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Commission publishes study aimed at combatting consumer vulnerability

23-02-2016

Today, the Commission has published a study which looks into the difficulties consumers face in getting the best or fairest deals. Consumers facing these difficulties may be more likely to have negative experiences when attempting to make purchases, choosing, or switching providers. The study identifies the main reasons behind this vulnerability and what can be done to enable consumers to make better use of their rights and the alternatives the marketplace offers. A special focus is directed at the challenges consumers face in the online environment, as well as in the finance and energy sectors.

Speaking at the London Energy Forum, Commissioner for Justice, Consumers and Gender Equality VÄ›ra Jourová said " Today we still don't have a lot of reliable information on consumer vulnerability. It is this knowledge gap that separates us from an effective policy response. We need a single, EU-wide definition of consumer vulnerability. We need comparable indicators to quantify how many people actually face energy poverty. We can then target the right people. No more excuses."

The study represents an important step forward in establishing an evidence-based definition of consumer vulnerability and in exploring possible remedies to it.

A vulnerable consumer is someone who

  • Is at higher risk of suffering negative outcomes in the market;

  • Has limited ability to maximise his or her well-being;

  • Has difficulty in obtaining or assimilating information;

  • Is less able to buy, choose or access suitable products; or

  • Is more susceptible to certain marketing practices.

Many consumers show some signs of vulnerability - for example, more than half of consumers don't compare deals in the energy and financial markets, whilst 37% are not able to choose the best deal when presented with different options in behavioural experiments.

Whether consumers are vulnerable or not depends on their environment, circumstances and situation. For example, the study finds that consumers are particularly vulnerable when they experience difficulties getting informed, comparing, accessing and choosing between offers on the market. Consumers who are in a difficult financial situation or who are not native speakers are also generally more likely to be vulnerable than others. However, the study also found that consumers with certain characteristics can be vulnerable in some situations but not in others: for example, older consumers (aged 55+) are generally more likely to experience problems comparing deals and switching providers compared to middle aged consumers (aged 35-44), but are less likely to experience being excluded from markets.

The study finds that presenting offers in a simpler and clearer way significantly improves consumers' ability to select the best deals in behavioural experiments. In order to reduce consumer vulnerability, the Commission is therefore urging for clearer information from providers, so consumers are better able to engage in markets and to better judge and compare deals. This will enable consumers to exercise their right to choose other alternatives.

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