Can consumers trust business?

I have very limited trust in large companies because so many of them have let me down in one way or other. I acknowledge that other aspects of their business may be satisfactory. Much of what we discuss on Which? Conversation relates to problems we – as consumers – have with companies.

In contrast, I have a much more positive view of small companies, even one-man businesses. I can phone them and usually speak to someone I know and get useful advice and none of pushing up prices annually in the hope that you will not object. Obviously small companies have their limitations and I probably would not use one for a major job or purchase.

Our large companies should be setting a better example. It might be better if there were more medium sized companies and fewer global multinational concerns that sometimes seem to walk over the consumer.

Sorry Malcolm. That was not intended as a reply to your post.

I agree with the comment about global companies, who get far too much power. Coca Cola and McDonalds taking over the Olympics, Starbucks and Costa driving out small cafes, News International (Murdoch) influencing governments, and such like. This is a very unhealthy situation from what are hardly essential businesses. Oh, and flouting the principles of taxation. No, I don’t trust them one inch (cm).

Perhaps we should use this Conversation to suggest how businesses could build our trust. Some of us are already avoiding the companies you mention, Malcolm.

That’s a fine provocative post, Dieseltaylor. It implies that a conventional business is unlikely to be able to operate without exploiting its customers, unless perhaps this might happen as a result of competition with other businesses. I hope it is not nearly as bad as you suggest, but over the past ten or fifteen years I have lost a lot of trust in larger companies and reading the term ‘reputable company’ sometimes makes me wince. Perhaps the biggest factor is that the public is much better informed about wrongdoing thanks to improved communication.

Perhaps sites like Wikiedia are useful at making the public aware of general criticism of companies. From memory, neither Nestle or Barclays have enviable records.

If a supermarket wants my custom, I need to know that their food is safe and wholesome, for an insurance company to keep me, they should not inflate the renewal premium in the hope of me not noticing, and so on. I want to see honest marketing, not misrepresentation carefully contrived so as not quite to fall foul of the Advertising Standards Authority. Having said that, I value true competition and have little doubt that this does help the consumer.

John, I agree that it is fanciful, in the real world, to expect business not to put their own interests first. They exist to make a profit, in a world where this is not easy – because of competition. So you need to innovate in all sorts of ways – product, service, marketing, sales, investment – to survive. We need to discuss these topics against what is real, not a world that we might like to be.

Having said that we must not say “do we trust businesses” but “do we mistrust some businesses” because to demonise all business as untrustworthy is quite wrong. Many businesses do treat customers well, in a fair and trustworthy way, because that is in their commercial interests at least, and probably in their ethos as well. Remember businesses are made up of many of us – they are not some abstract entities. And do customers always treat businesses fairly?

I hope that we all accept that companies exist to make a profit. They need to invest in future developments. Perhaps executive salaries are a good indicator that all is well. I recently sent an email to the published email address for the CEO of M&S. I looked up his name and found that his salary is around £1m, possibly plus perks. From memory, Tesco pays their CEO even more. Even if the salary bill remained unchanged, I would like to the money distributed more fairly to their lower paid staff.

I will have more respect when executive salaries become more sensible but they seem to be going down the track beaten by professional footballers.

I have just had a printing job done by a small local retailer that I have used for years. I realised that neither I or the others that had read the final draft had noticed a duplicated word near the start. My printer had already made the plates and was about to run off thousands of copies. He offered to start again and he has not charged an extra penny above the original quote, despite the fact that the error was entirely mine. I wonder if a large business would have done the same. That’s my idea of a business I can trust, though whether they will trust me in future is another question.

My daughter sent us some roses from M&S for our anniversary. We said how nice they were, arriving in a box and sealed in two packs to keep them fresh. She had assumed they would arrive as a bouquet – as the website illustration. She emailed M&S simply to comment on this. She was immediately offered a full refund or another delivery of roses.

Let’s be careful not to be completely cynical about large businesses.

I wonder how many large businesses have executives that do not receive grand salaries, paid for by consumers. That would help me be less cynical.

I take your point about competition on price, Dieseltaylor. Other forms of competition, for example on innovation, can be better, though there is the risk of a proliferation of products with marginal changes and pointless features.

I have spent some time looking at ethicalconsumer.org and from snippets of information I can be sure of, I don’t think their information is up to date and may be flawed in other ways. Many people will buy on price, so to improve standards, the best solution is to impose requirements on manufacturers and make sure that these are complied with.

Which? could help by encouraging us to ask ourselves if we really need to replace our car, freezer or washing machine. Manufacturers and retailers encourage us to do so, but does the expenditure really make sense either on financial or environmental grounds?

I share your concerns about goods that lack durability and repairability but so long as the retailer rather than the manufacturer is legally responsible for these problems, I see little chance of progress.

wavechange, as I see it the retailer is responsible as you have a contract with them, where legality is concerned. So they are your point of contact. They, in turn, should have an appropriate arrangement with their supplier or manufacturer. I would not want to have to deal with an overseas manufacturer where English law does not apply. We just need to strengthen the ability of consumers to deal with unhelpful retailers.

The economy depends on us buying things we don’t need – mobile phones updated every year, car changed every couple of years.

Basic standards for safety are imposed on manufacturers. Performance standards are rarely issued unless they also impact on safety. This is where we need information on which we can base a judgement – Which? in the case of the wise subscribers.

Malcolm – The retailer is indeed legally responsible for the goods it sells but can we trust retailers? Recall the report about the poor performance of John Lewis, generally regarded as one of the better ones, over claims under the Sale of Goods Act. This is one of the reasons why I’m pushing for longer manufacturers’ warranties, so that the manufacturer does have a responsibility for the durability of goods it produces.

Manufacturers have not always been good at issuing safety recalls. Recall the Suzuki MPVs that were prone to roll over and the Volvos that could run away when the handbrake was on, both of which I learned about thanks to Which?

Dealing with unhelpful retailers is simply not enough and I’ve seen precious little evidence that much has been achieved in this respect in recent years.

I agree that there is no need to buy new cars every couple of years, and if all you want to do with a phone is to make the occasional call, a nine year old Nokia is ideal. If you do want to make use of the full potential of these powerful ultra-portable computers, then you need a recent model. Many older people become ‘nonsumers’ to a greater or lesser extent as they get older, for various reasons ignoring the efforts of the marketing men. I am quite happy to carry on using household goods that are still doing all I need, long after others would have thrown them away.

wavechange, I’ve commented elswhere about the “can we trust” approach. Some retailers – no – but others yes. The law is there to protect both consumers’ interests and those of retailers (can wer trust consumers? Let’s not go there! 🙂 )

There is no sign of a mass introduction of appropriate length warranties .Let’s keep pursuing that target though. Meanwhile we must deal with the world as it is. If that means pursuing our rights through SoGA then we should – but we need help from consumer associations to do it – both legally and with information on durability. I wish Which? would start a campaign to do this.

We can agree that trust is needed on both sides. When I post comments relating to Sale of Goods Act claims, I try to remember to say that it excludes abuse, and of course there is no cover for reasonable wear and tear.

I am seeing an increasing number of ‘free’ manufacturers’ and retailers’ extended warranties and if we can persuade consumers to look for these longer warranties, we could see more. Once again I ask Which? to tell us the length of the standard warranty for each product it tests. Any warranty promotions are then a bonus.

I’ve just ordered a new laptop from John Lewis, because they are offering a three year guarantee, whereas the manufacturer and most retailers offer only one year’s cover. If asked for feedback I will make it quite clear that the warranty was why I chose John Lewis.

Two friends have bought Hyundai cars because of the five year warranty. Decent warranties are one of the ways that companies can engender trust.

Malcolm – What we need is people being paid reasonably for a fair day’s work, rather than silly salaries. Getting rid of unproductive staff or ones that don’t meet the grade has always been difficult, irrespective of sector. Short-term contracts can help but I have seen too many young people forced to quit good jobs on short-term contracts. History documents those entrepreneurs who looked after their workforce.

Not having worked in industry, I cannot relate to profit sharing schemes, etc., but if this works it is surprising it is not universal.

I cannot comment about the high salaries in the public sector. My own experience has almost exclusively been with the lower paid staff working for the local council, and I have generally been very impressed. Looking at those public sector staff in the public eye, I very much share your concerns.

I imagine most people relate their own achievement to salary but I question whether we should focus so much on money. I did countless hours of unpaid overtime because my job was rewarding (well much of it was). As far as I am aware, this would be an alien concept in business.

The footballer analogy is an interesting one as the skills can be seen and appreciated very quickly. The actual performance of the individual himself is being rated not him as a leader of the team.

Therefore I like the analogy for its falsity.

We can then look at businesses and realise that in fact the cult of the leader and the huge bonuses is not a very robust matter. Fortunately its is an area much studied by management gurus and academics – though the headhunters and many Boards seem to work on the basis of that old business saying ” nobody gets fired for buying IBM [equipment]”

This may be a relevant place to air my theory that the growth of Which? has been much aided by the downturn in the economy making people more cautious, but primarily the arrival of the Internet, and particularly the smartphone has made the information previously only available on paper much more accessible. The same old product has become much more useful than previously.

Also the cost of providing it has dropped significantly and the research costs are spread much more widely

Being in the right place at the right time therefore is perhaps one explanation why companies can perform better other than simply superior management.

Neutron Jack is an example of the good and bad where the stock markets view of a company tends to be the one remembered see wikipedia.org/wiki/Jack_Welch.

Just to give a flavour of the company that grew under Welch:
” In December 2011, the non-partisan organization Public Campaign criticized General Electric for spending $84.35 million on lobbying and not paying any taxes during 2008–2010, instead getting $4.7 billion in tax rebates, despite making a profit of $10.4 billion, laying off 4,168 workers since 2008, and increasing executive pay by 27% to $75.9 million in 2010 for the top 5 executives.[64]

Between March 1990 and February 2001, General Electric was fined or ordered to pay damages by a court 42 times, amounting to at least $934,027,215, according to a report from the Multinational Monitor.[66]” Wikipedia

wavechange, “As far as I am aware, this would be an alien concept in business.” I have concluded this is all down to the attitude of the individual. I worked in industry and enjoyed my work and regularly put in extra time, travelled when you work 16 hours a day, because I was interested in my job – technical and design. My children have, fortunately (I think), similar attitudes. Work occupies a large part of your life, so make it as rewarding as possible.

But some others I and they have worked with treat a job as an entitlement, work the minimum and are reluctant to put themselves out. I understand their attitude (although I don’t sympathise) but feel they miss out. Certainly, though, there are jobs where there is no potential interest, just a means of earning a living.

So no, it is not alien to business and I suspect peoples’ attitudes to work are no different in the public and academic sectors – it is down to the individual.

From what you have mentioned before, I am not surprised to find that you enjoyed your job, Malcolm. My father was a civil servant and often worked at home. I think it was the satisfaction of doing a good job and setting an example for others that provided the encouragement. As Dieseltaylor says, there is not the opportunity for everyone to do this. Schoolteachers often work at home, sometimes because they enjoy their job but often because that is the only way to cope – which is simply not acceptable.

That makes interesting reading Dieseltaylor. Perhaps we should be comparing the effective hourly rates of the highest and lowest earners in different companies. That could help show which companies are being run by the greediest executives.

Some of these high salaries are just becoming silly.

Well done for France. I somehow doubt that this will happen in the UK because our government is too much under the control of industry. I would be interested in what excuses would be given for not following France.

I am still convinced that the best way forward is to push for decent guarantees, which will push up the quality of products because manufacturers will not want to pay for repairs. If the manufacturers produce better products, consumers will trust them more.

I suspect this French statement reiterates EU law which has a minimum 2 year protection. However, my belief is this is the equivalent of the protection offered by the UK Sale of Goods Act which gives us Brits 6 years proterction in law (5 if you are in Scotland). If that is correct we are 3 times better than the French, thanks to our government 😀 . I might be wrong 🙁

Malcolm – As I have said before, the Sale of Goods Act is not fit for its purpose. What percentage of people make successful claims when goods are more than a few months outside warranty? Those that do will probably be given a modest discount on a new product. As Kenneth Watt explained to us during our discussion about washing machines, the Sale of Goods Act is not going to help us much.

If the EU legislation is effectively a two year guarantee then that looks like a step forward, though it appears that there is still the provision to offer paltry discount on a new product instead of a repair.

wavechange, legislation can only help if it is used. We need help to use it – information that will help support durability claims and guidance on its use, and to hold retailers who don’t fulfil their obligations to account. There is nothing else available once your manufacturer’s warranty has expired. I believe the European “guarantee” is simply a version of SoGA – with the same requirements, except it does not last as long. Great if we had extended manufacturers’ warranties, but we have not, and don’t expect those to come without some restrictions.

I want Which? and other consumer organisations to focus their attention on improving consumer protection, using existing law and campaigning for better protection. I would rather they got this fundamental problem at the top of their job list even at the expense of tackling some of their other activities – they have limited resources and should use them as effectively as possible.

Meanwhile “not fit for purpose” is misleading. The law is there for retailers to be held to; if we don’t use it then I do not see how you can blame legislation – no more than saying there is a law against thieving but people still steal. 🙂

Have a look at the longer warranties offered by manufacturers and retailers, Malcolm. The ones I have looked at seem fair, bearing in mind that they need to be a balance between protecting the consumer and protecting the manufacturer or retailer against unfair claims.

If you can provide me with evidence that the majority of people are achieving satisfaction with fair claims under the Sale of Goods Act, then I will withdraw my statement. Until then, it’s not fit for its purpose in my view. It’s still standard practice for retailers to deny customers their legal rights after the warranty has expired.

Have a look at this video by Which? https://www.youtube.com/watch?v=8GGBVehqNcY

Perhaps Which? could raise awareness of the Sale of Goods Act using a dramatic introduction followed by the important message.

I don’t think Which? will ever feature in viral videos but I see a strong case for raising the profile.

wavechange, I am all in favour of proper longer warranties but they will come at a cost. You cannot expect a 10 year guarantee not to incur some cost for the manufacturer or retailer, and the consumer will pay that in the product cost. I would be happy with that if it was a fair cost to get peace of mind. But car warranties for example seemed to have stalled, with few longer than 3 years – not good on such an expensive product. Are Which? and European consumer groups strenuously campaigning for significantly longer warranties? I’ve seen no sign of it but it is one campaign I would actively support.

In the meantime our only protection out of warranty lies with the law. As I said above we need help and encouragement to use this legislation – or the threat of it – to pursue valid claims. Consumer organisations should do much, much more to help consumers to get what is their legal right. If consumers don’t know about SoGA, or its features, then they won’t use it. Which? is in a position to provide this encouragement and help. I don’t know why it seemingly hangs back here. Some supported cases might start to promote confidence.

I would expect to pay a bit more for a longer warranty but nothing like the cost of paying for a separate extended warranty.

Vauxhall now offer a lifetime 100,000 miles warranty for the purchaser of their vehicles, and the conditions seem fair. I have ordered an Apple laptop from John Lewis and it will cost about £40 less and have two extra years cover compared with buying it direct.

According to Which:
“26 October 2013
A quarter of Which? members have made a claim under the Sale of Goods Act with a success rate of 88%, a new Which? survey has found.”

We have had many similar experiences at new housing developments. Given the price of any new-build home today the quality of presentation is deplorable. Your description of the sales rep is accurate. They have been brain-washed and indoctrinated to pitch their spiel in that robotic monosyllabic style with barely a trace of recognition that they are trying to initiate one of the most important events in people’s lives. They might as well be selling Marmite.The prospective purchasers they are addressing are looking for confidence, reassurance, and trust as well as sensible answers to essential questions. These automata certainly know how to make themselves appear to be the most important person in the room. It’s good to walk away but it doesn’t solve the home-buying problem; now you’ve got to start all over again somewhere else.