The number of people missing a credit card or loan payment in the UK is estimated to have almost doubled in just a month, new Which? research has revealed.
The consumer champion warns scaled back financial support measures may not be sufficient to protect consumers in financial difficulty.
The latest findings from Which?’s consumer insight tracker reveal that approximately 370,000 more people defaulted on a credit card or loan in October than in September, with the estimated number rising from 410,000 to 780,000. This is the sharpest rise in missed payments of this type since the start of the pandemic.
Overall, 5.8 per cent of respondents to the Which? survey reported that their household had defaulted on at least one housing, credit card, loan or bill payment in October. This was a significant increase from September’s figure of 3.8 per cent, and was driven by the increase in defaults on credit cards and loan repayments.
A missed payment is an indicator of significant financial difficulty, and the large spike is highly concerning as it comes as the financial regulator reduces the level of support given to people who are in financial difficulty on 31 October – the same date that the government’s Job Retention Scheme also finishes.
With the Bank of England predicting that unemployment is expected to rise to around 7.5 per cent by the end of the year, and debt advice charity StepChange seeing 13,000 people seeking debt advice for the first time in August alone, Which? is concerned that the Financial Conduct Authority’s scaled back measures will not be enough to tackle the looming challenge to the financial wellbeing of huge numbers of people.
The FCA initially responded rapidly to the coronavirus outbreak, working with the banking industry to introduce a range of financial assistance measures – including payment holidays for mortgages and other forms of credit for those who are struggling financially as a result of the pandemic.
Which? has been warning since August about the need to prepare robust plans to help people through the winter months, after its research indicated that furloughed workers are three times more likely to have defaulted on at least one payment in the previous month. The consumer champion subsequently called for an extension of existing support measures until the start of next year.
However, the FCA has since announced that, from 1 November, lenders will be required to carry out assessments of individual circumstances in order to provide support, rather than consumers being able to self-report their financial difficulty.
Which? has serious concerns about the industry’s capacity to handle a potential deluge of requests for urgent assistance.
Recent research from the consumer champion found that 22 per cent of mortgage holders had contacted, or attempted to contact, their lender since the start of the pandemic and 61 per cent of those requested a payment holiday.
Worryingly, more than half (56%) reported having a problem doing this – with issues including long call wait times, and no responses to email or phone messages.
While it will always be better for a customer who can afford to continue to make payments towards their credit card or loan payments to do so, these figures suggest many people are struggling financially and will need support from their lender.
The consumer champion fears that the additional requirement to assess people’s personal circumstances could create a significant backlog with firms who are having to deal with consumers needing financial support as their payment holidays come to an end, and an additional influx of people seeking help after the government’s job retention scheme finishes on 31 October.
Which? does not want to see consumers denied support altogether, or facing delays that mean they are unable to access help before missing a payment. It believes the regulator should be prepared to move quickly to reintroduce measures similar to the original support if the industry struggles to cope with demand.
Which? is also opposed to a return of normal reporting of financial support on consumer credit files, as this risks pushing large numbers of people facing temporary financial hardship into long-term difficulties.
Currently, payment holidays are not marked on credit files as it has been acknowledged that these are exceptional circumstances. However after 31 October, if a lender offers a payment holiday or agrees an arrangement with a consumer to make reduced payments, these will be reported as missed payments.
Which? believes it is not fair to penalise customers who fall into financial difficulty at this stage of the pandemic through no fault of their own, when people who needed help at the start were able to take payment holidays without facing the same consequences.
Gareth Shaw, Head of Money at Which?, said: “This significant increase in missed payments is a warning sign that large numbers of people could be on the brink of really struggling financially, and it reinforces our concerns about the impact of the government, regulators and industry rolling back vital support.
“There is a real risk that the additional hurdles customers face could mean help is delayed, or impossible to access at all – which could leave many facing serious debt problems.
“Firms need to be proactive and flexible with people who need urgent help, and if there is evidence that customers can’t get the support they need quickly enough, the regulator must be prepared to introduce stronger measures.”
Which? is urging manufacturers and retailers to up their game on face coverings after the consumer champion’s lab tests revealed alarming differences in the effectiveness of widely-available reusable masks.
Which? found that the best performing face coverings were able to block more than 99 per cent of potentially harmful bacterial particles from penetrating the mask material – similar to the standard of surgical masks.
But the worst only managed to filter out a paltry 7 per cent – allowing up to 93 per cent to escape.
With face coverings now an essential purchase and considered important for minimising the spread of coronavirus, Which?’s latest research looked at a range of popular brands and styles of face coverings and masks, including those sold by pharmacy chains, supermarkets, high street stores and online retailers.
Scientists tested for how well they filter bacteria, how breathable they are, and how they fare after multiple washes.
Three out of the 15 face coverings Which? tested performed so poorly that they were deemed a ‘Don’t Buy’. At the bottom of the table and earning the lowest scores overall were a face covering from Termini8 sold at Lloyds Pharmacy (£2), one from Asda (£3) and one from Etiquette (£3), which is sold at Superdrug.
All were lightweight and breathable as they were made with only one layer, but this affected their ability to filter potentially harmful particles, earning each mask only one star out of five in this category.
Which? awarded two of the products tested Best Buy status. The NEQI reusable face mask (£15 for 3), which is available from retailers including Boots and Ocado as well as Bags of Ethics Great British Designer face coverings (£15 for 3), available at Asos and John Lewis, were both considered comfortably breathable, earning the full five stars in this category without compromising on filtration (four stars out of five).
The lab tests revealed that masks with multiple layers are much more effective than single layer masks at filtering particles. However, Which? found that there was a clear trade off between breathability and how effective the mask was at filtering potentially harmful particles. In fact, the fabric masks that scored five out of five for filtration were also those that scored the lowest for breathability.
These included the Firebox reusable mask (£15), which is made with double-layered polyester and uses a double filter, Maskie Loop UV Sanitized reusable Face Mask (£6), which is made of three layers, and the Smart Mask (£14), which is also made of three layers and markets itself as the number one rated face mask in the UK, which all got one star for breathability. The AB Mask (£10), which is available at Boots, also received full marks for filtration but got two stars for breathability.
If a face covering isn’t breathable, it can get damp more quickly with condensation from trapped breath and might encourage people to adjust or remove their mask, especially if they wear glasses.
The Asos (£12) and AB Mask were the only two that avoided glasses steaming up and were rated highest for glasses-wearers’ comfort, with both scoring five stars in this category.
The Which? tests also revealed that almost all of the face coverings got better at filtering particles after being washed. Face coverings were re-tested after five hot wash cycles, and most improved, due to the fibres compressing.
While reusable fabric face coverings are not designed to block ultra-fine particles such as Covid-19 like a higher-grade medical respirator mask would, they are intended to help block larger droplets and aerosols breathed out by the wearer, who may be infected but asymptomatic.
The prevailing scientific thinking is that this should help protect the wider community by minimising exhalation of virus particles in enclosed public spaces.
Which? is urging manufacturers to use these findings as a basis for improving their products, while retailers should seek to ensure they are selling products that will effectively filter out potentially harmful particles. In the meantime, the consumer champion is encouraging consumers to research the best available options for themselves and their loved ones before making a purchase.
Natalie Hitchins, Which? Head of Home Products and Services, said:“With face coverings now such an important part of daily life, they not only need to be durable and comfortable, but also provide effective filtration from harmful particles in order to keep us and others safe.
“Our results prove that there is a huge difference in quality between reusable masks sold in stores around the country and online. We would urge manufacturers to use our findings to up their game and improve their products – until then it is worth taking time to research the best option for yourself and your loved ones.”
Shoppers now looking for a small TV are being left disappointed by sets that consistently fail to deliver the sound, picture and capabilities of bigger and more expensive rivals, with the drop in quality so significant that Which? can no longer recommend buying one.
The consumer champion tests hundreds of TVs each year, but has not given a positive review to a TV of 32 inches or less since 2014 – despite giving around 200 sets the Which? Best Buy accolade in that time.
The average Which? test score on a 32-inch TV is a measly 49 per cent. In fact, the best TV of this size recently tested only scored 55 per cent with problems ranging from poor sound quality to inadequate motion capture and a slow operating system.
Which? testing has found that while a smaller TV might capture detail, they are more likely to struggle with motion. As 32-inch televisions do not have 4K capability, manufacturers have been putting more of their efforts into making bigger TVs and home cinema set-ups.
Manufacturers also release fewer 32-inch sets now than they did several years ago. Sometimes their range will only include one, and they are always inferior to bigger televisions. The most popular size of TV with visitors to the Which? TV reviews site is now 49 inches.
Which? also found that small television sets can have a shrill and unpleasant sound quality due to a lack of bass. Operating systems also suffer, with fewer apps available and weaker processors that cause menus to be slower when channel surfing or loading TV guides.
On average, Which? found that people keep their television sets for just over six years, meaning many people who bought a decent quality small TV when they were still available in 2014 may be in for a nasty shock if they try to buy a new 32-inch of similar quality.
To get a great viewing experience, the best TV size depends on how far people sit from their TV. In a survey of Which? members, almost 9 in 10 (86%) people were not sitting at the right distance to make the most of their TV.
The problem is those sitting too far away lose detail and the picture is not as crisp as intended, while colours lose their lustre and the screen starts to look washed out. Those sitting too close will struggle to capture the whole image and the TV will be uncomfortable to watch.
Which? found a 55-inch set would provide the best viewing experience for the average-sized British living room. For those wanting smaller sets the smallest current Which? Best Buy is 48 inches and there are sets as small as 43 inches that still get a decent rating.
While a large set might not be suitable in every space, rather than resorting to buying a small (and poorer quality) TV, Which? has found that some consumers might be better served by streaming TV onto other devices that they already own, such as laptops and tablets. Good quality devices may offer a better level of detail and motion capture on a smaller screen.
For the average living room, demand for a home cinema style set up is likely to continue to grow with the pandemic accelerating this trend. The rise of 4K (and even 8K) means that while Which? experts will continue to include small sets in testing, they believe that 32-inch TVs, for now, are unlikely to make a comeback.
However, with so many people not wanting their television to dominate their space, there will always be demand for smaller sets – so Which? expects manufacturers to do a better job of producing quality products for as long as people want them.
Natalie Hitchins, Which? Head of Home Products and Services, said:“When it comes to TVs, size definitely matters – bigger models score consistently better in Which? testing but while smaller TVs are in much less demand than they used to be, there still appears to be a gap in the market for small sets that really pack a punch.
“Our advice to shoppers is to choose a larger TV that they can comfortably view, where possible. For small or occasional spaces, streaming content on a laptop or tablet may just offer a better experience than a small TV.”
*Energy Price Cap extended until end of 2021, protecting around 11 million UK households from being overcharged
*households on standard variable and default energy tariffs will continue to save between £75 and £100 a year on dual fuel bills
*2.8 million electricity and 2.1 million gas customers switched supplier in the first six months of 2020
Around 11 million households across the UK will be protected from being overcharged on their energy bills thanks to an extension to the government’s Energy Price Cap until the end of next year.
The Energy Price Cap shields those least likely to shop around for the best deals – including the elderly and most vulnerable – from being charged excessive prices.
Since its introduction in January 2019, the cap has saved customers around £1 billion a year, equivalent to around £75-100 a year for typical households on default energy tariffs.
An additional 4 million households with prepayment meters on default tariffs will also come under the protection of the cap from January.
Business and Energy Secretary Alok Sharma said: The Energy Price Cap has been vital in ensuring customers do not pay too much on their bills, which is why we are keeping it in place for at least another year.
“Switching energy supplier to find the best value deals is still the best way to save on bills, but this government is determined to make sure all customers are treated fairly and get the protection they deserve.”
In addition to the price cap, millions of customers have been able to benefit from lower bills as the numbers of those switching to cheaper tariffs has increased and the rollout of smart meters has progressed in recent years.
A total of 2.8 million electricity and 2.1 million gas customers switched supplier in the first 6 months of 2020, building on record numbers of households switching to cheaper tariffs in 2019, the first full year of the Energy Price Cap.
However, more than half of customers are still on standard variable or default tariffs, where, in the absence of the cap, they would likely still be paying excessive charges for energy use.
In August, the independent energy regulator, Ofgem, recommended an extension to the cap following a review into the market. Today’s announcement follows that recommendation.
The Energy Price Cap extension is the latest government measure to help vulnerable customers with their energy bills and follows particular support during the coronavirus pandemic.
Energy suppliers have given prepayment and pay-as-you-go customers support when they faced financial distress.
Those with prepayment meters have also benefited from a price cap that is in place until the end of the year.
Today’s announcement means a further 4 million households with prepayment meters on default tariffs will continue to be protected from excessive prices by the wider Energy Price Cap once the Competition and Market Authority’s Prepayment Meter Cap expires at the end of 2020.
Jonathan Brearley, Chief Executive of Ofgem, said: The Secretary of State’s announcement means that 15 million households will continue to be protected under the price cap and will pay a fair price for their energy in 2021.
“Although those protected by the cap are paying a fair price, they can also reduce their energy bills further by shopping around for a better deal.
“Ofgem will continue to protect consumers in the difficult months ahead as we work with industry and government to build a greener, fairer energy system.”
Natalie Hitchins, Head of Home Products and Services at Which?, said:“With energy bills expected to rise and tighter coronavirus restrictions returning to many parts of the country, it is good to see the regulator taking steps to protect vulnerable customers and ensure they can stay warm this winter.
“Anyone facing financial difficulty or struggling to pay their energy bills should speak to their provider about what support may be available to them. Households could also potentially save themselves hundreds of pounds a year by switching to a provider offering a cheaper deal and possibly better customer service.”
Customers looking for cheaper energy deals can compare deals with Which? Switch, a transparent and impartial way to compare energy tariffs and find the best gas and electricity supplier for you.
Which? calculates that a medium user (using 12,000kWh gas and 2,900kWh electricity per year) on a dual-fuel default tariff at the level of the current price cap could save up to £221 by switching to the cheapest deal on the market. Based on widely-available tariffs available across England, Scotland and Wales, paying by monthly direct debit, with paperless bills. Data is from Energylinx and correct on 13 October 2020.
Social media users are seriously underestimating their chances of falling victim to online fraud and suffering devastating emotional and financial consequences because tech giants are not doing enough to warn and protect them, Which? is warning.
The consumer champion’s latest research using an online community of Facebook users showed that a majority were lulled into a false sense of security by the platform’s social nature. They mistakenly assumed they could spot fraud and that the company’s systems would protect them effectively.
However Which? found a third of participants did not know that fake products might be advertised on the site – putting them at risk of falling victim to purchase scams. A quarter did not spot an investment scam advert with a fake endorsement from a celebrity.
If this was to be replicated across Facebook’s user base of 44 million Britons, huge numbers of users could potentially be at risk from fraudsters who lure in victims with fake accounts, posts and paid-for ads on the site.
The financial consequences for those tricked by these fraudsters as well as those who post scam adverts on websites and search engines like Google can be devastating.
Which? has heard from many victims of these types of scams – including a man who lost almost £100,000 after clicking on an online investment advert featuring fake endorsements from MoneySavingExpert’s Martin Lewis and Deborah Meaden from BBC show Dragons’ Den.
The emotional consequences are equally serious. Scam victims told Which? that it had shaken their confidence in themselves and their ability to trust other people. A woman who lost £30,000 to an investment scam which featured prominently on Google said she still feels shame and despair 15 months on from her ordeal, adding: “It breaks you as a person.”
Which? is calling on the Department for Digital, Culture, Media and Sport (DCMS) to act now and include online scams in the upcoming Online Harms Bill so that consumers are protected from this huge and growing problem.
Which? carried out in-depth research with an online community of Facebook users over 10 days, and also conducted a nationally representative online survey including 1,700 Facebook users, as part of its new policy report ‘Connecting the world to fraudsters? Protecting social media users from scams’.
The research found that older social media users are often more concerned about scams, and perceived as being at greater risk by their fellow users. But the findings suggested that younger people may actually be more susceptible to scams as they are more persuadable and more likely to take risks, such as taking part in online shopping and quizzes used by some fraudsters.
Knowledge among users of what Facebook does to protect people from becoming a victim of a scam was low, although users assumed Facebook did have systems and processes in place. However, when details of Facebook’s actual systems and processes were explained, users were sceptical about their effectiveness and questioned whether they are sufficient.
Just three in 10 (30%) respondents to Which?’s online survey of Facebook users said they were aware of the scam ad reporting tool introduced by the site in 2019. Only a third of these, 10 per cent overall, said they had used the tool themselves.
Which?’s research was conducted with a focus on Facebook due to its size and influence in the social media landscape. However, the consumer champion believes that the findings and implications of this research can be reasonably extended to apply to other similar social networking sites and online platforms.
The amount of money lost to fraud every year is huge. In the year to June 2020, Action Fraud received 822,276 fraud reports, and the value of losses from reported incidents was £2.3 billion. Action Fraud estimates that 85 per cent of all fraud in the year to June 2020 was carried out digitally.
Which? spoke to one man, retired and in his seventies, who lost almost £100,000 to a Bitcoin scam, which started in February 2019, by a company called Fibonetix. He had seen an online advert which had fake endorsements from celebrities including MoneySavingExpert’s Martin Lewis and businesswoman Deborah Meaden.
The man, who preferred to remain anonymous, told Which?: “Being scammed in this way was utterly devastating. I think about it virtually every day and it’s really affected my confidence, my ability to make decisions and has ultimately changed the person that I am. Fortunately I have been able to get through it with the support of my family.”
Another victim, a sound engineer in her forties, was searching for investment advice on Google and ended up filling in contact details with a firm that seemed legitimate. Receiving a phone call a few days later she then ended up falling victim to an incredibly sophisticated scam, which took place over several weeks, and lost £30,000. Her case is currently being investigated by the Financial Ombudsman Service.
She says the experience has impacted her mental and physical health and that “it’s been really traumatic. At the time it felt like no one cared or wanted to discuss my case with me. It breaks you as a human being and leaves you scared of the outside world.”
Despite it happening 15 months ago she says: “It’s still hard to trust yourself and others. Often people think these things only happen to older people and it takes a long time to not feel like an idiot. There’s a lot of shame and despair which hasn’t gone away and I’m still awaiting closure to this day.”
Which? is calling for online platforms, including social media sites, to be given greater responsibility to prevent scam content appearing on their platforms.
The government has a perfect opportunity to deliver this in the upcoming online harms bill, and if not ministers must set out their proposals for further legislative action to effectively protect consumers from online scams.
Rocio Concha, Director of Policy and Advocacy at Which?, said:“The financial and emotional toll of scams can be devastating and it is clear that social media firms such as Facebook are failing to step up and properly protect users from fraudsters on their sites.
“The time for serious action on online scams is now. If the government doesn’t grasp the opportunity to deliver this in the upcoming online harms bill, it must urgently come forward with new proposals to stem the growing tide of sophisticated scams by criminals online.”
An estimated £97.7 million was lost on shopping vouchers that went unused during lockdown, according to new Which? research.
The consumer champion found a quarter (25%) of UK adults had a shopping voucher – worth £45 on average – that expired during the period when many shops and businesses were forced to close their doors.
Almost half (49%) of those with an expiring voucher said it was automatically extended by the retailer, while one in seven (15%) said they had to request an extension.
However, just over a third (36%) – an estimated 3.1 million – did not receive an extension on their shopping vouchers worth £30 on average, automatically losing all the money they had left. This equates to an estimated £97.7 million across the whole of the UK.
Those from an older demographic were more likely to lose money, with almost half (46%) of those aged over 55 claiming they did not receive an extension for their shopping vouchers.
Around two in five (42%) of those aged 35-54 did not receive an extension either, however this figure dropped to just one in five (20%) of those aged 18-35.
According to the Gift Card and Voucher Association, the gift card industry is worth £6 billion every year.
Many retailers introduced new Covid-19 terms and conditions during lockdown and offered to extend vouchers. While some proactively reached out to customers, others were not so helpful.
One person told Which? they had emailed a retailer regarding vouchers that were due to expire during lockdown, and received a swift response extending the voucher, while another said they were left “disappointed” when they contacted the company who told them “hard luck, basically”.
Which? is advising anyone who had a voucher that expired during lockdown to contact the company to try and get an extension. All retailers should also be reasonable and extend vouchers that customers were not able to use during lockdown.
Anyone considering buying shopping vouchers should be wary, as coronavirus has had a severe financial impact on many retailers – with some big names disappearing from the high street altogether. The possibility of further coronavirus lockdown restrictions in the near future could also make it difficult to spend vouchers.
Adam French, Which? Consumer Rights Expert, said:“Our research suggests consumers may have lost tens of millions of pounds on expired vouchers during lockdown.
“Many retailers have extended shopping vouchers that expired during lockdown, so if you have a voucher you were unable to use it is worth contacting the company.
“Anyone considering buying a voucher should be aware of the risks, as some well-known retailers have collapsed in recent months and further coronavirus restrictions could make it difficult to spend vouchers and gift cards.”
Two-thirds of branded grocery packaging not fully recyclable
Crisps, chocolate and cheese are among the worst foods for packaging recyclability, with brands including Pringles, Cadbury and Babybel failing to do their bit for the environment, a new Which? investigation has revealed.
The consumer champion analysed 89 of the UK’s best-selling branded groceries and found only a third (34%) had packaging that was fully recyclable in household collections. To make matters worse, around four in 10 (41%) items had no labelling to show if they could be recycled, leaving consumers none the wiser about how to dispose of them.
Which? looked at 10 different categories of items including popular brands of chocolate, fizzy drinks, crisps, yoghurts, drinks, cheese, bread loaves and cereals. Which? experts broke down each item’s packaging into its component parts, weighed them and assessed whether each piece could be easily recycled.
The recyclability of different types of groceries varied hugely. The worst category by some distance was crisps, with only three per cent of packaging recyclable in household collections. This included Pringles and their notoriously hard to recycle combined material tube.
The tube’s plastic lid made it the only product in the category to have at least one component that was recyclable in household recycling. However it wasn’t labelled to say so and the tube design is far heavier than any other packaging in this category – so it would take more energy to transport.
The best of a bad lot in this category was a Quavers multipack. None of the individual packets of crisps were easily recyclable, but the outer bag, at least, was recyclable at supermarket collection points. However it wasn’t labelled to say so, meaning consumers could mistakenly throw it out with everyday rubbish.
While significantly better than bagged snacks, when Which? took apart and analysed cheese packaging it found that a third (34%) was not easily recyclable. Snack packs of Cathedral City and Babybel were packaged in plastic net bags, which are not only difficult to recycle but can also cause problems if they get caught up in the recycling machines accidentally.
Cheestrings were also found to be problematic, with packaging that was not recyclable in household collections.
At the other end of the spectrum, packaging for Dairylea Cheese Triangles, Seriously Spreadable Cheese and Laughing Cow triangles was all recyclable – but all had this important information missing from their labels at the time of testing. Philadelphia Soft White Cheese’s packaging is recyclable and was correctly labelled.
Among the chocolate snacks Which? looked at, almost a third of packaging was not recyclable. Favourites like four finger KitKats, Cadbury Bitsa Wispa, M&Ms, Cadbury Dairy Milk bars and Cadbury Twirl Bites were all found to not be recyclable in household recycling at all.
The Galaxy Smooth bar had 100 per cent recyclable packaging, but due to a lack of labelling risked being thrown out in the same way as its less eco-friendly counterparts.
None of the bread packaging Which? looked at was recyclable in household collections. But it was recyclable if taken to supermarket collection points alongside plastic bags. All of it was labelled.
The most recyclable category was fizzy drinks, which were found to be 100 per cent recyclable. All 10 items Which? looked at in this category were correctly labelled.
Juice drinks were mainly recyclable in household collections, with the exception of Ocean Spray and Capri-Sun. Ocean Spray cartons are like Pringles tubes in that they are made of mixed materials that make them difficult to recycle in household collections, while Capri-Sun’s foil pouches are not recyclable.
In a separate survey, Which? found that the recyclability of grocery packaging is important to eight in 10 respondents (79%), and two thirds (67%) often or always look for recycling info on grocery packaging before deciding how to dispose of it.
Some brands are trialling more environmentally sound options. Pringles is testing a new recycled paper tube at several UK Tesco stores, which if successful could be pushed out more widely.
In response to Which?’s findings, some manufacturers said that food waste had a larger carbon footprint than plastic waste and claimed that moving away from traditional packaging to recyclable alternatives could lead to compromised, stale or damaged food. Some also said that their packaging was recyclable at TerraCycle collection points.
But Which? believes that a lack of consistency and hugely varied approaches to grocery packaging shows that some manufacturers could be doing a lot more to ensure the materials used to package their products do not end up in landfill.
The responsible use of the right materials to package food is just one part of the problem. In order to tackle unnecessary waste, products also need to be correctly labelled with clear instructions of how packaging should be disposed of.
The recurring inconsistencies Which? has found on the way groceries are labelled when it comes to recyclability shows how confusing it is to navigate for even for the most environmentally conscious consumers.
Which? is calling on the government to make recycling labelling simple, clear and mandatory, so that all consumers are able to make informed decisions when buying groceries.
Natalie Hitchins, Which? Head of Home Products and Services, said:“Consumers are crying out for brands that take sustainability seriously and products that are easy to recycle, but for any real difference to be made to the environment, manufacturers need to maximise their use of recyclable and recycled materials and ensure products are correctly labelled.
“To reduce the waste that goes to landfill, the government must make labelling mandatory, simple and clear, enabling shoppers to know exactly how to dispose of the packaging on the products they consume.”
Which? is calling for enforcement of tough penalties for firms that fail to prevent data breaches, as new research from the consumer champion reveals the shocking scale of data theft following cyberattacks.
When data breaches occur, opportunistic fraudsters can then go on to buy stolen information such as passwords or credit card and bank details, as well as using other personal details to pose more convincingly as victims’ banks and other trusted organisations.
Now worryingly a new Which? survey suggests that these problems are rampant – revealing that almost half (46%) of people whose data was stolen by hackers then went on to experience fraud.
This was out of around a quarter (23%) of 1,369 Which? members who said they’d had their data compromised following a breach involving a company or organisation.
Which? also heard from people who said that they’d not only lost money but seen their mental health impacted in the aftermath of being involved in a data breach. These victims have also struggled to get any form of redress from the companies that failed to protect their personal data.
Jamie, a British Airways customer, had his trip of a lifetime ruined when he became one of the 500,000 customers whose names, email addresses and card details were stolen by cybercriminals. When he arrived for his holiday in Thailand he found that RBS had frozen his account, saying there had been a lot of suspicious activity including someone attempting to take £15,000 from his account, and Nationwide had also blocked his debit card.
Jamie said he suffered immense stress at the time and two years on he is still fighting to get compensation back from BA for his ruined holiday, he has even joined a group action claim against the airline, but is yet to receive any redress.
BA told Which?: “At the time, we notified all potentially affected customers as quickly as possible, advising them to contact their bank or card provider as a precaution.
“We confirmed that any customers who suffered direct financial losses as a result of the attack would be reimbursed, and offered credit rating monitoring, provided by specialists in the field, to any affected customer who was concerned about an impact to their credit rating.
“This was a unique case which we investigated at the time and could find no evidence that the fraud was attributable to the cyber-attack. A response to the relevant customer’s concerns was provided at the time.
“To date, we have identified no verified cases of fraud as a result of the attack.”
Which? has also heard from an easyJet customer who was disappointed that even though the company became aware of a huge data breach in January 2020, the airline said that it was only able to start informing customers in April.
Brendan, an easyJet customer, told Which? that he received a suspicious looking email from the company in June. “It looked like a standard easyJet email, but the links wouldn’t work, which I found strange. It also said, ‘you’ve cancelled your holiday to Spain’, which wasn’t true.” EasyJet had in fact cancelled Brendan’s holiday prior to this email.
Unsure whether the email was fraudulent, particularly given the many scammers looking to take advantage of the Covid-19 pandemic, Brendan tweeted easyJet but didn’t receive a response.
EasyJet later confirmed to Which? the email was genuine. However, it did not make an effort to resolve this with Brendan at the time, who felt let down by the response given the huge data breach the airline had experienced. Even though easyJet became aware of the breach in January 2020, it didn’t start to inform customers until April.
Brendan said. “It’s taken no responsibility. I’m worried that my data is out there, possibly being passed around on the dark web.”
He would rather have asked for a refund, instead of rebooking, if he had known there was a data breach. He added: “I’ve become overly cautious and it’s caused a lot of disruption. Here’s a business we’ve freely given our information to and the security issues are really concerning.”
He feels the airline has taken no responsibility and is worried his data is out there, possibly being traded by criminals on the dark web.
This year has seen some huge data breaches take place. EasyJet told around 9 million customers that their data had been compromised in a breach. Marriott also hit the headlines for losing around 5.2 million people’s contact and personal information – announcing its second data breach in three years.
And more recently the cyberattack on software company Blackbaud has left students and charity donors concerned their records have fallen into the hands of criminals.
EasyJetresponded: “We are sorry that the customer’s tweet about an email regarding their holiday was not responded to. This was as a result of human error and is not the level of service we expect for our customers.
“The email the customer tweeted about was an automatically generated email from easyJet holidays in response to the customer’s request to cancel their holiday. Our team has now been in touch with this customer to reassure them that the email he received was genuine and not fraudulent.
“At easyJet we take the safety and security of our customers’ information very seriously. As soon as we were able to do so, we notified and provided support to the small number of customers whose payment card data was compromised, offering them complimentary 12-month membership to an identity monitoring service.
“Out of an abundance of caution, we also sent phishing alert emails to approximately 9 million customers and have provided support to them via a dedicated customer service team. Our customer experience continues to be a key priority and our wider IT transformation strategy focuses on optimising that experience.
“The nature of the attack meant that it took time for easyJet to identify whether, and if so to what extent, personal data had been affected. We could only inform relevant customers once the investigation had progressed enough that we were able to identify whether any individuals potentially been affected, then who had been affected or potentially affected, and what information had been accessed or potentially accessed.
“It is, of course, regrettable that this cyber-attack took place, but it does not mean that easyJet was at fault or that customers are entitled to compensation under the compensation provisions set out in the General Data Protection Regulation.”
As part of its investigation, Which? also asked its members to submit their email addresses to haveibeenpwned.com, a website that tells you if your email address has been involved in a data breach.
Which? had 515 members take part, submitting a total of 610 email addresses. It was revealed that 79 per cent had experienced at least one breach. Of those, the average number of breaches per email address was 3.7. One address had been in 19 breaches.
Despite all of this, the ramifications for firms that fail to protect their customers’ data are limited. The ICO announced its intention to fine BA £183 million for its 2018 breach and Marriott just under £100 million for losing around 339 million guest records. However, the deadlines to issue the fines were extended and both companies are expected to appeal. The IAG Group, which owns BA, released a report in June, estimating the fine would be €22 million.
Currently victims have limited options to seek redress when data breaches occur. Although under GDPR consumers have a right to claim compensation if they have suffered damage as a result of an organisation breaking data protection law, doing so isn’t always easy. The ICO advises victims to take independent legal advice and to try to settle with the organisation first. If this fails, victims may be able to make a court claim – either independently or through a group action claim, where claimants join together to seek redress.
Which? is calling for the ICO to actually issue intended fines when organisations breach data protection law, otherwise firms may continue to treat customers, and their sensitive personal data, with disregard.
Which? also wants the government to implement provisions in the GDPR to allow not-for-profit organisations to bring collective redress action on behalf of consumers for breaches of data protection rules – without them having to opt-in to a group case or bring the case themselves.
This would help to support and enforce the rights of consumers, making it easier for victims of data breaches to secure adequate redress, and create further incentives for businesses to improve their data processing mechanisms.
Jenny Ross, Which? Money Editor, said:“Whether we’re shopping online, booking a holiday or signing up to a new mobile phone contract, we have to trust the companies we deal with to protect our details – and if things go wrong we need to know that businesses are held to account.
“We need the ICO to be a regulator with teeth that is prepared to step in and issue fines in the event of companies breaking data protection laws, to ensure more businesses better protect consumers from data breaches.
“Consumers should also have a much clearer route to redress when they suffer the financial and emotional toll of data breaches – and that’s why the government must allow for an opt-out collective redress regime that deals with mass data breaches.”
Further details on opt-out collective redress action
The government has the power to facilitate better redress by implementing Article 80(2) GDPR in its upcoming review of the Data Protection Act 2018. This would then allow not-for-profit organisations such as Which? to bring collective redress actions on behalf of people on an ‘opt- out’ basis, without those consumers each having to bring – or to appoint a representative body to bring – an individual case against the company involved.
A properly implemented redress system would ensure that people could trust that harm suffered as a result of data breaches would be remedied and would simultaneously act as an incentive for companies to improve their data handling processes – resulting in fewer breaches.
DCMS is consulting on the operation of the ‘representative’ action provisions of the Data Protection Act 2018.
Which? advice to consumers on protecting their data
Password manager – Many services now alert you if your passwords have been compromised. As services such as Lastpass and Dashlane can be used for free, there’s no reason not to use a password manager.
Two factor/multi-factor authentication (2FA/MFA) – Wherever possible turn on 2FA/MFA to increase security, particularly if your account holds your financial information. Don’t use SMS but use an authenticator app or even a hardware token if possible.
Credit card details – Don’t save your credit card details if you aren’t going to use the service regularly. Although it’s a faff to resubmit them, that’s better than having your financial information unnecessarily stored in a database that could be compromised.
Guest checkout – Similarly to the above, just checkout as a guest if you aren’t going to use the service that often. Only create an account if you really need to.
The Financial Conduct Authority (FCA) has confirmed the support mortgage borrowers will receive if they continue to face payment difficulties due to coronavirus.
The FCA has published additional guidance for firms, to ensure that consumers who have benefitted from payment deferrals under the current guidance who still face financial difficulties, as well as those whose financial situation may be newly affected by coronavirus after the current guidance ends, continue to get the support they need.
The measures mean firms will offer further short and longer-term support reflecting the circumstances of their customers. This could include extending the repayment term or restructuring of the mortgage. Where consumers need further short-term support, firms can continue to offer arrangements for no or reduced payments for a specified period to give customers time to get back on track. This additional guidance will come into force on 16 September 2020.
Christopher Woolard, Interim Chief Executive at the FCA, said: “Some consumers will continue to be impacted by coronavirus in the coming months, or be impacted for the first time. Consumers in these situations will benefit from firms providing them with tailored support.
“However, it is very important that consumers who can afford to resume mortgage payments should do so for their own long-term interests and so that help can be targeted at those most in need.”
Under the guidance published today, firms will prioritise support for borrowers who are at most risk of harm, or who face the greatest financial difficulties. The new guidance reinforces the need for firms to deliver outcomes that are right for individual borrowers rather than adopting “one size fits all” solutions. The FCA will be monitoring firms to ensure borrowers are treated fairly having regard to their individual circumstances.
Firms will also signpost borrowers to the support they need in managing their finances, including through self-help and money guidance, or refer borrowers to organisations that can provide free debt advice if this meets their needs and circumstances.
Where borrowers have taken, or are taking, payment deferrals under our existing guidance and require further support from lenders these further arrangements can be reflected on credit files in accordance with normal reporting processes. This also applies to borrowers newly affected by coronavirus who receive support from their lender after 31 October.
This will help to ensure that lenders have an accurate picture of consumers’ financial circumstances and reduce the risk of unaffordable lending. Firms are required to be clear about the credit file implications of any forms of support offered to borrowers.
The FCA’s current guidance published in June will continue to provide support for those impacted by coronavirus until 31 October 2020 – with consumers able to take a first or second three-month payment deferral until this date.
The June guidance is due to expire on 31 October and we do not intend to extend this guidance. The guidance published today ensures consumers will still be able to obtain the support they need from their lenders after their payment holiday ends or they are newly affected by coronavirus after 31 October.
Gareth Shaw, Head of Money at Which?, said:“While the FCA has announced some support for certain customers who will struggle financially after the current support period ends, it is disappointing that payment deferrals will no longer be available in the same way.
“We are also concerned about the impact of allowing normal credit reference agency reporting to resume even where consumers fall into temporary difficulty. It is unfair that consumers who have not yet had a deferral but may need support after the furlough scheme ends will feel the effects longer-term.
“Lenders should ensure that people can easily access the support they need and not shy away from offering a range of support options. They must be clear with customers about how any arrangements, such as payment deferrals, will be marked on their credit file.”
Car hire insurance sold by rental companies can be up to 14 times more expensive and provides worse cover than policies bought online, according to new research from Which?.
The consumer champion compared the cost of car hire insurance policies from major car rental companies with top-rated independent insurance policies that can be bought online, for a week’s hire in Malaga, Spain.
The most expensive policy was from Europcar, costing £203 a week. By comparison, the cheapest top-rated policy from a major online provider was from Chew Insurance, and cost just £14 a week – a saving of £189.
The research found that, on average, the six biggest car hire firms charge £147 for a week’s insurance, while the six top-rated independent insurance policies sold online cost just £23 on average.
The lowest price from a car hire company that Which? found, for a week’s insurance in Spain, was from Enterprise at £115. Avis, Alamo, Europcar, Goldcar and Hertz’s policies were all more expensive.
Additionally, all of the more expensive policies offered by the car hire insurance firms provide inferior cover to the top-rated independent insurance policies. Which? insurance experts gave the top six independent providers a policy score ranging from 75 per cent to 82 per cent. When car rental firms’ policies were rated, the highest scoring policies received a mediocre 61 per cent.
The best car hire insurance included cover for damage to a car’s tyres, windscreen and underbody, flat battery cover, admin charges, car-jacking, towing cover, personal accident cover, among other features.
Questor Insurance, which received the top policy score of 82 per cent, charged just £24 for a week’s insurance in Spain. Questor offered cover for misfuelling, getting locked out, and lost or damaged keys. Despite costing £179 more, Europcar didn’t offer any of this cover as part of its policy.
The policies sold by major car hire companies contained a significant number of exclusions. Examples of incidences where a driver wouldn’t be covered include if an Avis customer had a stone chip their windscreen, if an Alamo customer got a flat tyre, or if a Hertz customer got locked out of their rental.
As well as offering cover for these accidents, the top-rated independent policies also offer cover for drivers who get locked out of the car, if they accidentally put the wrong type of fuel in the car, or are forced to cut short their hire. They also offer cover (usually up to £300) for any personal items that are stolen from the car. None of the more expensive policies from the car rental firms cover all of these incidents.
The only disadvantage of taking out an independent policy is that customers would still have any charges deducted from their credit card by the hire company, having to claim them back from their insurance afterwards.
As car hire has become an increasingly competitive market, the price of rental has dropped as low as £1 per day in some cases, meaning car hire companies often make their money from the sale of extras.
Which? has previously exposed car hire companies using pressure selling tactics to persuade customers to pay for these extras. Last year, Which? caught Europcar’s budget arm, Goldcar, on camera lying to and bullying customers into buying expensive cover.
Additionally, one in four (26%) Which? readers in the consumer champion’s most recent car hire survey said they were stung with unexpected charges, and a quarter of those who paid extra, ended up forking out an additional £200 or more.
While cover bought online can be significantly cheaper than policies bought from a car rental firm, Which? is also reminding holidaymakers looking for car hire insurance not to be swayed by the lowest price available online. Not all policies available online from independent providers are worth it, so always check the terms of the policy and the cover on offer before buying.
Rory Boland, Editor of Which? Travel, said:“Car hire is an industry plagued with unscrupulous practices, with wildly excessive charges for sub-standard insurance policies just one of the pitfalls customers should be wary of when choosing a rental company.
“The good news is that, no matter how a car hire salesperson may try and persuade you at the desk, you don’t have to fork out for one of these eye-wateringly expensive policies. Much more thorough cover is available online for a fraction of the cost, meaning you can enjoy your holiday with peace of mind that you’ll be covered if something goes wrong with your rental.”
