Customer Service Standards: An Important Part of an Effective Consumer Protection Strategy A Presentation by Dr. Kernag

1. Customer Service Standards: An Important Part of an Effective Consumer Protection Strategy A Presentation byDr. Kernaghan WebbChair/Convenor, ISO 10001 and ISO 10003 Customer Satisfaction Codes and dispute resolution standards Speaking at BSI-CPI Service Standards for Consumers Workshop The Hatton, London June 20, 2008

2. Organization of presentation Basic message Effective consumer protection: the big picture Positioning standards in the consumer protection regime Standards and the 3 phases of the consumer transaction Key standards: BS 8463, BS 8477, ISO 10001, ISO 10002, ISO 10003, ISO/CD 10004 Focus on ISO 10001, ISO 10002, ISO 10003: how they work, possible applications Conclusions

3. Basic message Surveys show widespread consumer dissatisfaction BSI /ISO standards represent potentially important “building blocks” of broader consumer protection strategies Particularly useful for service contexts (reduces consumer unknowns), with both domestic and cross border applications Can anticipate and address consumer expectations Firms use standards to maintain or enhance customer satisfaction and to reduce likelihood of legal liability As products of multi-stakeholder consensus processes, they represent the “distilled wisdom” of consumer groups/governments/ businesses To ensure optimal effectiveness of standards a number of conditions need to be fulfilled

4. Effective Consumer Protection: the Big Picture Starts with realistic understanding of the situation: consumers vs. businesses: an uneven playing field: unequal bargaining power Needed: Laws which “level the playing field” Informed, empowered consumers and consumer movement Proactive businesses wishing to maintain expand their clientele Standards an important part for governments and businesses

5. Positioning Standards in the Consumer Protection Regime Consumer Law sets basic framework: e.g., Consumer Protection Act, Sale of Goods Act, EU Directives (e.g, Unfair Commercial Practices Directive), Consumers, Estates Agents and Redress Act, various utility specific regulatory regimes Needs resourcing, publicity, enforcement Accessible civil court regime – eg., class actions, small claims courts Consumer information: e.g., Consumer Direct – info/advice/helpline co-regulation – eg., Enterprise Act OFT approved consumer codes of conduct, approved use of standards by utility regulators Self regulation Codes, complaints handling, dispute resolution -- standards Inquisitive, demanding consumers—throughout the transaction process, backed up by vigilant consumer organizations

6. Standards and the three phases of consumer transactions Pre-transaction phase: does consumer have adequate information in order to make informed purchase? Can problems be anticipated and avoided? Does consumer understand the process? Does consumer know his/her rights? Transaction phase: was transaction conducted fairly? Was accurate, adequate and timely information provided? Does consumer know his/her rights? Post transaction phase: if there are problems, are there options? How accessible and easy to use are those options? Standards can play important role in each phase

7. Key standards BS 8463: Specification for customer billing practice BS 8477: Code of practice for customer service ISO 10001:QM-CS-Guidelines on codes of conduct for organizations ISO 10002: QM-CS-Guidelines for complaints handling in organizations ISO 10003: QM-CS-Guidelines for DR external to organizations ISO/CD 10004: Guidelines for monitoring and measuring customer satisfaction

8. BS 8463 – Customer Billing Gives consumers a real prospect of getting an accurate and timely picture of their utility (and other) use Sets minimum standards of billing services Gives consumers a clear understanding of billing process Addresses causes of billing complaints, thereby reducing likelihood of complaints arising Promotes informed consumer choice Assists service providers in presentation of essential information ISO network billing standard work to start soon

9. BS 8477: Customer service Published in 2007: not yet an ISO standard Principles of good customer service Roles and responsibilities of top management and employees Operational practices: responsiveness, information, customer interactions, records, corrective actions

10. ISO 10001, 10002, 10003 Product of international standards process involving consumer/government/business experts from around the world To be applied to domestic and international contexts To be used only for customer issues, not worker, community, etc.. Guidance standards, not specification standrds Suite of standards, deals with: anticipating and addressing consumer issues, complaints prevention Complaints handling by organization Dispute resolution external to organization Part of ISO 9000 Quality management series, but each standard can be used independently

11. ISO 10001– Codes of Conduct Published by BSI in late 2007 Covers promises made to customers by organizations (private and public) aimed at enhanced customer satisfaction (e.g., covering delivery, returns; handling personal information, statements re: qualities of products/services Guidance on preparing, using and improving customer satisfaction codes Can decrease likelihood of problems arising and when they do, can assist in redress Can be used as part of regulatory regimes

12. ISO 10001: key components Guiding principles: commitment, capacity, visibility, accessibility, responsiveness, accuracy, accountability, continual improvement Code should be supported by organizational framework for decision-making action Guidance on code planning, design, development, implementation, maintenance, improvement

13. Possible applications of ISO 10001 Electronic commerce, Customer Service Charters for public/quasi public organizations, and regulated utilities, unregulated firms, especially with service orientations Heathrow Express Guarantee If your journey is delayed by more than 15 minutes because of an event within our control, we’ll give you a free ticket or refund. Just…send it to us with your rail ticket within 28 days of the delay or cancellation. London Underground Customer Charter If you experience a delay …of more than 15 minutes…….we will refund you with a voucher to the value of the single delayed journey.

14. ISO 10002– complaints handling Guidance on design and implementation of fair, effective and efficient internal complaints handling process Complaints: expressions of dissatisfaction where response implicitly/explicitly expected Complaints are consumer intelligence yet to be capitalized upon Published by BSI in 2004

15. ISO 10002: key components Guiding principles: visibility, accessibility, responsiveness, objectivity, charges (preferably none), confidentiality, customer-focused approach, accountability, continual improvement Process supported by organizational framework for decision-making and action Guidance on planning and design, complaints process operation, maintenance and improvement

16. Example Applications: ISO 10002 Review of Australian airports complaints handling against ISO 10002 (2006) Australian Prudential Regulation Authority commits to using ISO 10002 (~2007) Australian Financial Services Licence Holders using ISO 10002 2006-(2007) Australian Disability Services Commission has complaints policy drawing on ISO 10002 (2008) Australian Office of the Health Services Commissioner reviews practices against ISO 10002 (~2007) Australian Department of Immigration and Citizenship complaints process draws on ISO 10002 (2006) Australian family dispute resolution practiioners draws on ISO 100o2 for its complaints handling Hong Kong Property company gets ISO 10002 (2006) Hong Kong Integrated call centre gets ISO 10002 certification (2007)

17. ISO 10003 – external DR For those situations where internal complaints handling not successful Guidance for organizations on participating in external dispute resolution schemes On selecting DR providers, using their services Essentials for fair, suitable, transparent, and accessible dispute resolution processes For monitoring, evaluating and improving the DR process DR can take form of mediation, arbitration, tribunal, ombudsperson, etc. Published BSI standard in late 2007

18. ISO 10003: key components Guiding principles: consent to participate, accessibility, suitability, fairness, competence, timeliness, confidentiality, transparency, legality, capacity, continual improvement DR supported by organizational framework for decision-making and action Guidance on planning, design, development, operations, maintenance and improvement

19. Example Applications: ISO 10003 Canadian Financial Ombudsman commits to using ISO 10003 (2007) Energywatch recommendation to Ofgem that its principles for statutory redress are in accordance with ISO 10003 (2007) Telecom Regulatory Authority of India consultation document recommends that telecom complaints handling use ISO 10001, 2, 3 (2007) British and Irish Ombudsman Association recommends that Postcomm’s complaints process makes use of ISO 10003 (2008) Electronic Commerce

20. ISO CD 1004 – monitoring/measuring consumer satisfaction Not yet completed Should complement ISO 10001, 2 and 3 Guidance on how to assess customer satisfaction E.g, techniques for designing questionnaires

21. Conclusions BSI/ISO standards can be important part of overall consumer protection strategy Standards can be used in pre-transaction, transaction and post-transaction phases Can be used by governments, businesses and other organizations, courts, consumers Many possible applications of key BS and ISO customer satisfaction standards: service orientation is particularly good fit New ISO standards? E-commerce, network billing

22. Thank you! Questions welcome! Dr. Kernaghan Webb Associate Professor School of Business Management Faculty of Business Ryerson University kernaghan.webb @ ryerson.ca 416-979-5000 ext. 2478