Interagency Collaboration
		The Department of Consumer Affairs is encouraged by statute to create an interdepartmental committee to coordinate consumer protection activities, but recently the department has relied on informal cooperation.
		The department is obligated by law to assess the performance of consumer programs in other state agencies.
		The Department could capitalize on the success of its Consumer Information Center to coordinate and monitor the efforts by other state agencies and provide buyers with a reliable place to turn for information and assistance.

Interagency Collaboration

Finding 4: State and local government efforts on behalf of consumers are numerous and varied -- but they also are uncoordinated and as a result are not as effective as possible.

In recent years more than a dozen state agencies have fully developed consumer protection functions. In addition, the Attorney General, many county district attorneys and some local governments devote resources toward ensuring that the marketplace is functioning for the benefit of consumers and policing individual cases of fraud and anti-competitive behavior.

All of these efforts are in addition to the Department of Consumer Affairs' specific regulatory programs and its over-arching consumer protection functions.

These various efforts are occasionally and only casually coordinated. In some prominent cases, a coordinated review of complaints tipped off investigators to grand schemes that abused consumers. In some cases, county investigations have turned into multi-county investigations. But at all levels, regulators and enforcers said these connections were made informally -- giving credence to complaints from critics that the State's limited consumer protection efforts are further limited by institutional boundaries.

Coordination is not easy, but it is often the best way of ensuring the most important consumer issues of the day are being addressed in the most effective way. That coordination begins with strategically monitoring consumer complaints and acting on the information.

Cooperation by Statute

Policy makers have long recognized that consumer protection requires interagency cooperation. Those on the front lines have often developed the professional relationships and multi-disciplinary approaches that it takes to prevent and respond to marketplace abuses. Some of these concepts and practices were formalized by the Consumer Affairs Act of 1970, which establishes a Consumer Advisory Council and directs the department to create an interdepartmental committee and to assess the consumer-related performance of other state agencies.

The Consumer Advisory Council is supposed to be comprised of business, labor and public representatives. As described in more detail in Finding 2, the statute envisions that the Council involves stakeholders outside of government to help assess consumer needs and the government's response. The department does not have a functioning advisory council. In its last iteration, department officials said the council had devolved into a forum for divisive politics rather than consumer-oriented cooperation.

Similarly, the act encourages the director of the Department of Consumer Affairs to establish a permanent venue for coordinating interdepartmental consumer-related activities:

The director may create an interdepartmental committee to assist and advise him in the implementation of his duties. The members of such committee shall consist of the heads of state departments, or their designees. Members of such committee shall serve without compensation but shall be reimbursed of the expenses actually and necessarily incurred by them in the performance of their duties. ⁽⁴⁶⁾

Recent department directors said they have frequent contact with officials in other consumer-related agencies. However, the press of day-to-day business has prevented them from establishing a committee.

And whether or not the director develops a committee of peers, the department is required by the law to assess the consumer-related efforts of other state agencies:

The director shall submit to the Governor and the Legislature during the month of December prior to each regular session of the Legislature a full and accurate report of the activities of the department relating to consumer affairs, and an evaluation of the consumer programs of each state agency. Such report shall include recommendations, when appropriate, for legislation which will protect and promote the interests of consumers.

... The required evaluation of the consumer programs of each state agency shall include, but is not limited to, comment with respect to the scope, effectiveness, and efficiency of such programs within each agency, as well as deficiencies noted in the coordination, administration, or enforcement of such programs.

The director shall include within the report information regarding his or her experience in obtaining and disseminating information with respect to information available from other departments by the state.⁽⁴⁷⁾

The department does prepare an annual report that describes the department's activities and provides some performance statistics. The report does not describe or evaluate the consumer-related performance of other agencies and it does not recommend legislation to improve consumer protections.

Cooperation and collaboration are essential elements in consumer protection because so many different agencies and all three levels of government are involved.

The Attorney General has the primary responsibility to enforce California's consumer protection statutes. Most of the cases are brought under the Business and Professions Code sections that prohibit false advertising.⁽⁴⁸⁾

But the Attorney General also has a licensing and health quality enforcement section, which represents the bureaus and boards under the DCA umbrella and other state regulatory agencies.

More than 30 local districts attorneys have investigators and prosecutors dedicated specifically to consumer-related issues, and many of the cases that result in statewide or even interstate legal actions are initiated by local prosecutors.

The district attorneys do have a standing committee comprised of representatives from counties that have active consumer protection units. The committee meets regularly to identify trends in complaints, to stay up on changes in the law and developments in major court actions.

Committee members said from their perspective the weakest link in the chain is between local and state agencies. In particular they said the state consumer-related investigators often do not provide the right information in a timely way, reducing the ability of the prosecutors to bring successful legal action. Those are the kinds of weaknesses that could be strengthened by more routine and institutional collaboration.

Informal Cooperation Only

While the department has not capitalized on the traditional mechanisms for creating inter-departmental cooperation, it has developed one program that has the potential to engender a more seamless approach to consumer protection.

In 1994, the department created a Consumer Information Center to consolidate the incoming calls for the boards and bureaus and it is funded out of regulatory fees. But from its inception, the department also saw the information center as a first (and whenever possible, last) stop for consumers turning to the State for help.

The center -- which can be reached at 800-952-5210 -- has the ability to talk with consumers in 140 different languages. It fielded 1.1 million telephone calls in fiscal year 1996-97. In each of the years that the center has existed it has answered more calls, with shorter wait times and with fewer hang ups than the year before.

The department does not discourage calls that do not relate to a regulatory program within the Department of Consumer Affairs. Rather, operators are trained to assess the consumer's problem and which of the hundreds of federal, state, local or non-governmental agencies is best equipped to help that consumer.

The department estimates that 20 to 30 percent of the calls are concerning issue areas that are outside of areas in which DCA has a specific consumer protection program.

In 1996-97, the department referred nearly 15,000 calls to the Attorney General and nearly 50,000 calls to the Department of Motor Vehicles. But call center operators also directed consumers to local Better Business Bureaus more than 12,000 times, and to specific local government agencies nearly 50,000 times.

A frequent compliment from callers is that they were pleasantly surprised to quickly be able to speak with a live and knowledgeable person -- who may not have had all of the answers, but could listen to their problem and simply tell them whether there was someplace in government they could turn for help. By itself that is a valuable service for the less sophisticated taxpayers in an increasingly complex and automated world.

Not surprisingly, the major issue with the call center is a lack of money. Like all other department activities, the general consumer protection workload associated with the call center is funded by blending licensed-based special fees into programs that service those licensing programs.

In 1996-97 the department spent $2.8 million operating the call center and sought a General Fund appropriation of $880,000 to cover the costs of fielding calls unrelated to special-fund programs. The Legislature denied the request. The department repeated that request in the 1997-98 budget process. The Legislature is reluctant to allocate General Fund money to a function that from a legal standpoint exists to serve specially funded programs -- and either way seems to be doing just fine without General Fund money.

However, the department is required by law to act as a clearinghouse for all consumer complaints -- whether or not they concern the department's programs. The director is required to receive and forward complaints to appropriate authorities. The director is required to analyze the complaints to detect trends.⁽⁴⁹⁾

The Consumer Information Center is performing that function -- but only to a limited degree. Between 20 and 30 percent of the calls do not have anything to do with the department's specially funded programs. Many of those calls do not fall within the "jurisdiction" of another agency. But that does not mean the issue is not real or unimportant to the taxpayer, who may be making their only call to a government agency in months.

If broadened, the Consumer Information Center could be more than one-stop shop for consumers. It could be a diagnostic tool that all departments with consumer-related responsibilities could use to detect problems in the marketplace. The department also could follow up on complaints received through the call center to determine the effectiveness of its programs and those of other agencies, as envisioned by the annual reporting requirement in the statutes. Developing a follow-up mechanism could be particularly valuable in determining if enforcement efforts -- whether by regulatory boards or traditional law enforcement agencies -- are vigorous enough.

Consumer Affairs officials said other departments have cooperated with the call center in terms of providing information that operators can distribute. But the other departments are not collaborating to any significant degree to make the information center more useful to either consumers or public agencies charged with protecting consumers.

Beyond Information

There will never be enough money to fund all of the consumer protection activities that might be warranted. Nor is it likely to ever make sense to consolidate all consumer-related functions into a single agency, or even at a particular level of government.

But clearly consumers would be served better if protection efforts were guided by two fundamental principles: first, that government should work in the most seamless way possible, and second that all of the various tools and talents represented by the various agencies are acting in an orchestrated and effective manner.

In the course of this review, consumer protection staffs often suggested nuts and bolts ways that investigators from other agencies could act more effectively, how information about bad actors could be better disseminated to the public, and how scarce resources could be better targeted toward egregious offenders. These kinds of assessments and ideas should be the basis for continuous improvement of the State's efforts. But this will only be the case if there is an ongoing interest in collaboration and an institutionalized mechanism for assessing and refining the consumer protection network.

Consumer advocates believe that until the State and local agencies strategically gather and assess complaint information, enforcement will be sporadic and ineffective.⁽⁵⁰⁾

A number of reviews over the years by the Bureau of State Audits show that many regulatory agencies are slow to investigate and even slower to act, even to the point of missing legal deadlines. ⁽⁵¹⁾ Those audits show the importance of the department's role in following up on complaints that are forwarded to other agencies.

And a former director of the department recommends that the department formalize the process for sharing information between the Department of Consumer Affairs, the Attorney General, local district attorneys and others to strengthen enforcement efforts. ⁽⁵²⁾

Summary

The Department of Consumer Affairs has an obligation to make sure that consumers are getting their money's worth out of the State's consumer-related programs. The department also has an opportunity to inspire collaboration among the various regulators and law enforcement agencies charged with preventing and responding to market abuses. The department can begin to meet its obligation and to capitalize on present opportunities by expanding its ability to receive, analyze and follow up on consumer complaints.

Recommendation 4: The Department of Consumer Affairs should develop a Consumer Protection Alliance to coordinate the activities between state and local agencies responsible for consumer protection.

• The top officials from the agencies represented in the alliance should meet at least annually to establish goals for the coming year and to assess the progress made toward already established goals. The alliance also should establish technical committees of managers and supervisors to identify specific problems and recommend solutions that would provide seamless and effective consumer protection.



• The alliance should help the department to fashion a process and establish standards that the department should use to fulfill its statutory obligation to assess and report on the consumer protection activities of other state departments.



• The department's Consumer Information Center should be formally designated and widely advertised as the central contact point between California consumers and the State. While the center is paid for with special funds, it clearly operates as a primary contact for consumers with complaints that fall within the jurisdiction of other agencies or within the jurisdiction of no particular government agency. While some General Fund revenue is warranted for this effort, the department should also implement available technologies to track and assess other agencies for the calls fielded by the Consumer Information Center that fall within the responsibility of those other agencies.