the right thing to understand how their behaviour impacts on the consumer and genuinely reduce the risk to that business of poor customer experience and consequential reputational damage.
If as a business you want help and support with understanding your customers, vulnerability, improving your relationship with regulators or the patent pending (sorry couldn’t resist!) mum test please do reach out to us. If we can’t help you, I am sure that I know someone who can.