Dominic Hannigan (Labour)

I welcome the Minister of State to the House and second the motion pertaining to this Bill which is being presented by my colleague Senator Ryan. I compliment him on his legislation which could enhance the rights of consumers at the stroke of a pen.

It is disappointing that the Government has failed to act in this area. For the last 12 and a half years it has caved in to powerful vested interests such as bankers and builders while allowing ordinary consumers to be hung out to dry with inflated prices and poor service. We need a new and enlightened approach to consumer policy and rights. A coherent consumer rights policy ensures consumers get what they have paid for and can easily and quickly secure redress when things go wrong.

We also need to ensure consumer advocacy organisations have a greater role in the policy and decision-making process. In 1962, in a seminal speech on this issue, President John F. Kennedy described a situation that is unfortunately too often the case in Ireland. He said:

Consumers, by definition, include us all. They are the largest economic group, affecting and affected by almost every public and private economic decision. Yet they are the only important group ... whose views are often not heard.

It is true that consumers here enjoy greater rights than before, particularly as a result of the Consumer Protection Act 2007. However, we can thank the European Union for that development because much of the legislation consisted of the transposition of the unfair commercial practices directive into Irish law.

One of the issues we must consider is the enforcement of existing consumer rights because consumer legislation will only make a real difference when it is applied and enforced. Many wronged consumers, when they seek to obtain redress or make a claim, face barriers. This happens every day. Retailers try to absolve themselves of responsibility and put people off complaining by forcing consumers to go through complicated and lengthy processes to obtain redress. Some traders operate a "fob off and frustrate" policy which is predicated on the fact that people have busy lives and are likely to give up and forget about the complaint. A classic example is the practice of some airlines to demand an administration charge or insist on customers' putting their claims in writing within seven days of any problem they have. Some businesses appear to think they can cut corners and treat consumers with disdain. That is a short-sighted approach. Most consumers are reasonable people. If they have a problem that is dealt with quickly and fairly, they are likely to provide repeat business. If they are treated badly and feel their problems are ignored, however, they will bad-mouth the businesses involved, which is no good for anybody.

A study by the National Consumer Agency published in August found that even though four out of ten consumers had reason to make a complaint in the past year, almost one third of these did not bother. One out of every five said they did not want the hassle of complaining, 25% said they did not have the time, another 20% said there was no point in making a complaint, and one in seven said they worried that making a complaint might have an impact on them. Of those who did complain, two out of three felt frustrated by the whole process. These data raise real worries about how we deal with complaints in our society. It suggests that some businesses are not responding adequately to the complaints of consumers and are making the process time-consuming, frustrating and challenging for people who feel they have a complaint that needs to be addressed.

We need to consider ways of assisting consumers in obtaining redress. We have done it before. The introduction of the Small Claims Court allowed individual consumers to seek remedy in a fairly inexpensive and swift manner. However, I accept this does not suit every situation. There are other things we could do. The Consumers' Association of Ireland has proposed the introduction of a group action procedure. Group actions - legal procedures which allow people with similar claims to come together to take cases against the same defendant or defendants - are growing in popularity across Europe. Fourteen out of the 27 EU member states have this procedure. The CAI gives examples in which the group action procedure could be applied, suggesting that cases could be taken against a telecommunications company for overcharging, retailers that are colluding to keep prices high, or an airline for the imposition of unfair charges. It gives a good example from Portugal in which a group action was taken against a telephone company which was found to have been overcharging consumers over a number of years. The company in question was, in the end, forced to give refunds to all customers who could produce bills, which more than 70,000 did.

In this country, unfortunately, the Government has managed to undermine both the National Consumer Agency and the Competition Authority at a time when they should be out there fighting on behalf of consumers. In October of last year the Government announced the merger of the NCA with the Competition Authority, yet 14 months on nothing has happened. I call on the Minister to move forward with this reorganisation as soon as possible.

While the NCA and the Competition Authority have done good work, we must explore whether they are fit for purpose. The lack of legal action by these organisations in cases in which there has been a breach of law has been disappointing. In contrast, the Office of the Financial Services Ombudsman has not been afraid to take on the big guns on behalf of consumers. Last year alone, the ombudsman dealt with almost 6,000 cases, two thirds of which were resolved in favour of consumers, and it is estimated that €45 million has been refunded to consumers since 2005. Given the positive outcome of the establishment of the ombudsman, we should consider establishing a general consumer ombudsman, such as exists in Denmark, or a high-profile consumer advocate as proposed by the UK Government.

I make a plea to the Minister for the development of a new approach to consumer policy. For too long it has been underdeveloped, poorly understood and badly enforced. A clear consumer rights policy would be good not only for consumers but also for business and for society as a whole.