Consumers: Energy, banking, and urban transport "underperforming" for consumers
European Commission - IP/09/202 02/02/2009
Brussels, 2 February 2009
Three areas of services which really matter to people – energy, banking and transport (trains, buses and trams) – are causing the most problems for consumers, according to a new EU Report published today by the European Commission. The 2nd EU Annual Consumer Markets Scoreboard Report screens more than 20 goods and services sectors (including food, clothing, footwear, financial services, energy and telecoms) against 5 key consumer indicators – prices, switching, satisfaction, complaints and safety. The aim is to identify where markets have a high risk of malfunctioning for consumers. Consumer conditions in the retail electricity market will be the target of an in-depth market analysis by the Commission in 2009.
EU Consumer Commissioner Meglena Kuneva said: "I am very concerned that three services that play such a central part in people's lives are scoring badly against a range of key EU wide consumer indicators. Because of its importance in the basic household budget, I have decided to make the electricity retail market the target sector for investigation in 2009. Europe's consumers deserve better.
The main results
The two main EU wide trends emerging from the 2009 Scoreboard Report: are:
1. That basic services are underperforming for consumers.
Services are consistently causing consumers more problems than traditional goods markets. The satisfaction data for 19 markets data again shows a clear division between services and goods markets. Satisfaction is particularly low for urban and extra -urban transport (trains, buses and trams), energy, fixed telephony and postal services. In all these sectors less than 60% of consumers are satisfied with the services. There is also a pattern showing that consumers clearly report more complaints with services than goods markets (See MEMO/09/44).
2. The 3 most problematic sectors for consumers (measured against 5 indicators) are energy, transport, and bank services
Switching rates are particularly important as one of the key findings of the Scoreboard Report is that in markets with higher switching rates consumers are less likely to report price increases – such markets are car insurance (where 25% of consumers in the preceding two years), followed by internet (22%) and mobile phone (19%). The evidence is that consumers empowered by switching help to improve the outcomes for all consumers. Facilitating switching in key retail sectors should be a policy priority.
The next steps
Of the three sectors identified as causing most problems for consumers, energy is the one which consumers spend most (5.7% of their household budget) and within energy, electricity takes up the highest part of consumer spending (2.1%). The retail electricity market will be the target for the follow up market study for 2009 to further investigate consumer conditions on specific household conditions, for example comparability of offers, unfair commercial practices and billing.
Other key conclusions
The full Scoreboard results are set out in more detail in the attached Memo. In particular, the Report indicates that the relative importance of cross-border retail trade is stalling. The proportion of cross border trade has not increased since 2006. The national benchmarking, indicates major difference between Member States in terms of national consumer environments – with particular room for improvement of enforcement and redress mechanism.
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