Consumers need to be more assertive
Most of us want to ensure that the big-ticket items in our lives are properly covered for another 12 months. Everything from sailing boats to standard or miniature poodles, anything from fancy golf clubs to combine harvesters are routinely, almost automatically, insured for another year when the relevant renewal notice drops through the letterbox.
A little later in the year, many people, though not the 60,000-plus people who cancelled health insurance over the last year, will sign up to one or another health cover provider. This safety net has already become very expensive but it will be even more so in the not too distant future — some premiums are expected to rise by around 20%.
Despite some of the information services available, many consumers can find it difficult to compare packages. Rather than risk making a mistake, many people renew current arrangements even if there are, unknown to them, cheaper alternatives. This opacity around various options, and it may or may not be too sceptical to suggest that this is not accidental, leads to a kind of consumer stasis. Too many buyers think the devil they know is better than the one they might get to know, so they soldier on, often paying more than they might have to if they had the opportunity to make more informed, better-value decisions.
Earlier this month, Christmas ended with a bang for many families when they got the first electricity bill of the year. Many householders, though the increases had been flagged some time ago, were shocked to see that bills, in some cases at least, had more or less doubled. Increased seasonal usage was a factor but so too was the last in a long line of shuddering price hikes.
Research shows that six out of 10 households have never switched energy provider, which means many of us are paying over the odds for electricity or gas. Many consumers would be able to buy electricity more cheaply if they shopped around but our conservatism means we are not the most adventurous or assertive consumers; a trait that has been exploited for decades.
The same applies to landline phones, mobile phones, broadband, satellite or cable television and a myriad other services, even banking and mortgages. Too many consumers do not have the confidence, the time or the energy to filter through impenetrable descriptions to decide which option is best for them.
This is especially true for pensioners as Budget 2013 changes to phone rental supports means many may have to opt for one commercial package or another. It would be naïve to hope that firms operating in a fiercely competitive market might disadvantage themselves by giving consumers advice that would benefit the individual but reduce the service providers’ revenues.
It may ever have been thus but consumers, ironically enough, were never in a better position to compare products and prices. As everyone has to do more with less, it is time for a grand cultural shift away from consumer acceptance to consumer assertiveness. It may be time for concerted, coordinated efforts by consumers to make sure that he who pays the piper really does call the tune — and gets the best deal from all of the competing pipers trying to get our attention.
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