Description
The impact of the internet on our everyday lives has led to a breadth of opportunity and convenience for many people. Big business’ readiness to adopt this technology is to a certain extent admirable; it shows a willingness to embrace new and interesting ideas.
KEEP ME
POSTED
Paper and Digital Communications:
the case for consumer choice
KEEP ME POSTED
A word from our Chair…
The impact of the internet on our everyday lives has led to
a breadth of opportunity and convenience for many people.
Big business’ readiness to adopt this technology is to a certain
extent admirable; it shows a willingness to embrace new
and interesting ideas. However, research indicates that many
consumers want choice. Not all consumers are currently
ready, willing, or even able to communicate with companies
solely through digital means.
It appears to me that in their drive for greater efciency and cost
savings, many businesses have forgotten to consult customers
about their ability and willingness to switch to online, and the
implications of taking away choice.
It is this belief that has led me to commit myself to the Keep
Me Posted campaign. We have a difcult job ahead of us but
our demands are simple and to my mind, perfectly reasonable.
All we are asking for is that major companies give consumers
back the choice which, as customers, is rightfully theirs anyway.
Judith Donovan CBE, Chair,
Keep Me Posted campaign
3
INTRODUCTION
The rise of digital services has led to greater access, control
and freedom for consumers. Service providers have rushed to
embrace digital communication, citing customer convenience
and ease. However, concern is growing that many companies
are encouraging or incentivising their customers to receive their
information in an online-only format, rather than ofer the choice
of method. This development restricts customer choice and risks
causing consumer harm.
The Keep Me Posted campaign (KMP) is a partnership
representing charities, consumers and businesses who believe
in the right of consumers to choose the way that companies
communicate with them. We believe every consumer should
be able to choose, without being penalised, a paper copy of
communications from banks, utility companies and other
service providers.
In the interest of ascertaining an accurate depiction of consumer
needs, the KMP campaign commissioned Opinium Research
to produce a defnitive independent research report which
marries long-term insight with up-to-date consumer polling and
qualitative analysis of terms and conditions. The full methodology
is in the appendix of this document.
This report looks at:
Consumer attitudes towards communications choice
How lack of choice afects all consumers
The consequences of lack of choice
Consumer vulnerability and the digital divide
The current choices available for consumers
How existing regulation does not protect consumer choice
What steps must be taken to protect consumer choice
4
CONSUMER ATTITUDES
The research found that, as we suspected, there is one voice
largely missing in the drive to digital communication: that of
the consumer.
The majority of businesses are now making decisions about
customer communications, with limited consideration of their
customers’ needs or preferences.
By limiting consumer choice over how they are contacted,
businesses could detrimentally impact on the social and fnancial
health of their customers, in addition to risking their own
reputations and commercial interests.
So what do consumers actually want?
Overall, an overwhelming majority (81%) of consumers
think it is important to have the choice in how they
access fnancial information and statements from all
service providers
1
84% agree they do not like it when companies take
away the choice regarding the way they receive their bills
and statements
2
15% said they would take their business elsewhere and
50% would consider doing so if companies take away
the choice
3
Most consumers like a combination of both paper and
online: 76% agreed that their preference is to have
statements online so they can quickly check, but to also
have them sent in the post to read thoroughly when they
have more time
4
1
Source: Opinium, 2013
2
Source: Quadrangle, 2010
3
Source: Quadrangle, 2010
4
Source: Quadrangle, 2010
“
(81%) of
consumers think it
is important to have
the choice in how
they access fnancial
information and
statements from all
service providers
”
5
HOW THIS AFFECTS
ALL CONSUMERS
Opinium’s research makes clear that the benefts of
communications choice when it comes to transactional mail –
such as important bills and statements – are not limited to the
more vulnerable.
The research indicates that, without access to paper statements,
customers are more likely to miss payments and less likely to
have a handle on their fnances. Four out of fve people admit that
they are more likely to read statements that are available both
online and by post.
When Britons were asked about the impact of losing paper
statements, the research found that removing the option of
physical mail takes control away from customers:
44% believed that their fnancial records would be
incomplete
5
41% worried that they might miss a payment
6
More than half (56%) agree that they would be more
likely to read a paper statement compared with an online
statement, and half (49%) also agree that they would be
more likely to take action from a paper statement
7
5
Source: Insight Exchange, 2011
6
Source: Insight Exchange, 2011
7
Source: Insight Exchange, 2011
Alison Brown, 57, from Bristol, thinks it’s incredibly important to have
the choice of paper and online. Without access to paper statements
she wouldn’t be able to efectively look after her mother’s fnances.
Her mother also prefers paper, as she not only likes to have copies of
her own important documents, but enjoys the experience of getting post.
CASE STUDY:
6
Figure 1: Extent to which individuals agree or disagree with each statement
regarding paper and online bank statements
THE CONSEQUENCES OF
LACK OF CHOICE
Despite the important nature of transactional mail, there remain
long-term implications for taking away the options of printed
communications that have not been fully explored. There are
some aspects to online-only accounts that people may not have
considered, or that may not have been made clear to them when
they signed up for the account.
Some factors to consider:
Banks do not provide access to online statements beyond a
certain timescale and there is no standard for this, it varies
by provider. By changing banks you can potentially lose
access to your historical data.
Copies of online statements are not considered to be
ofcial documents by many institutions. Those needing
to secure an ofcial copy of an online statement may be
charged a fee.
Agree
Neither agree
nor disagree
Disagree Don’t know
56%
51%
49%
44%
41%
13%
24%
19%
17%
34%
31%
23%
31%
39%
23%
2%
1%
3%
I am likely to read a paper
statement than an online
statement
Online statements carry a
greater risk of identity fraud
than paper statements
I am more likely to take action
when reading a paper statement
than an online statement
I am more likely to delete an
online statement than shred
a letter
Paper statements are more
accessible than online
statements
7
Opinium’s research found that costs vary across the board, and
it is very common for service providers to charge additional costs
to provide duplicate statements, and that some providers only
give access to a limited number of historical statements.
Access to information can be compromised in the event
of technological failure. Last year has seen repeated
examples of bank IT system failures,
8
with customers of
RBS, Natwest, HSBC and Nationwide all locked out of their
online banking portals.
Access implications for those who are unable to remember
online passwords, and for carers looking to access the
online fnancial records of others.
We believe that it is every consumer’s right to choose how they
are contacted by banks, utility companies and other service
providers. However, some companies demonstrate a clear
preference towards the digital medium and are efectively
exercising a prejudicial attitude to those who choose paper.
Online-only tarifs, for instance EON’s EnergyOnline, promise
cheaper energy to customers managing their accounts online.
In November 2012, Natwest and RBS current account customers
were told that they would no longer receive monthly paper bank
account statements, unless they opt back into the system
9
.
Concerns over this blanket move are shared by consumer
groups, such as Which?, who commented on the bank’s move:
“The decision doesn’t consider the needs of people who still
rely on paper statements to manage their money and budget
effectively. Millions of people in the UK still have no access to
the internet, and those who do might not always feel
comfortable managing their bank accounts online. For those
people, there’s going to be an increased risk of payment errors
or fraudulent activity going unnoticed if they can only monitor
their accounts on a quarterly basis.”
10
8http://www.guardian.co.uk/money/2013/mar/07/furious-natwest-customers-leave-bank-it-crash
9http://www.bbc.co.uk/news/business-20137918
10http://conversation.which.co.uk/money/natwest-rbs-stopping-monthly-paper-statements/
8
CONSUMER VULNERABILITY
AND THE DIGITAL DIVIDE
According to ONS 2012 data, 7.1 million adults (15%) in the UK
have never used the internet. However, these statistics alone do
not capture the larger issue of digital capability, which is that an
estimated 16 million consumers aged over 15 don’t have basic
online skills.
11
Independent fndings of Opinium Research’s report demonstrate
that often the most vulnerable members of society are those most
dependent on traditional, postal transactional mail. The move to
an online-only society risks leaving the elderly, disabled, rural and
those on low incomes disenfranchised.
Our research found:
Preference for, and current use of postal/paper
transactional mail increases signifcantly with age
Amongst older consumers, the preference for postal statements
is signifcantly higher than average; varying from just under
two-ffths of 15 to 24-year-olds preferring postal statements
(36%), up to eight in 10 adults aged 65 and over, and nine in
10 adults aged 80 and over.
11
Go-On UK (http://www.go-on.co.uk/challenge/uk-snapshot)
CASE STUDY:
Ann Stevens, 66 from Helensburgh, is a pensioner who lives alone. She has never used
the internet before and is a self-confessed ‘technophobe’. Ann currently receives all of
her bills and statements via paper mail.
Ann says that she would be ‘annoyed’ if any of the businesses or organisations that she
uses changed her current way of receiving correspondence without giving her a clear
choice and is ‘very concerned’ that changes would leave her unable to manage her
fnances independently as she ‘likes to keep [her] own afairs in order’.
9
People in rural areas tend to prefer paper statements
The research found that, given the choice between paper
statements and online statements, more than half would choose
paper statements from their bank (54%), compared with just over
two-ffths who would prefer online (43%).
In rural areas, the preference for postal bank statements
increases to six in 10 adults.
Figure 2: How, if given the choice, customers would prefer to view their bank
statements – by age
57%
36%
57%
40%
50%
49%
46%
53%
35%
62%
17%
80%
9%
87%
6%
91%
15-24
25-34
35-44
45-54
55-64
65+
75+
80+
Online
By Post (Paper)
10
Disabled people have less access to the internet
28% of disabled people are not currently online. 53% of those
who have never used the internet are disabled, equating to
around four million Britons.
Citizens on low incomes or those unemployed are in
particular danger of being left behind
49% of people without access are in the lowest socio-economic
groups (DE).
The National Audit Ofce’s report ‘Digital Britain 2: Putting Users
at the Heart of Government’s Digital Services’
12
warns of the
concerns of a ‘them and us’ problem. The report comments:
12http://www.nao.org.uk/wp-content/uploads/2013/03/10123-001-Digital-Britain-2-Book.pdf
Figure 3: How, if given the choice, customers would prefer to view their bank
statements – overall & by location
43%
54%
38%
61%
43%
55%
46%
48%
Total
Rural
Suburban
Urban
Online
By Post (Paper)
Internet usage in the UK in 2012
86%
14%
Never used
Ever used
11
IN THE SMALL PRINT:
THE CURRENT CHOICES
AVAILABLE FOR CONSUMERS
In addition to conducting consumer research, Opinium carried
out a comprehensive review of current procedures employed
by a sample of fnancial services providers, utility and media
companies and found that, while a range of methods for sending
transactional mail is available, upfront choice for the consumer
is limited.
Our research found:
Financial services providers (current account and credit
card providers) on the whole ofer paper statements on a
monthly basis, but are not so strong in the area of clarity
and transparency of their communications.
Nearly two-thirds of utility companies (gas, electricity and
water) communicate with their customers via online-only
methods. Just four out of the 15 companies reviewed
ofer a clear choice as to how consumers would like to
receive statements.
13http://www.guardian.co.uk/public-leaders-network/2013/mar/11/reaching-people-without-online-access
“There is far to go before digital becomes everyone’s chosen
means of accessing public services. There are still signifcant
numbers of people who cannot, or do not wish to, go online.
The Government has set out plans to help such people use
digital channels but now needs to put these plans into action if
it is not to create a ‘them and us’ problem for those not online.”
In addition, charities and consumer groups representing those
that could be digitally disenfranchised have spoken out against
a broad brush approach. Writing in the Guardian, the Chief
Executive of AbilityNet commented:
“It is frankly naive to imagine that a digital channel shift,
designed to cut costs in a time of austerity, is going to be
accompanied by a major investment programme to support
those at risk of being left behind.”
13
It is vital that, in considering any digital strategy in the UK,
Government and companies consider capability as much
as access.
12
The majority of media companies communicate with their
customers via online-only channels as default (seven
out of 10 cases). Just two out of 10 media companies
give the customer the choice upfront whether to receive
transactional mail or not.
What is worrying is the trend amongst high street banks of
encouraging customers online and moving them away from
monthly statements. RBS Group is the latest fnancial services
provider to move customers to quarterly statements as default
– afecting around 7 million customers amongst their three
businesses RBS, NatWest and Ulster Bank.
Utility and media companies have already made a distinct shift
away from monthly paper billing and towards a preference for
online services. The majority of companies in both groups
have stopped issuing paper statements by default, apply
charges when print statements are requested and are with
terms and conditions when it comes to having the ability to
implement change.
Opinium’s review reveals that, from our sample, there is not a
single organisation ofering any guarantee to customers that
they will not change the way they communicate without
consent – leaving it up to the customer proactively to call
in or visit the branch in case the changes to their account
management are not welcome.
All three industry sectors appear to have a ‘default’ method
of sending their transactional mail, with options then available
afterwards if customers want something diferent. However the
options are not always free of charge or conditions, and tend to
suit the preferences of the organisations involved, rather than
the customers’ needs.
Rather than ofering customers a clear choice of paper or online,
or both forms of correspondence, the clear tendency is to
encourage and incentivise consumers into switching to online
communications. Companies across all three sectors promote
the environmental benefts, the convenience benefts and the
cost saving benefts of online or ‘paperless’ accounts.
Our research draws the strong conclusion that customers are
currently being tempted to operate online by fnancial incentives,
meaning customers who are unable to are fnancially penalised.
While this is less evident with banks that are currently still giving
consumers the choice, it is prevalent with utility companies
where consumers who opt for an online service can be
signifcantly better of.
“
Opinium’s review
reveals that, from our
sample, there is not
a single organisation
ofering any guarantee to
customers that they will
not change the way they
communicate without
consent – leaving it up
to the customer
proactively to call in or
visit the branch in case
the changes to their
account management
are not welcome.
”
13
Figure 4: Qualitative Analysis from Opinium Research
Read the table as follows: “23/24” in cell 1 of ‘Current Account Providers’ read
as “23 out of 24 organisations investigated for this particular parameter do
provide paper statements”.
Category
Current Account
Providers
Credit Card
Providers
Utilities Media
1
Paper statements sent by
default
23/24 13/15 8/15 3/10
2 Statements sent monthly 20/23 15/15 1/15 6/10
3
No charges for paper
statements
23/23 15/15 1/15 2/8
4
Charges for duplicate
statements
Majority: Ranges
from free - £10/ £5
most common
Majority: Ranges
from free - £6/ £5
most common
Only one: £1
Majority: Ranges
from free - £2.50
5 Longevity of statements 3 months - 7 years 3 months - 6 years
3 months -
unlimited
1 month -
unlimited
6
No detail on frequency of
billing in T&C
12/23 15/15 7/11 6/10
7 No detail on charges in T&C 16/23 12/15 10/11 10/10
8
No detail on notice period
for changes to billing in T&C
1/23 1/15 4/11 2/10
9
Consent not required for
changes (T&C)
23/23 15/15 11/11 10/10
10
Incentives offered for
switching
1/24 None 9/15 3/10
14
THE CURRENT
REGULATORY FRAMEWORK
Currently, there is limited regulation to ensure choice in customer
communications, despite a strong recognition of the need to
ensure consumers are informed and empowered.
Two key overarching themes run through all regulation of
customer communications in the banking, utility and media
sectors: i. a distinct lack of specifcity in defnition,
ii. and a lack of real consequences for non-compliance.
The Financial Conduct Authority (FCA)
The FCA’s ‘Journey to the Financial Conduct Authority’ handbook
states that: “Our interest is in making sure consumers get the
information that they need, in a way they can most easily beneft
from and via the most credible channel”.
14
Importantly, ‘credible’ is
not defned in this document.
The FSA Handbook’s “Banking Conduct of Business” source
book,
15
(regulation outlined by the Financial Conduct Authority
and Prudential Regulation Authority) states that: “A frm must
provide or make available to a banking customer on paper or in
another durable medium such regular statements of account as
are appropriate to the type of retail banking service provided.”
The reference to ‘durable medium’ is important, as the regulator
is clearly recognising the need for fnancial information to be kept
safe and accessible for the long term.
Royal Mail research into mail volumes and response rates by
industry sector found that consumers open 98% of direct mail
from banks.
16
Despite this, our evidence shows that banks are
beginning to change the frequency of bank statements (see
previous Natwest and RBS example) and not following guidance
on understanding what channel will most easily beneft and be
most credible for the consumer. Opinium’s research into the
terms and conditions of the major high street banks indicate that
fewer than a quarter of them actually ask their customers clearly
how they would like to receive their statements.
In order to deliver on this commitment, we urge the FCA
to look more closely at the issue of appropriate channels
of communication.
14http://www.fsa.gov.uk/about/what/reg_reform/fca
15https://fshandbook.info/FS/html/handbook/BCOBS/4/1
16
Mail Media Centre, Mail Volumes and Response Rates by Industry Sector 2010, (20 April 2011)
15
THE OFFICE OF GAS AND
ELECTRICITY MARKETS
(OFGEM)
The energy regulator, Ofgem, in response to a “baffing array of
tariffs”
17
currently on the market, has developed a framework and
implementation schedule for simplifying domestic energy tarifs.
However, Ofgem does not explicitly stipulate the choice
consumers have in regards to the communication channel they
use. As the domestic energy consumer can reduce cost by using
paperless communications, Ofgem simply requires companies to
make that advantage very clear and comparative. Furthermore,
Ofgem now requires to label the online element as a ‘discount’
whereas in the past, frms were allowed to label it as a completely
separate ‘core tarif’ – this is no longer allowed.
Consumer Focus research found that 77% of people receiving
paper energy bills always read them upon arrival, falling to 57%
of consumers who are billed online.
18
Ofgem’s own extensive
research found that “in comparison to paper documents, online
documents are opened and read by a smaller proportion of
consumers who receive them.”
19
Despite this, the energy and utilities market does not have clear
guidelines for customer communications preferences.
Opinium’s research found that just four of the 15 main energy
providers give a clear, upfront choice for customers in terms of
what they prefer. As noted earlier, customers are also actively
encouraged by all energy providers to go paperless and manage
their accounts online through signifcant fnancial incentives.
Figures from uSwitch.com state that online energy plans are often
up to £300 a year cheaper,
20
as energy providers seek to take
more customers online. This raises concerns that not only are
some customers being encouraged to sign up to energy plans
with monthly bills that they are then unable to access, but that
older people, traditionally those at most risk of fuel poverty, are
unable to access the cheapest forms of energy.
As the specialist older person’s website WhenTheyGetOlder.co.uk
comments: “Online tariffs are cheaper, but they often come at a
price.”
21
17
Source: Ofgem Retail Market Review, 2012, here:http://www.ofgem.gov.uk/Markets/RetMkts/ensuppro/Documents1/Standards of conduct for suppliers in
18
Source: Ipsos Mori research paper for Ofgem, here:http://www.ofgem.gov.uk/Markets/RetMkts/rmr/Documents1/
Prompting%20engagement%20with%20and%20retention%20of%20written%20customer%20communications.pdf
(Retrieved: February 2013)
19
Source: Ofgem, here:http://www.ofgem.gov.uk/Markets/RetMkts/rmr/Documents1/Lawes_Language_Report.pdf
(Retrieved: February 2013)
20http://www.uswitch.com/gas-electricity/guides/online-energy-plans/
21http://www.whentheygetolder.co.uk/saving-money-on-your-parents-energy-bills/
“
Ofgem’s own
extensive research
found that “in
comparison to paper
documents, online
documents are opened
and read by a smaller
proportion of consumers
who receive them”.
”
16
Ofce of Communications (OFCOM)
Ofcom states that the ‘interests of citizens’ are ‘at the heart of
everything [they] do’.
22
On charges for paper bills, Ofcom has
published the following:
“Customers have told us they don’t think it’s fair they should
pay an extra charge to receive a paper bill that lists all of their
calls (an ‘itemised’ bill). They’re also confused about which
companies make this charge, and which don’t .”
23
Despite this,
media companies – telephone, internet and television service
providers – are the most prolifc at charging customers for
paper statements.
Only two out of the 10 companies researched by Opinium gave
customers the choice of bill format when signing up. In three-
quarters of cases (6 out of 8) where paper bills are made available
to customers, their customers are charged for this service.
Ofcom’s guidance states that if a provider makes it clear in a
contract that they will be charging for paper transactional mail,
then this can be charged additionally. Confusingly, this regulation
asks that the additional information be made ‘obvious enough’,
but does not give specifc detail on the defnition of ‘obvious’.
24
Without guidance to businesses on how they should
communicate with their customers, it is easy to see how
companies are able to make decisions that focus on commerce,
rather than customers.
THE GOVERNMENT’S ROLE?
In November 2012 the Government announced its strategy to
become ‘Digital By Default,’
25
in order to save up to £1.8 billion
a year, with the intention that this policy was to take efect as
early as February 2014. This strategy sets out how transactional
services within Government departments (such as applications,
tax, licensing and payments) are to move online, with each
department promoting the benefts of online as a method.
This approach is echoed across Government. In his foreword to
the Civil Service Reform Plan,
26
Minister for the Cabinet Ofce
Francis Maude said: “Central Government where possible must
become a digital organisation. These days the best service
organisations deliver online everything that can be delivered
online. This cuts their costs dramatically.”
22http://www.ofcom.org.uk/about/what-is-ofcom
23http://stakeholders.ofcom.org.uk/consultations/addcharges/pes_statement
24http://stakeholders.ofcom.org.uk/consultations/addcharges/pes_statement
25http://stakeholders.ofcom.org.uk/consultations/addcharges/pes_statement
26http://publications.cabinetofce.gov.uk/digital/strategy/
27http://my.civilservice.gov.uk/reform/
17
28http://www.nao.org.uk/press-release...-the-heart-of-governments-digital-services-2/
29http://www.lgcplus.com/topics/benefts/universal-credits-digital-by-default-ditched/5057200.article
These policies focus primarily on the cost of savings for the
taxpayer, with no reference to the potential benefts of paper
correspondence even for those individuals who are able to
access digital services.
A major part of the Government’s solution to provide information
to those not currently online is through a service called ‘Assisted
Digital’, namely helping people to get online. For those who have
no capacity to use online, or those who simply prefer not to, the
Government has no current solution. Rather than aford them the
same consideration provided to those online, it has announced
that it each department will “consider how they will provide
this assistance.”
Press coverage has focused on the fact that the system is
designed to provide assistance to those who are on benefts –
despite the fact that many of the UK’s most vulnerable people,
without online access, fall into this group.
27
The National Audit Ofce has expressed concern that the
Government’s aim to make public services ‘digital by default’
ignores a signifcant number of people. According to the
spending watchdog, there are still signifcant numbers of
people who cannot go online or do not wish to do so.
Research carried out by the National Audit Ofce also found
three main potential reasons why people choose not to use
more online public services:
i. A preference for face-to-face contact
ii. A broad unwillingness to provide personal information online
iii. Low awareness of some online public services
It states: “The Government has set out plans to help people not
on the internet to use digital services. Given the scale of ‘digital
exclusion’, the Government now needs to put these plans into
action to avoid a ‘them and us’ problem. Of those surveyed, 17
per cent did not use the internet and, of those, 72 per cent do
not intend to go online. Based on these numbers, departments
need to plan for around four million people in England who are
likely to need help in using online services. However, of those not
on the internet, 48 per cent receive help from friends and family
with internet access, a fact not recognised in the Government’s
approach to assisted digital services”.
28
The needs of these people are now coming to the forefront;
this year saw the Government modify its decision to provide
the Universal Credit system purely online. The phrase ‘digital
as appropriate’, as opposed to ‘digital by default’, is now being
used to describe the Universal Credit system.
29
“
Of those surveyed,
17 per cent did not
use the internet and,
of those, 72 per cent
do not intend to go
online. Based on these
numbers, departments
need to plan for around
four million people in
England who are likely
to need help in using
online services.
”
The National Audit Offce
18
WHAT STEPS MUST BE
TAKEN TO PROTECT
CONSUMER CHOICE?
Opinium’s research is clear that often when decisions are made
about customer communications, the business case is favoured
above consumer rights and preferences. To combat this, we are
asking all businesses to sign up to the Keep Me Posted pledge.
It is every consumer’s right to choose without penalty how they
are contacted by banks, utility companies and other service
providers. It is our aim to protect consumers from any form of
social or fnancial disadvantage arising from the withdrawal of
paper correspondence.
THE KEEP ME POSTED
RIGHT TO CHOOSE PLEDGE
We call upon organisations to sign the Keep Me Posted pledge,
acting quickly to put in measures that ensure that:
Ofer all of their customers the choice of receiving
information through paper correspondence as part of
any standard ofer
Refrain from penalising in any way, any customer
for preferring to receive information through paper
correspondence
Only cease the sending of information in paper
correspondence to a customer after (and not before) the
customer has specifcally, voluntarily and individually opted
out of receiving information on paper
Only change the frequency of information sent to
customers in paper correspondence after (and not before)
the customer has specifcally, voluntarily and individually
agreed to the change
Refrain from making the availability of online information to
customers necessarily conditional upon having to give up
their access to paper correspondence
Make available to customers easy mechanisms whereby
a customer who has chosen not to receive paper
correspondence can opt back in without penalty
“
It is every
consumer’s right to
choose without penalty
how they are contacted
by banks, utility
companies and other
service providers.
”
19
Only when the UK’s businesses and service providers put these
measures in place will consumers have free choice over how they
are communicated with.
We are also calling upon UK consumers to share their stories,
preferences and experience with the Keep Me Posted campaign,
to ensure that we are able to fully represent and fght for the
consumer point of view.
THE CAMPAIGN
Keep Me Posted is a partnership of representatives from
charities, consumer groups and business. We’ve come together
as we believe that we have a responsibility to fght for the
consumer’s right to choose.
We believe that it is every consumer’s right to choose, without
disadvantage, how they are contacted by banks and other
fnancial service companies, utility companies, media companies
and other service providers. Increasingly businesses are
restricting access to paper bills and statements and denying their
customers an informed choice.
Members of the Keep Me Posted campaign include: Mind,
the National Consumer Federation, The National Federation of
Occupational Pensioners, the Post Ofce, as well as UK postal
operators Royal Mail, TNT Post and UK Mail.
The campaign is funded by UK postal operators, Royal Mail, TNT
Post and UK Mail.
20
APPENDIX
THE METHODOLOGY
In the interest of ascertaining an accurate depiction of consumer
needs, the KMP campaign commissioned Opinium Research
to produce a defnitive research report which marries long-term
insight with up-to-date consumer polling. Opinium carried out
consumer research into mail preferences as well as analysing
the choices consumers are given across three sectors (fnancial
services, utilities and media) to opt in/out of receiving online and
paper transactional correspondence.
The consumer research included:
An online survey nationally representative panel of 2,000
UK adults conducted by Opinium in 2013
Face-to-face interviews with 997 adults (unweighted)
conducted by IPSOS Mori in 2012
Phone interviews from a pool of business customers plus
new large business contacts provided by Royal Mail’s retail
and wholesale team, conducted by Accent in 2012
Survey of a nationally representative online panel of
607 nationally representative adults conducted by
Insight Exchange in 2011
Telephone interviews with a random sample of 500 adults
carried out by Quadrangle in 2010
Sector-specifc research
The following paragraphs outline the questions researched within
each sector, the providers researched and, where relevant, the
reasons for these selections.
Methodology: Personal fnance
For the section on personal fnance, three diferent types of
providers were researched – frstly current account providers
comprised of both banks and building societies and, secondly,
credit card providers.
A total of 19 banks, fve building societies and 15 credit card
providers were researched, using a combination of desk research
and telephone calls to the organisations’ customer services
teams. The aim was to provide information on each of the
providers on the following parameters:
Default method for receiving account statements
21
Frequency of paper statements
Whether there is a charge for receiving paper statements
How easy it is to opt back into paper statements
Methods of getting in touch about account
changes/notifcations
Whether there is a charge for duplicate statement
How far back do online statements go
How easy would it be for banks to switch how they
communicate with their customers, without gaining
their consent
Sample of banks researched
for Current Accounts
Sample of banks researched
for Current Accounts
*
For all building societies their standard current accounts were investigated except for Yorkshire Building Society
where their ‘CashTransactor Account’ – which is similar to a standard current account – was examined.
Sample of Credit
Card Providers
Name of provider Type
Bank of Scotland Bank with High Street Branches
Barclays Bank Bank with High Street Branches
C. Hoare & Co Private Bank, no branch network
Card One Banking Online-only
Citibank Bank with High Street Branches
Co-operative Bank Bank with High Street Branches
First Direct Online-only
Halifax Bank with High Street Branches
HSBC Bank PLC Bank with High Street Branches
Lloyds TSB Bank with High Street Branches
M & S Bank Bank with High Street Branches
Metro Bank Bank with High Street Branches
National Westminster Bank (NatWest) Bank with High Street Branches
Royal Bank of Scotland Bank with High Street Branches
Santander Bank with High Street Branches
Secure Trust Bank Online-only
Think Money Online-only
Unity Trust bank Business Bank, no branches
Yorkshire Bank Bank with High Street Branches
Name of provider
Yorkshire Building Society *
Coventry Building Society
Britannia Building Society
Cumberland Building Society
Nationwide Building Society
Name of provider
Amex HSBC Post Ofce
Bank of Scotland Lloyds TSB RBS
Barclays M&S Santander
Capital one Nationwide Tesco
Halifax NatWest The Co-Operative
22
Methodology: Utilities
Desk research, complemented by telephone calls to each utility
company’s customer services team, was conducted amongst
16 utility companies to establish the following information:
Usual method for receiving account statements
Frequency of paper statements
Whether there is a charge for receiving paper statements
How easy to opt back into paper statements
Methods of getting in touch about account changes/
notifcations
Whether there is a charge for duplicate statement
How far back do online statements go
Whether customers are able to download an
application form
Whether they email terms and conditions
How customers are incentivised to switch from paper to
online bills
How easy would it be for utility companies to switch how
they communicate with their customers, without gaining
their consent
In terms of sample, the 15 utility companies that have been
researched include a mix of gas and electricity providers, and
water providers, as summarised in the table below.
Sample of banks researched for Current Accounts
Name of provider Type
Good Energy Gas & Electricity
Ecotricity Gas & Electricity
Thames Water Water
Anglian Water Water
Southern Water Water
The Co-operative Energy Gas & Electricity
Wessex Water Water
United Utilities Water
SSE Gas & Electricity
Eon Gas & Electricity
First Utility Gas & Electricity
British Gas Gas & Electricity
Scottish Power Gas & Electricity
EDF Energy Gas & Electricity
Npower Gas & Electricity
23
Methodology: Media
To quantify the current procedures in the media sector, desk
research, complemented by telephone calls to media companies’
customer services teams has been conducted amongst 10 media
companies. The following parameters were examined:
Usual method for receiving account statements
Frequency of paper statements
Whether there is a charge for receiving paper statements
How easy to opt back into paper statements
Methods of getting in touch about account changes/
notifcations
Whether there is a charge for duplicate statement
How far back do online statements go
Whether customers are able to download an
application form
Whether they email terms and conditions
How customers are incentivised to switch from paper to
online bills
How easy would it be for media companies to switch how
they communicate with their customers, without gaining
their consent
The table below provides a list of the 10 media companies
researched which provide a mix of landline telephone, mobile
phone, internet and television services.
Sample of media companies
Name of provider
BT Group
PlusNet (BT but separate business)
Virgin Media
Sky
TalkTalk Group
EE
Three
Post Ofce
O2 (being sold to Sky)
BE (being sold to Sky)
CONTACT US
To sign-up and for further
information about the
Keep Me Posted campaign:
Write to us:
Keep Me Posted
PO Box 72064
London EC4P 4DZ
Call or e-mail us:
020 7566 9773
[email protected]
Visit our website:
www.keepmeposteduk.com
Or follow us on Twitter:
@KeepMePostedUK
doc_325584061.pdf
The impact of the internet on our everyday lives has led to a breadth of opportunity and convenience for many people. Big business’ readiness to adopt this technology is to a certain extent admirable; it shows a willingness to embrace new and interesting ideas.
KEEP ME
POSTED
Paper and Digital Communications:
the case for consumer choice
KEEP ME POSTED
A word from our Chair…
The impact of the internet on our everyday lives has led to
a breadth of opportunity and convenience for many people.
Big business’ readiness to adopt this technology is to a certain
extent admirable; it shows a willingness to embrace new
and interesting ideas. However, research indicates that many
consumers want choice. Not all consumers are currently
ready, willing, or even able to communicate with companies
solely through digital means.
It appears to me that in their drive for greater efciency and cost
savings, many businesses have forgotten to consult customers
about their ability and willingness to switch to online, and the
implications of taking away choice.
It is this belief that has led me to commit myself to the Keep
Me Posted campaign. We have a difcult job ahead of us but
our demands are simple and to my mind, perfectly reasonable.
All we are asking for is that major companies give consumers
back the choice which, as customers, is rightfully theirs anyway.
Judith Donovan CBE, Chair,
Keep Me Posted campaign
3
INTRODUCTION
The rise of digital services has led to greater access, control
and freedom for consumers. Service providers have rushed to
embrace digital communication, citing customer convenience
and ease. However, concern is growing that many companies
are encouraging or incentivising their customers to receive their
information in an online-only format, rather than ofer the choice
of method. This development restricts customer choice and risks
causing consumer harm.
The Keep Me Posted campaign (KMP) is a partnership
representing charities, consumers and businesses who believe
in the right of consumers to choose the way that companies
communicate with them. We believe every consumer should
be able to choose, without being penalised, a paper copy of
communications from banks, utility companies and other
service providers.
In the interest of ascertaining an accurate depiction of consumer
needs, the KMP campaign commissioned Opinium Research
to produce a defnitive independent research report which
marries long-term insight with up-to-date consumer polling and
qualitative analysis of terms and conditions. The full methodology
is in the appendix of this document.
This report looks at:
Consumer attitudes towards communications choice
How lack of choice afects all consumers
The consequences of lack of choice
Consumer vulnerability and the digital divide
The current choices available for consumers
How existing regulation does not protect consumer choice
What steps must be taken to protect consumer choice
4
CONSUMER ATTITUDES
The research found that, as we suspected, there is one voice
largely missing in the drive to digital communication: that of
the consumer.
The majority of businesses are now making decisions about
customer communications, with limited consideration of their
customers’ needs or preferences.
By limiting consumer choice over how they are contacted,
businesses could detrimentally impact on the social and fnancial
health of their customers, in addition to risking their own
reputations and commercial interests.
So what do consumers actually want?
Overall, an overwhelming majority (81%) of consumers
think it is important to have the choice in how they
access fnancial information and statements from all
service providers
1
84% agree they do not like it when companies take
away the choice regarding the way they receive their bills
and statements
2
15% said they would take their business elsewhere and
50% would consider doing so if companies take away
the choice
3
Most consumers like a combination of both paper and
online: 76% agreed that their preference is to have
statements online so they can quickly check, but to also
have them sent in the post to read thoroughly when they
have more time
4
1
Source: Opinium, 2013
2
Source: Quadrangle, 2010
3
Source: Quadrangle, 2010
4
Source: Quadrangle, 2010
“
(81%) of
consumers think it
is important to have
the choice in how
they access fnancial
information and
statements from all
service providers
”
5
HOW THIS AFFECTS
ALL CONSUMERS
Opinium’s research makes clear that the benefts of
communications choice when it comes to transactional mail –
such as important bills and statements – are not limited to the
more vulnerable.
The research indicates that, without access to paper statements,
customers are more likely to miss payments and less likely to
have a handle on their fnances. Four out of fve people admit that
they are more likely to read statements that are available both
online and by post.
When Britons were asked about the impact of losing paper
statements, the research found that removing the option of
physical mail takes control away from customers:
44% believed that their fnancial records would be
incomplete
5
41% worried that they might miss a payment
6
More than half (56%) agree that they would be more
likely to read a paper statement compared with an online
statement, and half (49%) also agree that they would be
more likely to take action from a paper statement
7
5
Source: Insight Exchange, 2011
6
Source: Insight Exchange, 2011
7
Source: Insight Exchange, 2011
Alison Brown, 57, from Bristol, thinks it’s incredibly important to have
the choice of paper and online. Without access to paper statements
she wouldn’t be able to efectively look after her mother’s fnances.
Her mother also prefers paper, as she not only likes to have copies of
her own important documents, but enjoys the experience of getting post.
CASE STUDY:
6
Figure 1: Extent to which individuals agree or disagree with each statement
regarding paper and online bank statements
THE CONSEQUENCES OF
LACK OF CHOICE
Despite the important nature of transactional mail, there remain
long-term implications for taking away the options of printed
communications that have not been fully explored. There are
some aspects to online-only accounts that people may not have
considered, or that may not have been made clear to them when
they signed up for the account.
Some factors to consider:
Banks do not provide access to online statements beyond a
certain timescale and there is no standard for this, it varies
by provider. By changing banks you can potentially lose
access to your historical data.
Copies of online statements are not considered to be
ofcial documents by many institutions. Those needing
to secure an ofcial copy of an online statement may be
charged a fee.
Agree
Neither agree
nor disagree
Disagree Don’t know
56%
51%
49%
44%
41%
13%
24%
19%
17%
34%
31%
23%
31%
39%
23%
2%
1%
3%
I am likely to read a paper
statement than an online
statement
Online statements carry a
greater risk of identity fraud
than paper statements
I am more likely to take action
when reading a paper statement
than an online statement
I am more likely to delete an
online statement than shred
a letter
Paper statements are more
accessible than online
statements
7
Opinium’s research found that costs vary across the board, and
it is very common for service providers to charge additional costs
to provide duplicate statements, and that some providers only
give access to a limited number of historical statements.
Access to information can be compromised in the event
of technological failure. Last year has seen repeated
examples of bank IT system failures,
8
with customers of
RBS, Natwest, HSBC and Nationwide all locked out of their
online banking portals.
Access implications for those who are unable to remember
online passwords, and for carers looking to access the
online fnancial records of others.
We believe that it is every consumer’s right to choose how they
are contacted by banks, utility companies and other service
providers. However, some companies demonstrate a clear
preference towards the digital medium and are efectively
exercising a prejudicial attitude to those who choose paper.
Online-only tarifs, for instance EON’s EnergyOnline, promise
cheaper energy to customers managing their accounts online.
In November 2012, Natwest and RBS current account customers
were told that they would no longer receive monthly paper bank
account statements, unless they opt back into the system
9
.
Concerns over this blanket move are shared by consumer
groups, such as Which?, who commented on the bank’s move:
“The decision doesn’t consider the needs of people who still
rely on paper statements to manage their money and budget
effectively. Millions of people in the UK still have no access to
the internet, and those who do might not always feel
comfortable managing their bank accounts online. For those
people, there’s going to be an increased risk of payment errors
or fraudulent activity going unnoticed if they can only monitor
their accounts on a quarterly basis.”
10
8http://www.guardian.co.uk/money/2013/mar/07/furious-natwest-customers-leave-bank-it-crash
9http://www.bbc.co.uk/news/business-20137918
10http://conversation.which.co.uk/money/natwest-rbs-stopping-monthly-paper-statements/
8
CONSUMER VULNERABILITY
AND THE DIGITAL DIVIDE
According to ONS 2012 data, 7.1 million adults (15%) in the UK
have never used the internet. However, these statistics alone do
not capture the larger issue of digital capability, which is that an
estimated 16 million consumers aged over 15 don’t have basic
online skills.
11
Independent fndings of Opinium Research’s report demonstrate
that often the most vulnerable members of society are those most
dependent on traditional, postal transactional mail. The move to
an online-only society risks leaving the elderly, disabled, rural and
those on low incomes disenfranchised.
Our research found:
Preference for, and current use of postal/paper
transactional mail increases signifcantly with age
Amongst older consumers, the preference for postal statements
is signifcantly higher than average; varying from just under
two-ffths of 15 to 24-year-olds preferring postal statements
(36%), up to eight in 10 adults aged 65 and over, and nine in
10 adults aged 80 and over.
11
Go-On UK (http://www.go-on.co.uk/challenge/uk-snapshot)
CASE STUDY:
Ann Stevens, 66 from Helensburgh, is a pensioner who lives alone. She has never used
the internet before and is a self-confessed ‘technophobe’. Ann currently receives all of
her bills and statements via paper mail.
Ann says that she would be ‘annoyed’ if any of the businesses or organisations that she
uses changed her current way of receiving correspondence without giving her a clear
choice and is ‘very concerned’ that changes would leave her unable to manage her
fnances independently as she ‘likes to keep [her] own afairs in order’.
9
People in rural areas tend to prefer paper statements
The research found that, given the choice between paper
statements and online statements, more than half would choose
paper statements from their bank (54%), compared with just over
two-ffths who would prefer online (43%).
In rural areas, the preference for postal bank statements
increases to six in 10 adults.
Figure 2: How, if given the choice, customers would prefer to view their bank
statements – by age
57%
36%
57%
40%
50%
49%
46%
53%
35%
62%
17%
80%
9%
87%
6%
91%
15-24
25-34
35-44
45-54
55-64
65+
75+
80+
Online
By Post (Paper)
10
Disabled people have less access to the internet
28% of disabled people are not currently online. 53% of those
who have never used the internet are disabled, equating to
around four million Britons.
Citizens on low incomes or those unemployed are in
particular danger of being left behind
49% of people without access are in the lowest socio-economic
groups (DE).
The National Audit Ofce’s report ‘Digital Britain 2: Putting Users
at the Heart of Government’s Digital Services’
12
warns of the
concerns of a ‘them and us’ problem. The report comments:
12http://www.nao.org.uk/wp-content/uploads/2013/03/10123-001-Digital-Britain-2-Book.pdf
Figure 3: How, if given the choice, customers would prefer to view their bank
statements – overall & by location
43%
54%
38%
61%
43%
55%
46%
48%
Total
Rural
Suburban
Urban
Online
By Post (Paper)
Internet usage in the UK in 2012
86%
14%
Never used
Ever used
11
IN THE SMALL PRINT:
THE CURRENT CHOICES
AVAILABLE FOR CONSUMERS
In addition to conducting consumer research, Opinium carried
out a comprehensive review of current procedures employed
by a sample of fnancial services providers, utility and media
companies and found that, while a range of methods for sending
transactional mail is available, upfront choice for the consumer
is limited.
Our research found:
Financial services providers (current account and credit
card providers) on the whole ofer paper statements on a
monthly basis, but are not so strong in the area of clarity
and transparency of their communications.
Nearly two-thirds of utility companies (gas, electricity and
water) communicate with their customers via online-only
methods. Just four out of the 15 companies reviewed
ofer a clear choice as to how consumers would like to
receive statements.
13http://www.guardian.co.uk/public-leaders-network/2013/mar/11/reaching-people-without-online-access
“There is far to go before digital becomes everyone’s chosen
means of accessing public services. There are still signifcant
numbers of people who cannot, or do not wish to, go online.
The Government has set out plans to help such people use
digital channels but now needs to put these plans into action if
it is not to create a ‘them and us’ problem for those not online.”
In addition, charities and consumer groups representing those
that could be digitally disenfranchised have spoken out against
a broad brush approach. Writing in the Guardian, the Chief
Executive of AbilityNet commented:
“It is frankly naive to imagine that a digital channel shift,
designed to cut costs in a time of austerity, is going to be
accompanied by a major investment programme to support
those at risk of being left behind.”
13
It is vital that, in considering any digital strategy in the UK,
Government and companies consider capability as much
as access.
12
The majority of media companies communicate with their
customers via online-only channels as default (seven
out of 10 cases). Just two out of 10 media companies
give the customer the choice upfront whether to receive
transactional mail or not.
What is worrying is the trend amongst high street banks of
encouraging customers online and moving them away from
monthly statements. RBS Group is the latest fnancial services
provider to move customers to quarterly statements as default
– afecting around 7 million customers amongst their three
businesses RBS, NatWest and Ulster Bank.
Utility and media companies have already made a distinct shift
away from monthly paper billing and towards a preference for
online services. The majority of companies in both groups
have stopped issuing paper statements by default, apply
charges when print statements are requested and are with
terms and conditions when it comes to having the ability to
implement change.
Opinium’s review reveals that, from our sample, there is not a
single organisation ofering any guarantee to customers that
they will not change the way they communicate without
consent – leaving it up to the customer proactively to call
in or visit the branch in case the changes to their account
management are not welcome.
All three industry sectors appear to have a ‘default’ method
of sending their transactional mail, with options then available
afterwards if customers want something diferent. However the
options are not always free of charge or conditions, and tend to
suit the preferences of the organisations involved, rather than
the customers’ needs.
Rather than ofering customers a clear choice of paper or online,
or both forms of correspondence, the clear tendency is to
encourage and incentivise consumers into switching to online
communications. Companies across all three sectors promote
the environmental benefts, the convenience benefts and the
cost saving benefts of online or ‘paperless’ accounts.
Our research draws the strong conclusion that customers are
currently being tempted to operate online by fnancial incentives,
meaning customers who are unable to are fnancially penalised.
While this is less evident with banks that are currently still giving
consumers the choice, it is prevalent with utility companies
where consumers who opt for an online service can be
signifcantly better of.
“
Opinium’s review
reveals that, from our
sample, there is not
a single organisation
ofering any guarantee to
customers that they will
not change the way they
communicate without
consent – leaving it up
to the customer
proactively to call in or
visit the branch in case
the changes to their
account management
are not welcome.
”
13
Figure 4: Qualitative Analysis from Opinium Research
Read the table as follows: “23/24” in cell 1 of ‘Current Account Providers’ read
as “23 out of 24 organisations investigated for this particular parameter do
provide paper statements”.
Category
Current Account
Providers
Credit Card
Providers
Utilities Media
1
Paper statements sent by
default
23/24 13/15 8/15 3/10
2 Statements sent monthly 20/23 15/15 1/15 6/10
3
No charges for paper
statements
23/23 15/15 1/15 2/8
4
Charges for duplicate
statements
Majority: Ranges
from free - £10/ £5
most common
Majority: Ranges
from free - £6/ £5
most common
Only one: £1
Majority: Ranges
from free - £2.50
5 Longevity of statements 3 months - 7 years 3 months - 6 years
3 months -
unlimited
1 month -
unlimited
6
No detail on frequency of
billing in T&C
12/23 15/15 7/11 6/10
7 No detail on charges in T&C 16/23 12/15 10/11 10/10
8
No detail on notice period
for changes to billing in T&C
1/23 1/15 4/11 2/10
9
Consent not required for
changes (T&C)
23/23 15/15 11/11 10/10
10
Incentives offered for
switching
1/24 None 9/15 3/10
14
THE CURRENT
REGULATORY FRAMEWORK
Currently, there is limited regulation to ensure choice in customer
communications, despite a strong recognition of the need to
ensure consumers are informed and empowered.
Two key overarching themes run through all regulation of
customer communications in the banking, utility and media
sectors: i. a distinct lack of specifcity in defnition,
ii. and a lack of real consequences for non-compliance.
The Financial Conduct Authority (FCA)
The FCA’s ‘Journey to the Financial Conduct Authority’ handbook
states that: “Our interest is in making sure consumers get the
information that they need, in a way they can most easily beneft
from and via the most credible channel”.
14
Importantly, ‘credible’ is
not defned in this document.
The FSA Handbook’s “Banking Conduct of Business” source
book,
15
(regulation outlined by the Financial Conduct Authority
and Prudential Regulation Authority) states that: “A frm must
provide or make available to a banking customer on paper or in
another durable medium such regular statements of account as
are appropriate to the type of retail banking service provided.”
The reference to ‘durable medium’ is important, as the regulator
is clearly recognising the need for fnancial information to be kept
safe and accessible for the long term.
Royal Mail research into mail volumes and response rates by
industry sector found that consumers open 98% of direct mail
from banks.
16
Despite this, our evidence shows that banks are
beginning to change the frequency of bank statements (see
previous Natwest and RBS example) and not following guidance
on understanding what channel will most easily beneft and be
most credible for the consumer. Opinium’s research into the
terms and conditions of the major high street banks indicate that
fewer than a quarter of them actually ask their customers clearly
how they would like to receive their statements.
In order to deliver on this commitment, we urge the FCA
to look more closely at the issue of appropriate channels
of communication.
14http://www.fsa.gov.uk/about/what/reg_reform/fca
15https://fshandbook.info/FS/html/handbook/BCOBS/4/1
16
Mail Media Centre, Mail Volumes and Response Rates by Industry Sector 2010, (20 April 2011)
15
THE OFFICE OF GAS AND
ELECTRICITY MARKETS
(OFGEM)
The energy regulator, Ofgem, in response to a “baffing array of
tariffs”
17
currently on the market, has developed a framework and
implementation schedule for simplifying domestic energy tarifs.
However, Ofgem does not explicitly stipulate the choice
consumers have in regards to the communication channel they
use. As the domestic energy consumer can reduce cost by using
paperless communications, Ofgem simply requires companies to
make that advantage very clear and comparative. Furthermore,
Ofgem now requires to label the online element as a ‘discount’
whereas in the past, frms were allowed to label it as a completely
separate ‘core tarif’ – this is no longer allowed.
Consumer Focus research found that 77% of people receiving
paper energy bills always read them upon arrival, falling to 57%
of consumers who are billed online.
18
Ofgem’s own extensive
research found that “in comparison to paper documents, online
documents are opened and read by a smaller proportion of
consumers who receive them.”
19
Despite this, the energy and utilities market does not have clear
guidelines for customer communications preferences.
Opinium’s research found that just four of the 15 main energy
providers give a clear, upfront choice for customers in terms of
what they prefer. As noted earlier, customers are also actively
encouraged by all energy providers to go paperless and manage
their accounts online through signifcant fnancial incentives.
Figures from uSwitch.com state that online energy plans are often
up to £300 a year cheaper,
20
as energy providers seek to take
more customers online. This raises concerns that not only are
some customers being encouraged to sign up to energy plans
with monthly bills that they are then unable to access, but that
older people, traditionally those at most risk of fuel poverty, are
unable to access the cheapest forms of energy.
As the specialist older person’s website WhenTheyGetOlder.co.uk
comments: “Online tariffs are cheaper, but they often come at a
price.”
21
17
Source: Ofgem Retail Market Review, 2012, here:http://www.ofgem.gov.uk/Markets/RetMkts/ensuppro/Documents1/Standards of conduct for suppliers in
18
Source: Ipsos Mori research paper for Ofgem, here:http://www.ofgem.gov.uk/Markets/RetMkts/rmr/Documents1/
Prompting%20engagement%20with%20and%20retention%20of%20written%20customer%20communications.pdf
(Retrieved: February 2013)
19
Source: Ofgem, here:http://www.ofgem.gov.uk/Markets/RetMkts/rmr/Documents1/Lawes_Language_Report.pdf
(Retrieved: February 2013)
20http://www.uswitch.com/gas-electricity/guides/online-energy-plans/
21http://www.whentheygetolder.co.uk/saving-money-on-your-parents-energy-bills/
“
Ofgem’s own
extensive research
found that “in
comparison to paper
documents, online
documents are opened
and read by a smaller
proportion of consumers
who receive them”.
”
16
Ofce of Communications (OFCOM)
Ofcom states that the ‘interests of citizens’ are ‘at the heart of
everything [they] do’.
22
On charges for paper bills, Ofcom has
published the following:
“Customers have told us they don’t think it’s fair they should
pay an extra charge to receive a paper bill that lists all of their
calls (an ‘itemised’ bill). They’re also confused about which
companies make this charge, and which don’t .”
23
Despite this,
media companies – telephone, internet and television service
providers – are the most prolifc at charging customers for
paper statements.
Only two out of the 10 companies researched by Opinium gave
customers the choice of bill format when signing up. In three-
quarters of cases (6 out of 8) where paper bills are made available
to customers, their customers are charged for this service.
Ofcom’s guidance states that if a provider makes it clear in a
contract that they will be charging for paper transactional mail,
then this can be charged additionally. Confusingly, this regulation
asks that the additional information be made ‘obvious enough’,
but does not give specifc detail on the defnition of ‘obvious’.
24
Without guidance to businesses on how they should
communicate with their customers, it is easy to see how
companies are able to make decisions that focus on commerce,
rather than customers.
THE GOVERNMENT’S ROLE?
In November 2012 the Government announced its strategy to
become ‘Digital By Default,’
25
in order to save up to £1.8 billion
a year, with the intention that this policy was to take efect as
early as February 2014. This strategy sets out how transactional
services within Government departments (such as applications,
tax, licensing and payments) are to move online, with each
department promoting the benefts of online as a method.
This approach is echoed across Government. In his foreword to
the Civil Service Reform Plan,
26
Minister for the Cabinet Ofce
Francis Maude said: “Central Government where possible must
become a digital organisation. These days the best service
organisations deliver online everything that can be delivered
online. This cuts their costs dramatically.”
22http://www.ofcom.org.uk/about/what-is-ofcom
23http://stakeholders.ofcom.org.uk/consultations/addcharges/pes_statement
24http://stakeholders.ofcom.org.uk/consultations/addcharges/pes_statement
25http://stakeholders.ofcom.org.uk/consultations/addcharges/pes_statement
26http://publications.cabinetofce.gov.uk/digital/strategy/
27http://my.civilservice.gov.uk/reform/
17
28http://www.nao.org.uk/press-release...-the-heart-of-governments-digital-services-2/
29http://www.lgcplus.com/topics/benefts/universal-credits-digital-by-default-ditched/5057200.article
These policies focus primarily on the cost of savings for the
taxpayer, with no reference to the potential benefts of paper
correspondence even for those individuals who are able to
access digital services.
A major part of the Government’s solution to provide information
to those not currently online is through a service called ‘Assisted
Digital’, namely helping people to get online. For those who have
no capacity to use online, or those who simply prefer not to, the
Government has no current solution. Rather than aford them the
same consideration provided to those online, it has announced
that it each department will “consider how they will provide
this assistance.”
Press coverage has focused on the fact that the system is
designed to provide assistance to those who are on benefts –
despite the fact that many of the UK’s most vulnerable people,
without online access, fall into this group.
27
The National Audit Ofce has expressed concern that the
Government’s aim to make public services ‘digital by default’
ignores a signifcant number of people. According to the
spending watchdog, there are still signifcant numbers of
people who cannot go online or do not wish to do so.
Research carried out by the National Audit Ofce also found
three main potential reasons why people choose not to use
more online public services:
i. A preference for face-to-face contact
ii. A broad unwillingness to provide personal information online
iii. Low awareness of some online public services
It states: “The Government has set out plans to help people not
on the internet to use digital services. Given the scale of ‘digital
exclusion’, the Government now needs to put these plans into
action to avoid a ‘them and us’ problem. Of those surveyed, 17
per cent did not use the internet and, of those, 72 per cent do
not intend to go online. Based on these numbers, departments
need to plan for around four million people in England who are
likely to need help in using online services. However, of those not
on the internet, 48 per cent receive help from friends and family
with internet access, a fact not recognised in the Government’s
approach to assisted digital services”.
28
The needs of these people are now coming to the forefront;
this year saw the Government modify its decision to provide
the Universal Credit system purely online. The phrase ‘digital
as appropriate’, as opposed to ‘digital by default’, is now being
used to describe the Universal Credit system.
29
“
Of those surveyed,
17 per cent did not
use the internet and,
of those, 72 per cent
do not intend to go
online. Based on these
numbers, departments
need to plan for around
four million people in
England who are likely
to need help in using
online services.
”
The National Audit Offce
18
WHAT STEPS MUST BE
TAKEN TO PROTECT
CONSUMER CHOICE?
Opinium’s research is clear that often when decisions are made
about customer communications, the business case is favoured
above consumer rights and preferences. To combat this, we are
asking all businesses to sign up to the Keep Me Posted pledge.
It is every consumer’s right to choose without penalty how they
are contacted by banks, utility companies and other service
providers. It is our aim to protect consumers from any form of
social or fnancial disadvantage arising from the withdrawal of
paper correspondence.
THE KEEP ME POSTED
RIGHT TO CHOOSE PLEDGE
We call upon organisations to sign the Keep Me Posted pledge,
acting quickly to put in measures that ensure that:
Ofer all of their customers the choice of receiving
information through paper correspondence as part of
any standard ofer
Refrain from penalising in any way, any customer
for preferring to receive information through paper
correspondence
Only cease the sending of information in paper
correspondence to a customer after (and not before) the
customer has specifcally, voluntarily and individually opted
out of receiving information on paper
Only change the frequency of information sent to
customers in paper correspondence after (and not before)
the customer has specifcally, voluntarily and individually
agreed to the change
Refrain from making the availability of online information to
customers necessarily conditional upon having to give up
their access to paper correspondence
Make available to customers easy mechanisms whereby
a customer who has chosen not to receive paper
correspondence can opt back in without penalty
“
It is every
consumer’s right to
choose without penalty
how they are contacted
by banks, utility
companies and other
service providers.
”
19
Only when the UK’s businesses and service providers put these
measures in place will consumers have free choice over how they
are communicated with.
We are also calling upon UK consumers to share their stories,
preferences and experience with the Keep Me Posted campaign,
to ensure that we are able to fully represent and fght for the
consumer point of view.
THE CAMPAIGN
Keep Me Posted is a partnership of representatives from
charities, consumer groups and business. We’ve come together
as we believe that we have a responsibility to fght for the
consumer’s right to choose.
We believe that it is every consumer’s right to choose, without
disadvantage, how they are contacted by banks and other
fnancial service companies, utility companies, media companies
and other service providers. Increasingly businesses are
restricting access to paper bills and statements and denying their
customers an informed choice.
Members of the Keep Me Posted campaign include: Mind,
the National Consumer Federation, The National Federation of
Occupational Pensioners, the Post Ofce, as well as UK postal
operators Royal Mail, TNT Post and UK Mail.
The campaign is funded by UK postal operators, Royal Mail, TNT
Post and UK Mail.
20
APPENDIX
THE METHODOLOGY
In the interest of ascertaining an accurate depiction of consumer
needs, the KMP campaign commissioned Opinium Research
to produce a defnitive research report which marries long-term
insight with up-to-date consumer polling. Opinium carried out
consumer research into mail preferences as well as analysing
the choices consumers are given across three sectors (fnancial
services, utilities and media) to opt in/out of receiving online and
paper transactional correspondence.
The consumer research included:
An online survey nationally representative panel of 2,000
UK adults conducted by Opinium in 2013
Face-to-face interviews with 997 adults (unweighted)
conducted by IPSOS Mori in 2012
Phone interviews from a pool of business customers plus
new large business contacts provided by Royal Mail’s retail
and wholesale team, conducted by Accent in 2012
Survey of a nationally representative online panel of
607 nationally representative adults conducted by
Insight Exchange in 2011
Telephone interviews with a random sample of 500 adults
carried out by Quadrangle in 2010
Sector-specifc research
The following paragraphs outline the questions researched within
each sector, the providers researched and, where relevant, the
reasons for these selections.
Methodology: Personal fnance
For the section on personal fnance, three diferent types of
providers were researched – frstly current account providers
comprised of both banks and building societies and, secondly,
credit card providers.
A total of 19 banks, fve building societies and 15 credit card
providers were researched, using a combination of desk research
and telephone calls to the organisations’ customer services
teams. The aim was to provide information on each of the
providers on the following parameters:
Default method for receiving account statements
21
Frequency of paper statements
Whether there is a charge for receiving paper statements
How easy it is to opt back into paper statements
Methods of getting in touch about account
changes/notifcations
Whether there is a charge for duplicate statement
How far back do online statements go
How easy would it be for banks to switch how they
communicate with their customers, without gaining
their consent
Sample of banks researched
for Current Accounts
Sample of banks researched
for Current Accounts
*
For all building societies their standard current accounts were investigated except for Yorkshire Building Society
where their ‘CashTransactor Account’ – which is similar to a standard current account – was examined.
Sample of Credit
Card Providers
Name of provider Type
Bank of Scotland Bank with High Street Branches
Barclays Bank Bank with High Street Branches
C. Hoare & Co Private Bank, no branch network
Card One Banking Online-only
Citibank Bank with High Street Branches
Co-operative Bank Bank with High Street Branches
First Direct Online-only
Halifax Bank with High Street Branches
HSBC Bank PLC Bank with High Street Branches
Lloyds TSB Bank with High Street Branches
M & S Bank Bank with High Street Branches
Metro Bank Bank with High Street Branches
National Westminster Bank (NatWest) Bank with High Street Branches
Royal Bank of Scotland Bank with High Street Branches
Santander Bank with High Street Branches
Secure Trust Bank Online-only
Think Money Online-only
Unity Trust bank Business Bank, no branches
Yorkshire Bank Bank with High Street Branches
Name of provider
Yorkshire Building Society *
Coventry Building Society
Britannia Building Society
Cumberland Building Society
Nationwide Building Society
Name of provider
Amex HSBC Post Ofce
Bank of Scotland Lloyds TSB RBS
Barclays M&S Santander
Capital one Nationwide Tesco
Halifax NatWest The Co-Operative
22
Methodology: Utilities
Desk research, complemented by telephone calls to each utility
company’s customer services team, was conducted amongst
16 utility companies to establish the following information:
Usual method for receiving account statements
Frequency of paper statements
Whether there is a charge for receiving paper statements
How easy to opt back into paper statements
Methods of getting in touch about account changes/
notifcations
Whether there is a charge for duplicate statement
How far back do online statements go
Whether customers are able to download an
application form
Whether they email terms and conditions
How customers are incentivised to switch from paper to
online bills
How easy would it be for utility companies to switch how
they communicate with their customers, without gaining
their consent
In terms of sample, the 15 utility companies that have been
researched include a mix of gas and electricity providers, and
water providers, as summarised in the table below.
Sample of banks researched for Current Accounts
Name of provider Type
Good Energy Gas & Electricity
Ecotricity Gas & Electricity
Thames Water Water
Anglian Water Water
Southern Water Water
The Co-operative Energy Gas & Electricity
Wessex Water Water
United Utilities Water
SSE Gas & Electricity
Eon Gas & Electricity
First Utility Gas & Electricity
British Gas Gas & Electricity
Scottish Power Gas & Electricity
EDF Energy Gas & Electricity
Npower Gas & Electricity
23
Methodology: Media
To quantify the current procedures in the media sector, desk
research, complemented by telephone calls to media companies’
customer services teams has been conducted amongst 10 media
companies. The following parameters were examined:
Usual method for receiving account statements
Frequency of paper statements
Whether there is a charge for receiving paper statements
How easy to opt back into paper statements
Methods of getting in touch about account changes/
notifcations
Whether there is a charge for duplicate statement
How far back do online statements go
Whether customers are able to download an
application form
Whether they email terms and conditions
How customers are incentivised to switch from paper to
online bills
How easy would it be for media companies to switch how
they communicate with their customers, without gaining
their consent
The table below provides a list of the 10 media companies
researched which provide a mix of landline telephone, mobile
phone, internet and television services.
Sample of media companies
Name of provider
BT Group
PlusNet (BT but separate business)
Virgin Media
Sky
TalkTalk Group
EE
Three
Post Ofce
O2 (being sold to Sky)
BE (being sold to Sky)
CONTACT US
To sign-up and for further
information about the
Keep Me Posted campaign:
Write to us:
Keep Me Posted
PO Box 72064
London EC4P 4DZ
Call or e-mail us:
020 7566 9773
[email protected]
Visit our website:
www.keepmeposteduk.com
Or follow us on Twitter:
@KeepMePostedUK
doc_325584061.pdf