Behavioural Economics and Vulnerable Consumers

Our Actions, Outputs and Stakeholder Engagement...

Across 2009 the Panel was involved in a number of discussions with Ofcom about its approach to consumer information and empowerment. In March 2009 Panel members received a discussion paper from Ofcom setting out Ofcom's approach to consumer information. The Panel advised Ofcom that its process for making decisions about information provision appeared to be fragmented rather than global, and that there could be value in looking at the entire set of consumer information requirements. The Panel therefore requested a strategic discussion with Ofcom's project director responsible for its consumer information work streams.

In April 2009 it was agreed that there would be a Panel brainstorming session with Ofcom colleagues on consumer information. This meeting took place in July 2009 and explored ways in which Ofcom could take a more holistic approach to consumer information and empowerment, rather than approaching it on a project by project basis.

At its November 2009 meeting the Panel noted that the consumer empowerment project had dropped down Ofcom's list of priorities. They emphasised that this was an area of priority to the Panel, and that is was important to gain a strategic view of all the issues in this area by identifying how consumers use information. In light of this, the Panel decided to consider doing research to better understand consumer behaviour and how consumers actually use information.

The Panel noted that Ofcom was compiling a literature review on the implications of behavioural economics for regulation and that the findings of the review would be included in Ofcom's revised policy guidelines. The Panel engaged regularly with Ofcom colleagues involved in this work, providing written input and advice.

The Panel was keen to ensure that this work took account of any specific differences in the behaviour of vulnerable groups of consumers. In February 2010 the Consumer Panel therefore commissioned Dr. Pete Lunn and Dr. Sean Lyons from the Economic and Social Research Institute (ESRI) to review the latest findings of international academic research into behavioural economics, with a particular focus on  whether those consumers traditionally seen as more vulnerable, e.g. the elderly, people with a disability or people on low incomes, are more likely to display biases in their decision-making, and if so what the implications are for those consumers and for approaches to regulation.

The Panel discussed the issues with other consumer groups, including Which?, the Legal Services Board Consumer Panel and Consumer Focus, sharing knowledge and identifying cross-sectoral implications.

The Panel published a report setting out the key findings and recommendations from the work in December 2010. The main findings of the work were incorporated into Ofcom's revised policy guidelines.

>> Back to overview

If you have any difficulties accessing content on this page, please email us at