Consumer Detriment Study 2014
The Competition and Consumer Protection Commission (CCPC) has published the results of a study conducted on their behalf by Ipsos MRBI, which quantifies the level of detriment experienced by consumers in Ireland. Consumer detriment is a measure of the loss experienced by consumers where they have cause to complain about a product or service. The study examined the number and the range of problems across the whole economy, and also within specific sectors. It is the first time that a study of this size and scope has been conducted in Ireland.
Key findings
A nationally representative sample of 2,504 respondents were surveyed and the analysis of the results show that 44% of Irish consumers reported that they experienced a problem following the purchase of a product or service in the previous 12 months. The study shows that the overall financial detriment experienced by consumers in this period amounts to almost €500m.
Speaking about the study Isolde Goggin, Chair of the CCPC said, “Consumer detriment has been studied and quantified by many organisations across the world. However, until now, there hasn’t been a large scale exploration of the subject in Ireland. The insights revealed in this study together with the intelligence we gain from consumers who contact our helpline and from our other sources of information give us an economy-wide understanding of the problems faced by consumers in Ireland and an evidence base for future prioritisation.”
Respondents were asked about their experiences of purchasing across 12 main product categories (78 subcategories). The results showed that problems are most likely to be experienced with Internet, TV or Telecommunications, with 16% experiencing a problem within this category. This was followed by Financial Goods/Services at 7%, Personal Electronic Goods at 6% and Household Goods/Services at 6%.
In terms of financial loss, problems with Household Goods/Services and Internet, TV & Telecommunications are the largest contributors to detriment, accounting for 25% and 21% of the total detriment amount respectively. Just under half (47%) of the problems with goods or services incurred no financial detriment, while 5% incurred financial detriment of more than €750.
The study also looked at the amount of time it costs consumers to manage problems, 11% of them required 10 hours or more of personal time, while 34% required personal time of between 2-10 hours.
The study also highlighted that consumers aged between 35-44 had a higher than average experience of detriment (50%) and females (47%) were more likely to experience detriment than males (43%).
In terms of the types of problems encountered by consumers, 58% of consumers reported that they had experienced a problem with a “Product or Service Fault/Defection.” This figure was significantly higher than the next main problem type, “Cost/Pricing Issues”, at 14%. 13% of consumers surveyed reported “False/Misleading/Incorrect Sales Issues” and 7% have had “Financial Product/Service Issues” and “Refund Issues” respectively.
Consumer behaviour in response to detriment
The results of the study show that two thirds (67%) of consumers took some action in pursuit of the problems they encountered, with the most common actions being a complaint to the company (48%); looking for a replacement (30%); looking for a refund (25%). Of the problems encountered in the past 12 months, consumers reported that 39% had been completely resolved, but 46% were not resolved in any way.
Commenting on the results, Ms Goggin said “The study shows that the majority of consumers took action when they encountered a problem but a large proportion of them remain unresolved. Consumers should know that the CCPC has a consumer helpline (1890 432 432) and website which provides information to help them assert their rights, make informed decisions and know what options they have if things go wrong.”
Ms Goggin concluded by saying, “The mission of the CCPC is to make markets work better, but in order for us to do this and target our resources most effectively we must know what experiences consumers are having and the areas where they are encountering problems. The results of this study build significantly on our existing understanding by highlighting not only the areas where consumers have problems but also the cost in money and time, as well as the actions taken and the outcomes. This will help us to allocate our resources to those areas most in need of our attention and our focus will be on mitigating the greatest amount of detriment over the long term.
Notes
The research was carried out by Ipsos MRBI during May and June 2014 via a bespoke face-to- face survey of a nationally representative sample of 2,504 respondents. Respondents were asked about their experiences when purchasing goods and services in the previous 12 month period and the loss to them, financially and in terms of time, where any problems were encountered. The results of this study build significantly on our existing understanding by highlighting not only the areas where consumers have problems but also the cost in money and time, as well as the actions taken and the outcomes.
Overall financial detriment experienced by consumers in this period amounts to almost €500m (€495,069,150).
