Consumer vulnerability

Inadequate consumer protection
Unprotected consumers
Unwary customers

Nature

Consumers are vulnerable to practices such as: inaccurate use of weights and measures; use of dangerous additives and preservatives in foodstuffs; lack of control of insecticides, pesticides and drug pre-testing; unsafe products (for example, unsafe toys, tyres, television sets and inflammable carpeting); fraudulent and misleading advertising; meaningless product guarantees and warranties; inadequate servicing and complaint handling facilities; inadequate indication of product quality, characteristics and degree of safety; lack of impartial testing services to evaluate and publicize the performance of competing products; uncontested price increases. The range of 'products' consumers can be abused on are: private goods such as cooking stoves; environmental goods like air and water systems; public services such as health or defence; government services in law making; tax-gathering and administration; and moral 'goods', for example the principle of protecting workers' health.

Background

Consumer vulnerability emerged as a global concern in the late 20th century, as international organizations and advocacy groups highlighted how certain populations faced disproportionate risks in the marketplace. Landmark studies in the 1980s and 1990s, such as those by the OECD and Consumers International, documented widespread exploitation and exclusion. Growing digitalization and complex financial products have since intensified scrutiny, prompting regulatory responses and ongoing research into the evolving nature of consumer disadvantage worldwide.

Incidence

Consumer vulnerability is a pervasive issue affecting millions globally, with heightened incidence among the elderly, low-income groups, and those with limited digital literacy. The proliferation of complex financial products, aggressive marketing, and digital marketplaces has increased the risk of exploitation and misinformation, particularly in developing economies and marginalized communities. Regulatory bodies worldwide report rising complaints related to unfair practices, misleading advertising, and data misuse, underscoring the widespread and persistent nature of consumer vulnerability.
In 2023, the United Kingdom’s Financial Conduct Authority identified a significant surge in scams targeting vulnerable consumers, particularly through online investment fraud. Many victims, including pensioners, suffered substantial financial losses due to misleading digital advertisements and fraudulent platforms.

Claim

Since the completion of the common market in 1968, the free movement of goods and services in the EEC/EU means that 340 million consumers can choose from the broadest range of goods and services available anywhere in the world. This does not necessarily mean that consumers have been well-protected, informed and organized. Oversupply in a highly competitive market means increasingly that protective measures have to be taken to ensure uniform standards. This has the unfortunate by-product of overreaching cultural norms, reducing consumer responsibility and encouraging vendor malpractice in unregulated situations.

Counter-claim

Consumer vulnerability is vastly overstated and not an important problem. In today’s information-rich world, consumers have unprecedented access to reviews, regulations, and protections. Most people are capable of making informed choices, and businesses are incentivized to treat customers fairly. Focusing on “vulnerability” distracts from personal responsibility and undermines consumer intelligence. The market naturally weeds out bad actors, making additional concern over consumer vulnerability unnecessary and exaggerated.