Consumer Protection (Distance Selling Delivery Charges)

– in the House of Commons at 1:18 pm on 24th February 2016.

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Motion for leave to bring in a Bill (Standing Order No. 23)

Photo of Drew Hendry Drew Hendry Shadow SNP Westminster Group Leader (Transport) 1:22 pm, 24th February 2016

I beg to move,

That leave be given to bring in a Bill to require distance sellers to provide purchasers with a lowest available delivery cost option;
to introduce a scheme for a fair delivery quality mark for responsible retailers;
to establish penalties where vendors advertise free delivery but subsequently impose charges or conditions;
and for connected purposes.

I am grateful for the opportunity to bring in the Bill, for this is indeed an issue that my constituents deal with on a daily basis and tell me about regularly. I know that the Minister for Skills is aware of our concerns, and I am grateful to him for his engagement so far. There is consumer appetite for improved online shopping throughout our communities, but there are areas that are being badly served by some retailers and carriers. Online shopping is a growing market, and it is particularly important to rural communities, and paying more in rural areas—the highlands and islands, for example—is unfair.

We know that the costs of delivery will always vary, but that is not what this is about; this is about people feeling excluded because of a disproportionately narrow and costly range of delivery options. Even people living in cities such as Inverness are being charged punitive surcharges for the delivery of goods. One of my constituents was asked to pay £90 for the delivery of a mobile phone. Current legislation is not working.

I am grateful for the support of hon. Members from all the nations of the UK who have experienced similar issues. For example, 43% of consumers in Northern Ireland have encountered a delivery surcharge, and it is estimated that shoppers there can pay, on average, an additional £7.93 on top of standard UK delivery costs. For goods delivered to the highlands and islands, 53% of retailers apply a delivery surcharge and consumers have to pay, on average, an additional £14.71.

Unfairness is not only wrong; it is bad for business. Resentful customers are created when seven in 10 consumers reluctantly pay a surcharge for delivery of their item, and they will look elsewhere next time. There are those who will tell us that these are just market forces at work, but in this connected world it has already been accepted that there is a need for universal services in broadband provision, to allow everyone to participate. Why does that not extend to the product at the end of the process?

If all this seems like small beer to some people, it should be remembered that this type of injustice lives longest in the memory and the higher the price in loss of trust through disconnect. Because of their postcodes, people are considered to be in the minority, to be unimportant and to be left behind. Why should we allow that prejudice? Many are already asked to pay more for fuel and heating, and among them are often the more vulnerable consumers. That is why it needs to be our collective responsibility, when talking about the delivery of goods, to first deliver the principle of fairness.

Let us now shine a light on good retailers and carriers. The Bill calls for the introduction of a kitemark or quality mark. Many companies work hard to ensure that they provide a good service across our nations, and they should be celebrated and recognised. Highlighting their good practices will allow them to access and help those currently being discriminated against, and they in turn will benefit from increased business. The really good news for companies is that those consumers are proven to be exceptionally loyal, and they will buy again.

There is a reason why operators such as eBay have introduced a “premium seller” badge for their vendors: it makes good business sense. Indeed, the principles that eBay seeks to apply to its traders are very similar to those that I am proposing today for the wider market. A key part of eBay’s rating is based on delivery and shipping costs, and sellers lose their “premium seller” rating when they have poor feedback. In this example there is a consequence for poor behaviour.

However, the wider distance selling market has no such rewards, and there are no clearly understood consequences for bad practice, or indeed for mis-selling of delivery. The introduction of an industry-wide kitemark or quality mark will allow consumers easily to identify those traders and carriers that can be trusted. That can be industry-led. Of course it will need careful thought, but there are no barriers that cannot be overcome.

The Consumer Rights Act 2015 aimed to make consumer law clearer, but recent research has shown that a number of retailers are still unsure of their responsibilities. Greater awareness is needed to better support retailers. This is not an isolated problem. In preparing the Bill, I spoke with consumer groups, trading standards, retailers and couriers, and they all agree that there is a lack of clarity. Current legislation sets out that consumers should have

“upfront disclosure of pertinent delivery information at an early stage in the transaction process”.

But that is not happening. Seven in 10 consumers do try to seek out that information prior to checkout, but recent research by Citizens Advice Scotland and the Consumer Council for Northern Ireland has shown that some retailers are still not complying fully with new consumer legislation.

When vendors or delivery companies unfairly discriminate based on location, there needs to be a clear understanding of the rights of the consumers and the redress that they would have in relation to such unfairness and false adverting. Existing laws are often unenforced and are too cumbersome, so opportunities for administrative penalties need to be considered.

Of course, online retailers have the right to choose where they supply their goods or services, but consumers should also have the right to know before they get to the last page of their transaction what they will be charged. Up-front information should include prominent and transparent key contract terms, including the total price of the goods and services and all delivery charges, not misleading terms. For example, people are told that they can take advantage of free delivery within the UK when that is not true.

In the highlands and in my constituency there are many mysteries, such as the location of the Loch Ness monster, but the biggest mystery has to be why Inverness, one of the fastest growing cities in Europe, and towns such as Nairn are apparently not on the mainland, at least according to some couriers. People are not buying boxes to be sent to Brigadoon; they are asking for things to be sent to a modern city.

The discrimination test has been failed, sometimes unintentionally, but couriers can make the situation worse for retailers by using out-of-date postcode software. There is an inconsistent and variable approach by some retailers to the disclosure of delivery information, which can lead to confusion, shopping fatigue, cart abandonment and, ultimately, lost revenue for the retailers themselves.

There must be a greater understanding among consumers, retailers and couriers of their rights and of the consequences of bad practice. It is not just me saying that: organisations such as Citizens Advice Scotland are calling for greater intervention and education.

The Bill also sets out the need for greater consumer choice over delivery options. People often do not have choices. Again, why are people in the highlands and islands paying nearly £15 more for delivery when we have a universal Royal Mail service? They should have that as a clear option. Alternatively, they should be able to have goods sent to recognised collection points or to arrange pick-up directly from the vendor. The answer is simple: give the consumer the right to choose.

As a former retailer, I know that that will mean a change in working practices, but barriers can always be overcome, and that will result in better business. Companies make adjustments all the time to improve, and I am sure that exciting new business opportunities could be explored, including the use of delivery brokers or working with other companies to maximise potential.

In introducing the Bill, we offer to work with the Government, business and others to establish change and to provide not just yet another set of promises, but a set of solutions. Let us recognise the good work of fair retailers and delivery companies through a kitemark. Let us make sure that there is clarity about the expectations in current legislation, and let us consider the option of administrative penalties for continued abuse. We should give consumers the choice over delivery and let them decide whether they want the universal service.

There are challenges, but let us decide to support those who find themselves in the position I have described. They are not asking for the unattainable. They do not expect to be treated with undue favour. They should not continue to be ignored. They deserve to be listened to. This is the time to extend inclusion and end exclusion. We have the opportunity here, with this Bill, to take action.

Question put and agreed to.

Ordered,

That Drew Hendry, Brendan O’Hara, Gavin Robinson, Caroline Lucas, Dr Paul Monaghan, Mark Durkan, Mr Angus Brendan MacNeil, Patricia Gibson, Ian Blackford, Mike Weir, Hywel Williams and Chris Law present the Bill.

Drew Hendry accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 11 March, and to be printed (Bill 140).