Introduction
As we all buy or use goods and services, everyone in Scotland is a consumer - so we are all at risk of experiencing consumer detriment. Consumer detriment happens when a problem or issue occurs with goods and services we have bought or used such as the item or service being of low quality, faulty, over-priced or not delivered satisfactorily. When detriment occurs, it can cause stress, or cost us money or time.
Consumer Scotland recently looked at different data sources to identify the level and nature of detriment in Scotland to help government, regulators, advice and enforcement bodies identify where action should be targeted to help to reduce consumer harm. We considered which consumers are most likely to experience detriment, what this detriment looks like and what happens when consumers try to resolve their issues.[1] We have published a briefing setting out our findings in full, but this blog highlights one key insight for each of these three questions.
Overall, around 7 in 10 consumers in Scotland experienced detriment in the year up to April 2021 (the most recent data available), resulting in 18.6 million detriment incidents. Looking at this in financial terms, these incidents cost consumers in Scotland a total of £4.7 billion. While detriment levels vary across sectors and over time, the sale of second-hand vehicles is the market with the highest levels of consumer detriment. Other sectors with high detriment rates are internet provision, electronics, clothing, energy provision, and public transport.
Which consumers are most likely to experience detriment?
Younger people are more at risk of poor outcomes than other groups. Consumers aged 18 to 39 or even 45, depending on how age groups are divided per study, are:
- more likely to experience detriment
- least likely to take action to address this
- more likely to report suffering negative impacts on their wellbeing and their finances
Altogether, this means younger consumers as a group are disproportionately affected and the cumulative impact of these aspects can be profound.
Socio-economic factors also play a role, as those consumers who are finding it very difficult to get by financially are also more likely to say they have experienced detriment.
It is concerning that those who can least afford to waste money or to invest in obtaining a resolution are the most prone to experiencing consumer detriment and this merits further attention from policy makers.
How are consumers impacted by detriment?
Aside from the cost to money and time, a key finding from our analysis is that there is a negative impact on a consumer’s health and wellbeing in half of cases where detriment has occurred.
In sectors covering essential services or personal care, such as renting a home or care for an adult or a child, detriment is more likely to cause a negative impact on a consumer’s mental health. It is not difficult to understand that tenants living in poor quality housing, for example with ongoing damp issues, have reported impacts on both their mental and physical wellbeing.[2]
While some research into mental health impacts of consumer detriment has been undertaken, it would be beneficial for policy makers to develop a deeper understanding of the knock-on effects and the long-term consequences for consumers of such experiences – particularly where these may be cumulative across different markets and services.
When they experience detriment, what do consumers do?
While 8 out of 10 consumers take some action to resolve the issues they experience, the most common reason for not doing so is that they think their problem is not serious enough. The prospect of spending hours on the phone to an internet provider for a drop in connection, or taking a bus into town to return an item of low monetary value, might cause some consumers to decide this would merely increase the detriment they have already experienced. It is also worth noting that poor customer service can itself be a source of detriment, and a potential deterrent to consumers taking action.
A key insight from our analysis is that whether and how consumers take action to resolve detriment is dependent on their own circumstances (age, disposable income) and on the type of goods or service they purchased. For example, consumers appear to be more likely to complain about detriment to their telecoms provider than to their landlord.
Understanding why consumers make these choices and to what extent these are dependent on awareness of their options, may be useful for policy makers in determining where support is most needed.
What more we can learn
Our study provides useful insight into the detriment consumers in Scotland experience. However, it would be beneficial to continue to build the evidence base on the relevance of consumers socio-economic circumstances, the impact of detriment on consumers’ health and wellbeing and why consumers appear to take different paths to find a resolution.
Areas for future research include:
- the impact of factors such as household income and education which could provide more insight into which consumers are most likely to experience detriment
- the cumulative impacts of detriment on consumers to provide greater insight on the effect it has on wellbeing
- consumer awareness of and access to information around their rights and how they can resolve detriment to help identify how consumers can be supported to resolve issues more easily and effectively
Consumer Scotland will continue to work with others to help identify how consumer detriment can be minimised and how consumers in Scotland can be supported to resolve issues more easily and effectively.
Footnotes
[1] Our research largely examined results from the Consumer Protection Study 2022 and the Public Attitudes Tracker on Consumer Issues, as well as a number of other reports and insights, mostly from the period between April 2020 and December 2023. For a rounded view, we also looked at consumer advice data provided by Advice Direct Scotland and Citizens Advice Scotland.
[2] The Joseph Rowntree Foundation and the Resolution Foundation have published some research on the wellbeing impact, and this is an area that would benefit from further insights so that consumer harm might be minimised.