AGM Minutes 2004

'''Minutes of the forty-seventh Annual General Meeting of CONSUMERS' ASSOCIATION held on Saturday 27 November 2004 at the Royal Institute of British Architects (RIBA), 66 Portland Place, London, W1B 1 AD'''

starting at 2.15pm

PRESENT: Mr Brian Yates (Chairman), Mr Peter Vicary-Smith (Chief Executive), and some 120 Ordinary members of the Association.

 1/47 MINUTES OF THE 46TH ANNUAL GENERAL MEETING OF CONSUMERS' 

'''ASSOCIATION HELD ON 29 NOVEMBER 2003'''

The Minutes of the meeting held on 29 November 2003 were APPROVED.

2/47 CHAIRMAN'S STATEMENT

Mr Yates welcomed members to the meeting, the second to be held at RIBA, and said that feedback on the workshops held prior to the meeting would be welcomed. He then paid tribute to Dame Sheila McKechnie, Director from 1995 until her untimely death in January 2004. Mr Yates informed the meeting that there were plans to establish a Sheila McKechnie Foundation which would help to identify the next generation of campaigners through an award scheme - something he believed Sheila would have thoroughly endorsed. The Chairman went on to say that the proposed Foundation, which was supported by the Chancellor of the Exchequer, Gordon Brown, as well as former Chancellor and President of this organisation, Geoffrey Howe, would be launched at 11 Downing Street in February 2005. Anyone wishing to become a Friend of the Foundation could register their interest in the Jarvis foyer.

The Chairman thanked the staff for rallying round in the months that followed Sheila's death. In particular he thanked Kim Lavely, Deputy Director, who had steered the organisation with great skill in the ensuing months. The Chairman added that Sheila had passed on a tremendous legacy to her successor, Peter Vicary-Smith, who was already bringing his passion for consumer issues and solid business acumen to the organisation.

The Chairman reported that Council had taken the decision earlier in the year to move to the single brand of Which? as this was the brand trusted for its independence, its research and its campaigning by a staggering 83 per cent of the population. Although the Consumers' Association name was highly regarded in the corridors of power, it was not well known by consumers and even fewer knew of the link to Which?

The opportunity had therefore been taken to refresh the organisation's identity through the logos, new look magazines and more public facing campaigning.

At the time of the brand launch Which? also launched Britain's largest ever consumer consultation: Bite Back. This was a consultation with the public, aimed at issues that matter to consumers. The Chairman said that as part of this exercise of getting closer to consumers, he had taken part in a number of Which? Roadshows in shopping centres around the country and had met many members who were really proud of the work Which? was doing.

The Chairman stated that the financial position of the organisation remained healthy despite a reduced surplus. Turnover of £56.6m was up £4m (or 7.7%) on the previous year. A large part of this increase came from Which? magazine due to the full year effect of the recent subscription price increase. Which? Online continued to grow strongly, with turnover up by £1.2m and the number of subscribers breaking 100,000 for the first time just before the end of the year.

The Chairman said that the value of the investment fund recovered by £1.1 m during the year. However, because CA had now transferred the fund from Merrill Lynch Investment Managers to Carr Sheppards Crosthwaite, it had been necessary to recognise the remaining unrealised loss on the fund at June 2004 of £0.9m, reducing the surplus for the year by this amount. However, the surplus for the year was still £0.5m.

Operational cost increases had been kept to reasonable levels, and a substantial proportion of the increased turnover had been invested in areas such as improving the magazine and online content, recruitment of new members and the technological infrastructure. The main benefit from all of these initiatives would come in future years.

The closure of Health Which? in June had been a difficult decision to take. The magazine had been valued by its subscribers. However, despite many attempts to develop the title and its promotion, subscriber numbers continued to fall and, it was taking more and more resources to produce. Council had therefore taken the decision that health topics could be tackled effectively in other ways.

The Chairman reported on the outcome of the Governance review referred tc at the last AGM. The Working Party, chaired by John Rimington had reported to Council in May 2004 and the recommendations had been adopted. In particular the review had clarified the responsibilities of and relationships between the Chairman, Council, Which? Board and the Chief Executive. One key decision was to subsume the responsibilities of the Remuneration Committee within a new Terms of Service Committee. This Committee had a broader role to monitor the salary and non salary terms of service of staff. A summary of the governance arrangements had been circulated with the AGM papers.

In conclusion the Chairman said that he felt extremely positive about what had been achieved in 2004 and was confident that even more would be achieved in 2005. He then invited Peter Vicary-Smith to address the membership.

3/47 CHIEF EXECUTIVE'S STATEMENT

Mr Vicary-Smith said that he was delighted to be attending his first AGM as Chief Executive and said that since he joined in August 2004 he had got to know a diverse and exciting organisation. As an outsider coming in, he had been enormously impressed by the expertise across the organisation which ensured that it remained respected and influential among the public, media and other key opinion formers.

There had been some significant changes and initiatives in both Which? products and campaigning over the last few months. Members' feedback about the products was essential to continued improvement, and many emails, letters and telephone calls had been received about the new design and format. Council and management would be listening to these views and making any necessary changes over the forthcoming issues.

Mr Vicary-Smith said that new members were vital to Which? as an organisation, so as to enable us to remain financially independent of industry and government and to give us the authority to speak on behalf of all consumers. Which? would continue to offer value for money and expertise to those who could afford its products, but there had to be ways in which the broader information and advice that Which? created, every day, could be accessible to others who might not be members.

It was increasingly necessary for Which? to provide information to people in the way they wanted it. New technologies, particularly the Internet, could provide Which? with the springboard it needed for diversifying the ways in which people could interact with us. Initiatives such as time limited offers for purchasing our information online were being looked at. It was also the intention to redevelop the website by the end of 2005 to ensure many more people could access core consumer information more easily.

Apart from the sustained growth in Which? Online, the Internet had also had a major impact on Which? campaigning work too. Two years ago when the endowmentaction campaign was launched, none of those involved could have imagined the success and popularity of the website and the information it had to offer. With one million visitors to the endowmentaction website alone, the power and effectiveness of reaching out to new audiences through new technologies was clear to see.

Since 1963, Which? Magazine had reported on the numerous and all too familiar failings of the estate agent sector. Due to the high number of complaints from members relating to rogue estate agents, Which? launched the high profile Move It! Campaign earlier in 2004 to regulate estate agents and to ensure people had access to an ombudsman scheme if things go wrong.

Which? members were at the heart of the campaign, providing the real life stones and experiences that brought the issue to life. The campaigning had really had an impact in that not only would home buying and selling be changed forever through the Housing Act and the introduction of the Home Information Pack, but a new redress scheme would be introduced.

Last year members were informed about the new supercomplaint initiative available to consumer organisations through the Enterprise Act and this year, CA/Which? had been granted formal powers to complain to the Office of Fair Trading on markets that did not work in the consumer interest.

Since last year's AGM, two supercomplaints on care homes and Northern Irish banking had been launched. These were two markets that were not working in the consumer interest.

In response to the supercomplaint on the care home sector, the Office of Fair Trading launched an investigation in July 2004 into pricing information available to consumers and contracts offered by care homes. Making a supercomplaint was a very powerful tool to highlight poor markets and ensure action was taken. Which? would continue to use supercomplaints in the interest of all consumers.

Mr Vicary-Smith said that over the past 12 months, Which? had successfully pressurised industry and government to help consumers make a healthier choice when thinking about their diet. The government's proposed reforms covering advertising of junk food and food labelling with the publication of the Health White Paper earlier this month, was a reflection on the successful campaigning of Which?

Financial services remained one of the most high profile campaigning areas. Not only was Which? still concentrating on the endowment saga, but credit card companies had also been in the spotlight. Which? research over many years had highlighted the complexity of so many financial products. Credit cards should be simpler and although Which? had successfully pressurised the industry to make some changes, we were still campaigning for more, although the Consumer Credit Bill should offer further opportunities.

Mr Vicary-Smith said that one of the big themes in the coming year would be for Which? to give consumers the opportunity to challenge the institutions that influenced our everyday lives - the regulators such as the Financial Services Authority, The Food Standards Agency, the Healthcare Commission and the Office of Fair Trading. The power of these organisations was immense and yet Which? believed they were not as in touch and as connected to the impact of their work on the everyday lives and experiences of consumers as they should be.

Another key theme in the coming year would be to put respect for consumers right at the heart of the agenda for industry and institutions. While there were many major areas that needed to be challenged where financial and other injustices suffered by consumers was great, a large part of what could make life trying was the lack of respect shown by companies and institutions to their customers.

Mr Vicary-Smith concluded by saying that he believed a healthy organisation was one which aimed to grow and reach out to new audiences; one that continued to challenge itself and vested interests; one which was constantly seeking to innovate and be seen as relevant, effective and above all passionate - passionate about our products, our services, our campaigns and most importantly passionate about the interests of the members at the heart of the organisation.

'''4/47 REPORT OF THE COUNCIL OF MANAGEMENT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2004'''

The Chairman said that as in previous years, he had invited all members to submit written questions in advance of the meeting. Approximately twelve members in attendance had submitted questions in advance of the meeting. Their questions would be taken during the course of the afternoon.

The Chairman said that Mr Waller had asked how soon after their appearance in Which? and Which? Extra, reports were included in Which? Online and that he had noted some reports were not dated.

In reply, Malcolm Coles (Editor of Which?) said that the aim was to add reports to Which? Online and Which? Extra in the week that Which? was published.

Reports on Which? Online that were based on one specific magazine article were dated. However, in more than thirty key areas, information was re-edited into 'essential guides'. These were not dated as they contained relevant information from several different magazine reports. The information in them was also kept up to date - prices and rates, in particular, were updated regularly.

The Chairman said that Mr Possener and Ms Huszty had asked whether Which? intended to include in its reports an assessment of waiting times on telephone help lines run by suppliers/manufacturers of the products and services being tested. Consumers felt powerless in dealing with help lines that offered nothing but extended waiting times and unnecessary voice prompts.

In reply Mr Coles said routine monitoring of call centres was not undertaken because of the expense. Ofcom, the regulator in this area, was looking at monitoring the call centre industry with a view to setting minimum standards of service. We would be responding to their proposals. We had asked them to consider changes to the system of revenue sharing which made it advantageous for some companies to keep customers waiting as they make a profit out of the phone call from playing a ringing tone when in fact your call had already been answered.

Mr Viggers asked whether any comparison had been made on how long it took companies to connect customers to a human being, rather than the voice prompt system that was now common place. Mr Coles confirmed that this specific area had not been addressed.

A member said that he had discovered that if a company had an 0870 telephone number then they received a percentage from the cost of a call. So it was in the company's interest to keep customers waiting. The Chairman added that 0871 telephone numbers cost about 10 pence per minute while 0870 numbers cost approx 8 pence per minute. Companies could make as much as 2 pence per minute so it was in their interest to keep customers hanging on.

Mr Woolly said that he had a caller display service on his telephone which meant he was able to screen his calls. However he was frustrated with numbers being withheld and calls showing up as international but which were not true international calls from abroad.

The Chairman said that the signifier 'international call' did not necessarily mean it was. Some callers would be using various types of pre-paid cards and dial in type calling services where you rang a particular number in the UK then got a new dialling tone so that you can ring out. With regard to numbers being withheld, the Chairman said that some people might wish for their numbers to be withheld, for instance those who were ex-directory.

A member reminded the meeting that Which? had already published an article with a grid showing how much consumers would be paying for each premium rate number.

A recent employee of a call centre said that automatic call answering was necessary in order to deal with huge numbers of calls.

The Chairman said that CA/Which? understood the need for call centres. What was needed was a fairer system where customers were not kept waiting for profitable reasons.

The Chairman said that Mr Glover had asked whether the change of name to Which? could not have been left to the members to discuss at the AGM.

The Chairman said that he had reported on the Council discussions during his speech earlier and the reasons for moving to a single brand. The company names had not changed. However, Mr Glover informed the meeting that he was happy with the answer already given but felt members should have had an opportunity to discuss the decision at an earlier stage.

A member asked why the "?" had been amended as the new symbol could not be reproduced on a standard keyboard.

The Chairman remarked that what consumers could see was a logo. The word Which? would still be used in correspondence.

Mr Wagner said that he thought the logo was rather good and he was very pleased with the new design.

Doctor Roston said he had found Health Which? extremely useful, particularly an article on strokes. This had been valuable when he was receiving hospital treatment for a stroke.

Helen Parker (Editorial Director) said that Health Which? had been published for sixteen years and Which? was very proud of the amount of information it had provided readers. Unfortunately, subscriber numbers had been falling for some time and it became clear that significant resources were required to keep the publication going, which could not be justified. Which? magazine as well as DTB and other publications, where relevant, would continue to support health and food issues when appropriate.

The Chairman said that Mrs Walton had a question relating to the large discrepancies in the price for hearing aids and that she wanted to know what action/research had been taken by Which? in the past year.

Nick Stace (Director of Campaigns and Communications) replied that Which? would shortly be commissioning a major market study, not just in hearing aids but in other medical devices. This might be the subject of a supercomplaint subject to a market analysis being carried out.

Mrs Walton said she was pleased that action would be taken as it was very difficult to find adequate information on the internet regarding pricing for hearing aids. While some NHS hospitals provided free digital hearing aids, others did not and this ought to be made clear.

Mr Cunningham said that he currently wore two digital hearing aids and although they were good, they were extremely expensive. He had tried to get them on the NHS without success.

Mr Snow said that his GP had recommended an NHS hospital that provided digital hearing aids on the NHS and although it took a year to sort out, he now had his hearing aid and it was working perfectly. Mr Snow said that if the NHS could speed up their delivery service then everybody would get the service that they were entitled to.

Regarding the pilot study that the NHS was currently conducting into digital hearing aids, Mr Stace said he understood that it was going to become a national service soon although he wasn't sure of the time frame.

The Chairman said that Mr Snow had asked what action could be taken to reduce or eliminate cold-calling on private and mobile phones.

Mr Snow added that there is a bill being put through by Kevin Brennan MP, on some of these aspects, but Mr Snow hoped that a serious campaign could be started together with Mr Brennan.

In reply, Mr Stace said this matter would be raised with Ofcom. Consumers could register with the Telephone Preference Service as this could help in reducing the number of 'junk' calls, but it was dependent on companies complying.

Mr Whittington said it would be helpful if there was a set of standards that applied to products for sale in the UK.

In reply, Mr Stace said that for most general use products there were standards that defined products, for example, all plugs made for UK domestic mains were standard 13 Amp design and interchangeable.

However, non-mains electrical appliances did have different electrical connectors (so power supply transformers often were not interchangeable between different makes of mobile phone or power drill). Low voltage lighting systems might have connectors that were brand specific.

There are some issues with "new for old" relating to metrication, e.g. where you need to replace parts of and old "imperial unit" pipe work and there were now only metric sized piping available. Standards here could help with adaptors for common problems.

On the second point, Which? had published an article on double glazing a couple of years ago including a survey of customer satisfaction. No brand had stood out, and the nationals weren't quite as good as the independents. The conclusion was that a sound option was to get a recommendation from a friend about a local firm.

Mrs Wagner said that Drug and Therapeutics Bulletin (DTB) information was not accessible via The Department of Health website and asked whether it could be made available via the Which? website. Treatment notes were already available on Which? Extra.

In reply, Helen Parker said that DTB was only hosted on a password-protected NHS site at the moment. Over the next year the product would be developed and hosted in-house which would provide an opportunity to think about access for Which? Members.

Mr Lee asked whether Health Which? had ever covered the issue of HIV Aids.

Ms Parker replied that topics covered by Health Which? tended to be those that most members wanted to read about. However HIV Aids was a serious issue and she would consider whether there was scope to report on this subject.

Mr Davis said that in view of the increasing cost of energy and the need to conserve it, it would be interesting to receive an up-to-date study of renewable energy systems e.g. solar, wind, heat pumps, together with comparisons of systems, suppliers, contractors plus costs.

Mr. Coles replied that in March 2002 a report had been published in Which? on solar heating. The Which? schedule for 2006 included a report based on solar heating - how to get it, how much it cost and an explanation of the grant system.

In the meantime, Which? had a report scheduled for summer 2005 which would assess the various 'green' tariffs available from the energy companies. These were the easiest ways for customers to ensure that their demand for electricity was met using only renewable sources.

The Chairman said that Mr Williams had said that up to about ten years ago, Which? was active in exposing and opposing the activities of firms that provided loans at unaffordably high interest rates and asked whether it was likely that, under a new Director, Which? would try to look at this area again.

Mr Stace replied that Which? actively campaigned on issues within the consumer credit market and worked with other consumer organizations such as Citizens Advice and the National Consumer Council. CA had been a key contributor to the development of the Consumer Credit Bill announced in the Queen's Speech and would be lobbying to ensure that the provisions in the bill were carried through successfully. The Bill was expected to include measures to make it easier for people to challenge unfair or extortionate credit agreements. It would also help the authorities to tackle unscrupulous lenders.

The issue of mis-selling had affected millions of people in the personal finance market, particularly in relation to endowment mis-selling. The endowment action campaign had helped hundreds of thousands of people make complaints and successfully claim compensation. Mr Stace added that the financial industry relied on consumers being complacent.

Mr Gamlin asked to what extent Which? saw its function to educate the membership in the structure and operation of the consumer market in respect of certain general criteria, as distinct from the merits of specific products and services.

Ms Parker replied that for many years, the organisation had seen its role as going beyond advising consumers solely on the merits of specific products and services. For example, if a whole class of products was unsafe or represented poor value, then there was little that individual consumers could do by exercising individual choice.

Issues broadly grouped under the heading of 'corporate responsibility' where the impact of companies and their products and services on issues such as the environment or human rights, were complex. Members were interested in Which? providing advice and information in these areas.

Some work has been undertaken in the past. For example, issues such as fair trade products, how to make ethical choices with financial products, environmental issues around energy and water use, how to adopt green practices such as recycling, re-using and reducing reliance on resource-sapping products and packaging, reducing car use or investing with a bank with stronger ethical policies. We have also investigated the 'corporate social responsibility' policies that some big, multinational companies have drawn up around the manufacturing of trainers and mobile phones.

Mr Pocock asked about the secrecy on the Monthly Best Buy Competition and asked that details, including the names of the winners, be published in Which?

Mr Coles replied that the information was not secret. The names of the winners were published Online and 90% of members now had access to the internet. Publishing the results in Which? magazine would take up valuable space, although he would see if future winners names could appear in print. If any member requested the results, then we were more than happy to furnish them with this information by post.

The Chairman said that Mr Ferguson had asked that Which? keep up the pressure on the government and companies to safeguard state and company pensions and keep up the good work to ensure car servicing was effective.

Mr Stace said that CA/Which? had been committed to working on pensions for a number of years. The Government had been lobbied to introduce a Pensions Protection Fund through the 2004 Pensions Act and Which? remained committed to simplifying the pensions system. Lobbying on stakeholder pensions had ensured the price cap remained as low as possible.

On the State Second Pension and contracting out, we were pressing the industry to provide much more comprehensive information on state second pensions and specific information for individuals on whether to contract back in. We were concerned some people might have been misadvised when they contracted out and further research was under way.

The report in Which? on garage servicing had encouraged Chris Ruane MP to carry forward a 10 minute rule bill on the issue earlier this month.

Mr Viggers said that as the Chairman of his local pensioner group and his connection with the Greater London Pensions Association, he felt that the basic state pension should be sufficient so that means testing was unnecessary.

Mr Moore said that he had been a subscriber to Which? magazine since its first issue and that last year he had received a 36% increase in his subscription. Around the same time, his wife, who was not a member, received a 'prize draw' missive. Mr Moore also mentioned that Which? had transferred £12m approximately of funds to a new fund manager and said that as new fund managers demanded 5% upfront of the total fund, this was a substantial amount.

The Chairman replied that although the subscription increase appeared steep at 36%, it had been over eight years since an increase was implemented. However, new subscribers have been paying the higher rate long before existing members were asked for an increase.

Which? had found that prize draw was effective as amounts given away as prizes were more than recovered from the subscriptions of new members.

Regarding the transfer of funds, there was no 5% transfer fee. The sum involved was no more than £25,000. The Investment Committee had decided that there were sound reasons for making the switch.

Mr Miller said that in his view, the Annual Report was not as clear as it might be regarding the new Director.

Second, Mr Miller asked if the 10% discount on books, available to members attending the AGM could be increased because the full price included postage and packaging.

The Chairman pointed out that a significant part of page 7 of the Annual Report was dedicated to the Director but that he would look at the next Annual Report to see if any further improvements could be made.

Ms Parker said that consideration would be given to increasing the 10% discount for future AGMs.

Mr Berry said that as the Trustee of a small charity, the Charity Commission had advised that if Trustees wanted to take out Trustee Indemnity Insurance the Trustees would have to pay it themselves.

The Chairman suggested that Mr Berry raise this matter with the Commission once again as they were often prepared to allow these premiums to be met from the charitable assets.

The Resolution to receive the Annual Report and Accounts was CARRIED.

5/47 ELECTION OF COUNCIL MEMBERS

The Chairman said that there were four vacancies on the Council of Management. They arose from the retirements of Anthony Burton, John Rimington, Sue Leggate and Gary Waller.

The Chairman announced that four nominations had been received for the four vacancies and that all retiring Council members were standing for reelection.

In accordance with Article 4.5.3 the Chairman declared the above-mentioned four candidates duly elected to Council.

6/47 RE-APPOINTMENT OF VICE PRESIDENT

The Chairman said that it had been his intention to recommend James Douglas for re-appointment as a Vice-president. However, James had suffered a stroke in September and died a few days later on 22 September. James was one of a key group of figures who helped to establish Which? in 1957 and was a Council member from 1957 to 1958 and then from 1959 to 1974. He became a Vice president in 1974.

His fairmindedness and habit of not speaking unless he had something to say were much appreciated on the Council.

7/47 RE-APPOINTMENT OF AUDITORS

The Chairman said that at the last AGM he had reported on the plan to put the external audit out to tender during 2004 and said that this had taken place in the autumn. As a result it had been decided by Council that PriceWaterhouseCoopers LLP be replaced by Deloitte and Touche LLP.

The Chairman thanked Bob Humphreys and his team of PriceWaterhouseCoopers LLP for their work over the years and MOVED: THAT Deloitte and Touche LLP be re-appointed as Auditors, to hold office until the conclusion of the next General Meeting at which accounts are laid before the company.

The Resolution was duly seconded and declared CARRIED. 8/47 REMUNERATION OF THE AUDITORS

The Chairman MOVED: THAT the remuneration of the Auditors for the ensuing year be fixed by the Council of Management.

The Resolution was duly seconded and declared CARRIED.

There being no other business the meeting ended at 4.25pm.