The Competition and Markets Authority has recently published research about consumer detriment across the main consumer markets in the UK. It builds on a larger research exercise in 2024.
What is "consumer detriment"?
Consumer detriment is the harm or loss that a consumer experiences when they purchase goods or services that do not meet their expectations. It can be personal to a particular consumer, or structural. Examples include:
- Poor quality products or services;
- Faulty, unsafe or broken products;
- Delivery issues/late provision;
- Complete failure to provide goods or services;
- Price charged more than advertised;
- Not provided with all relevant information before purchasing;
- Unclear or unfair terms and conditions; and
- Guarantee or warranty not honoured.
Who has suffered consumer detriment?
According to the reports, in the 12 months to April/May 2024, an estimated 72% of consumers in the UK had experienced consumer detriment. This is about 38.5 million UK consumers. These figures have risen slightly since 2021, when the percentage experiencing detriment was 69%.
The demographics most likely to suffer detriment are young and elderly people, people who perceive themselves to be hard up, and those with long-term health conditions as well as people with English as a second language. People were also more likely to suffer detriment from services, rather than goods.
The reports also considered whether the channel a consumer uses affects if they are more likely to suffer consumer detriment and found that it does. There are more likely to be problems if consumers buy online from the seller or retailer's website or app, followed by in-person from a shop or other outlet and, thirdly, online from a third-party marketplace website or app.
Interestingly, detriment caused by auto-renewal was low (3%) in absolute terms but was concentrated in the same three sectors – internet services, energy and mobile phones. This shows that the absolute numbers don't necessarily reflect the impact on consumers or the financial detriment, which can be higher in certain circumstances.
The report also indicates the sectors in which there is an upwards trend in incidences of detriment since the last study. The largest increase was in the public transport and rail sector, with groceries and drinks also showing a significant increase.
What do consumers do when they are unhappy with their purchase or experience?
Consumers were least likely to take remedial action for purchases made via social media, and most likely to for those made online from a website where private individuals sell to each other, online from a provider's website or app, or online from a third-party marketplace website or app.
The update report also considers the relationship between consumers' experiences of detriment and inflation but did not find strong evidence for a statistically significant relationship between sector inflation and consumer detriment. However, it does say that inflationary pressures can shape both actual and perceived consumer experiences.
Why does this matter?
The studies are likely to inform CMA decision-making. The Digital Markets, Competition and Consumers (DMCC) Act takes a broad view of "vulnerable" consumers, and so the CMA may consider those consumers who are more likely to suffer consumer detriment to be vulnerable. In addition, the studies may inform the sectors and harm that the CMA looks at with its new enhanced consumer enforcement powers which it has received from the DMCC Act.
The UK government has recently published the final version of its "strategic steer" to the CMA. It renews the focus on prioritising growth and investment while ensuring free and fair competition and protecting the rights of consumers. The last of these is relevant in this context and understanding where consumer detriment arises will help the CMA to protect consumers' rights more effectively.
See our Consumer Law Hub for more information on the DMCC Act and the latest consumer law insights, news and events.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
