Ombudsman Omnishambles: New report exposes serious failings in ombudsman approval and oversight

A new report, released today by consumer campaigners Marcus Williamson and Helen Dewdney, exposes serious failings in the processes by which new ombudsmen are approved and overseen.

Since 1 October 2015 a new privatised system of ombudsmen is available for consumer complaints in areas such as retail and aviation. Consumers expect an ombudsman to be independent, open & transparent and to abide by the rules of its trade body.

However, the organisations responsible for appointing and overseeing the ombudsmen appear to be taking a “light touch” approach to the new privatised ombudsman sector.

Among the findings of the report:

* The Chartered Trading Standards Institute (CTSI) does not carry out basic “fit and proper” person tests before approving ombudsmen, their staff and contractors.

* One ombudsman has a convicted criminal as its “Director of Communications”.

* The same ombudsman is not abiding by Ombudsman Association rules on independence or on openness & transparency. In particular, the company is running an “accredited retailer” programme in parallel with having the ombudsman role and refuses to provide a list of the retailers which are its members.

Yet, despite these serious issues, there has been no action taken so far by the CTSI, Ombudsman Association (OA) or Civil Aviation Authority (CAA).

The report is being submitted to the Department for Business, Innovation and Skills as part of a current call for evidence which closes on 23 June. The submission and publication of the report coincides with this week’s CTSI conference and includes responses from the CTSI, OA, CAA and Carter-Ruck.

Marcus Williamson, Editor of the consumer information website CEOemail.com, says:

“We recommend that the Ombudsman Association, the Chartered Trading Standards Institute and the Civil Aviation Authority must now take urgent action to examine and resolve the issues outlined in this report, before the ombudsman system is brought into disrepute.“

The Report

The report “Ombudsman Omnishambles – Serious unresolved issues affecting the operation of the ombudsman ADR system in the UK” is available to download here:

http://CEOemail.com/ombudsman-omnishambles.pdf

 

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What did the EU do for consumer law?

I have been asked a lot what EU law affects consumer law and what would happen to consumer law should we leave the EU on Thursday. Well, in answer to the second question no-one really knows, just like no-one really knows what will happen to anything.  For the former, “Experts” believe that it will take anything from 2 – 10 years to unravel laws.

We accept European Law here because there is an Act of Parliament (European Communities Act 1972) that sets out that we will abide by European Law and give it precedence.

EU legislation is intended to give consumers across the EU equivalent rights. Each member state will use its own piece of law to implement an EU law, regulation or directive as appropriate. So buy a product from France, French law applies giving the same basic rights as UK law although there may be some differences. See the UK European Consumer Centre for more details.

EU provides:

Regulations. These passed by the European Commission and become law immediately across all member states. So that means each country is immediately bound by it, i.e. it has the same effect as an Act of Parliament.

Directives: These are different to Regulations because they aren’t domestic law immediately. They offer a framework with which each member state must use in order to implement domestic law by a certain date – so as to give effect to the purpose of the Directive. So with these the EC introduce a Directive and each member state could apply it slightly differently when turning it in to law.

So what do we have consumer law related and what is likely to happen to them?

The Consumer Rights Directive 2013 

The UK implemented the:

  1. Consumer Rights (Payment Surcharges) Regulations 2012,
  2. Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 and
  3. Consumer Protection from Unfair Trading (Amendment) Regulations.

The CRR 2012 limits charges in relation to the payment methods used when buying goods and services. Surcharge must not be more than it costs the business to process that method of payment. The price of a product, whether goods, services or digital content, must be quoted inclusive of any non-optional surcharges.

The CCR 2013 is about ensuring that the consumer is given certain information at the point of sale such as ensuring that there are no hidden charges, understand what goods and services are being provided, receive  the information in a “durable medium”. The Doorstop Selling Regulations 2008 gave you 7 days cooling off period but this was repealed when the CCR 2013 came into force.

The CPUT Regulations were slightly updated to include “misleading and aggressive tactics”. We already had The Consumer Protection from Unfair Trading Regulations 2008 which were implemented under the EU Directive 2005/29/EC concerning unfair commercial practices in the internal market and were updated in 2014. Much is also covered by The Consumer Rights Act 2015.

Consumer Credit Act 1974
In January 2013 changes were made to this Act following an EU Directive on Additional Assumptions for the Calculation of the Annual Percentage Rate of Charge on Credit Agreements (EC Directive 2011/90/EU0)

The Consumer Protection Act 1987
From an EU Directive this prohibits the manufacture and supply of unsafe goods making the manufacturer or seller of a defective product responsible for any damage it causes. Think tumble dryer fires. The Act also allows local councils to seize unsafe goods and suspend the sale of suspected unsafe goods and prohibits misleading price indications. The General Product Safety Regulations 2005 (not as part of an EU directive) broadened requirements on safety requirements.

EU Directive 1999/44/EC
People think this is good cause when you buy goods in a shop or online you have the right to a minimum two year guarantee period at no cost. The Consumer Rights Act 2015 actually gives you more rights.

Roaming Charges
The costs were capped in July 2014 and again from 30th April 2016 (excluding VAT for calls, texts and downloading data).

• Roaming data dropped from around 15p per mb to up to 4p plus the domestic price.
• Outgoing calls dropped from around 15p per minute to up to 4p plus the domestic price
• Incoming calls from around 4p per minute to up to 1p plus the domestic price
• Outgoing texts from around 5p per text to up to 2p plus domestic price
• On 15 June 2017 there will be no extra roaming fee within the EU – it will be the same as domestic price

What might happen to these laws if we leave the EU?
Consumer law has improved over the last couple of decades. These have been put in place due to EU Directives but also improving existing laws not due to the EU. It is very unlikely that the Government would repeal any of these laws as 1) It would be very complicated and time/money expensive to unravel and 2) The Acts are improvements for consumers so there would be no reason to undo them and to choose to do so would cause some uproar!

What of any new Directives?
I don’t think it will make the slightest bit of difference to consumer law whether in or out of the EU! May see companies opt out of the roaming charges cap though!

 

 

 

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All you need to know when your phone/energy bill is wrong

It has been in the news a lot recently about Vodafone and their billing mistakes. It moved to a new billing platform and since then there have been masses of reports of serious blunders, such as direct debits incorrectly set up, people being put on the wrong tariff and credit agencies wrongly being told that customers have missed payments. So what if you are one of these customers or indeed if you receive bills of any sort what should you do?

Check your bills
Always check your bills. Check that it is what you think it should be. Then check your bank if you pay by direct debit because there’s always a chance that the company has messed that up! Go back through your statements for months too if you haven’t been checking them.

What to do if you find a problem
Act as soon as you find out. You can ring but you won’t have a record or evidence of what they have said they will do. Recording the call is not a great option because unless they give their permission for you to do this you won’t be able to use it in court should you need to do this. Recording calls and the law. You can use online chat if available. Don’t trust that this will be emailed to you even if they say it will be! Copy and paste the transcript into a document. If you have to ring do so through their free number and follow tips for ringing.

Follow the tips for effective complaining.

Don’t cancel any direct debits. This will confuse the issue and may affect your credit rating.

Taking it further
If you get nowhere with customer services, find the CEO contact details from ceoemail.com and write to him or her. Vodafone CEO contact details. You are highly unlikley to get a response directly from him or her but it will be an escalataion as the CEO will have a senior team to deal with complaints. Make sure you add all the dates and evidence of what was agreed prior to writing to him/her.

If this still gets you nowhere then go to the Ombudsman. There is CISAS and the Communication Ombudsman. Your ‘phone provider will be a member of only one of these schemes and you will need to check to see which one. You must ask for a letter of deadlock or wait until 8 weeks has passed since your inital complaint.

Energy bills
Same advice with energy bills. Go to the Energy Ombudsman after following the advice above.

Your rights
Under the Consumer Rights Act 2015 you are entitled to services that are carried out with reasonable skill and care and therefore if the company messes up your bills this is not reasonable skill and care. The company must put you back into the position you were in before the mistakes arose. So for example, if you incurred additional expense such as having to ring the company repeatedly then you should add this to your claim. (Generally speaking, unless excessive, you aren’t entitled to redress for time taken on the matter).  If your credit rating has been affected the company must also correct this.

If mistakes are made by the company then you can and should argue that under the Consumer Rights Act 2015 the company is in breach of contract so therefore if you want you can terminate early without paying the penalty.

Regulatory bodies
Ofcom is the regulatory body for phone providers. It cannot investigate individual complaints. However,  you can inform them of problems and if a significant number of people do this regarding the issue then it will investiagte and take action. Ofgem does the same for energy companies.

For more information on how to complain to ‘phone providers and others see Tips and the book and keep up to date with consumer news with the newsletter.

 

 

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Retailer in administration – your rights

BHS your rights when a company goes into administration

 

With the news last week of BHS going into administration following close behind Austin Reed, I thought it would be useful to provide details on your rights.

 

Gift vouchers

  • If the voucher is for any amount over £100 and was paid for by credit card then you have protection from the credit company under Section 75 of the Consumer Credit Act.
  • It is possible that if you paid through your bank you could get your money back through Cashback. This is a voluntary scheme and you will need to check with your bank.
  • If the company is taken over by another one it does not have to honour the voucher but always worth checking. They may well be of the opinion that if they honour the voucher that you will return and if they don’t you will not go there ever and tell your friends so!
  • If you have bought your vouchers through a third party website it is worth contacting them. They do not legally have to refund you the money but they may as a goodwill gesture.
  • If the company isn’t honouring vouchers contact the administration company as soon as possible. You will be added to the creditors list, along with staff wages, the taxman etc., so it is highly unlikely that you will get your money but you have no chance at all if you don’t register your interest!
  • Keep hold of your vouchers. Even if the company goes into an administration a buyer may be found which may honour the vouchers.

Still selling whilst in administration

  • Your rights remain the same. If an item has become faulty you are covered by the Consumer Rights Act 2015. However the administrators may just add you to the creditors list.
  • You have protection from the credit company under Section 75 of the Consumer Credit Act if you bought the item on a credit card and the item was more than £100.
  • It is possible that if you paid through your bank you could get your money back through Cashback. This is a voluntary scheme and you will need to check with your bank.
  • The administrators will want to raise as much cash as possible so will continue to sell goods if trader is a retailer. This is where you may find some bargains and if you buy online you should still be able to return within 14 days under the Consumer Contracts Regulations. 
  • Remember though, that if any item you buy becomes faulty you may well not be able to return it if no buyer is found for the retailer!

Half way through a purchase or service

  • If you have ordered a conservatory and it is half built, you might well be stuck. It will be down to the administrators as to whether they will honour the rest of the work or whether you join the creditors.
  • If you have bought an item it may depend on where your purchase is in the system and what the administrators decide to do.
  • See above for claiming from the credit card company or bank. You may also be able to claim for finishing off the work.

Move quickly

  • Soon as you hear a company may be in trouble use your gift vouchers.
  • If you have had that broken item ready to return sitting around waiting to be taken back do it soon as possible.
  • If you need to register as a creditor do it quickly. Remember though that you will be very low down the list and if you do get anything back it will be a percentage of the amount. Some administrators will see giving the majority of people a small return rather than fewer people a large percentage as a fairer way of spreading the money left.
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All you need to know about roaming charges

What are roaming charges?
Roaming charges are put in place when the network detects that you are abroad and extra rates on top of what you normally pay. Charges for making calls, receiving a voicemail, picking it up, sending and receiving texts and pictures and of course using the Internet and downloading or streaming.

Isn’t the EU doing something about this?
Sort of. Slowly. In 2007 the European Commission says it started to tackle reducing roaming tariffs when travelling in the EU. It has been progressively capping the maximum amount a mobile ‘phone provider can charge for services in Europe. On the 15th June 2017 they will end completely.

What are the capped charges?
Remember this is only for countries in the EU. The costs were capped in July 2014 and again from 30th April 2016 (excluding VAT for calls, texts and downloading data).

• Roaming data dropped from around 15p per mb to up to 4p plus the domestic price.
• Outgoing calls dropped from around 15p per minute to up to 4p plus the domestic price
• Incoming calls from around 4p per minute to up to 1p plus the domestic price
• Outgoing texts from around 5p per text to up to 2p plus domestic price
• On 15 June 2017 there will be no extra roaming fee within the EU – it will be the same as domestic price

These price caps are the maximum permissible prices. Operators are free to offer cheaper rates, so keep an eye out for better deals.

What about outside of the EU?
No laws for capping those charges.

Consider buying a SIM in the country in which you are travelling as this may be a better alternative.

Contact your provider to see what offers they have for packages for using your phone abroad.

What can you do to keep charges down?
1) Since July 2014 you can use a different provider. You can have a contract with one operator, for national services, and another with a separate operator, for roaming, so check if this may be a better option.

2) Use free Wi-Fi wherever you can! When out and about make use of any free Wi-Fi, saving picking up voicemails for example.

3) If you’re not using Wi-Fi, avoid using data-heavy activities such as watching videos, updating social media with photos or downloading music. If you are checking emails, avoid opening large attachments.

4) Most providers now offer roaming add ons at a discounted rate which may be worth purchasing. So this allows you extra allowance at no further charge. Depends how much you think you will use your phone abroad. Check with your provider before you go as to how these work and that they apply to the country you are visiting. Also confirm when they will be activated on your account.

5) Switch off the data roaming facility on your phone and put it back on when you actually know you want to use it. If you don’t do this before you leave the UK, your smartphone will automatically seek out an internet connection when you reach your destination and you may start using data without realising it. Make sure that functions such as wifi assist have been also been turned off as they put you on the network without informing the user.

6) Check with your provider that you can turn off voicemail if you don’t think you will need it and be sure to put it back on when you arrive back.

7) If you think you will need to use your phone at sea, check with your provider before you travel how much it will cost to use your phone via a satellite connection.

8) If your ‘phone is stolen whilst you are out of the UK, you could be liable for any charges that get racked up. Contact your provider as soon as possible to avoid facing high charges as a result of unauthorised use. If you are with Three, Virgin Mobile, Vodafone, EE or O2 for mobile services, you should only be responsible for paying up to a maximum of £100 for any unauthorised usage outside of your allowance so long as you report the loss within 24 hours. Also check any mobile insurance you have that may cover this.

9) Explore buying a local pay-as-you-go SIM card when you arrive. You’ll have a different ‘phone number but you will only pay local prices. Roaming charges will still apply if you want to make a call or send a text back to your home country using a local SIM. Check with your operator to make sure you can use another SIM with your ‘phone.

10) Check that the country you are visiting is covered by the EU cap! Turkey, Northern Cyprus and Egypt are all popular destinations that are outside the EU. Charges in Switzerland also vary on a network to network basis.

Your rights
1) All mobile operators have to apply a cut-off limit once you have used €50 (excluding VAT) – around £36 – of data per month, wherever you travel in the world unless you choose another limit.

2) The provider must send you an alert to your phone when you reach 80% and then 100% of the agreed data roaming limit. Operators must stop charging for data at the 100% point, unless you agree to continue to use data.

3) Under the Consumer Protection from Unfair Trading (Amendment) Regulations 2014 the retailer must ensure the customer understands what goods and services are being provided and ensure that there are no hidden costs. If the paperwork does not comply with the new requirements the consumer may not have to pay. When retailers send you email confirmation of the purchase this must now include a full description of the goods and services purchased including their characteristics and the full price including tax and any additional charges or delivery prices.

4) Under the Consumer Rights Act 2015 traders must also provide services with reasonable skill and care.

How to complain effectively
1) Check and see if the company is in breach of any of the above.
2) If so, contact the company in writing not ‘phone.
3) See Top 20 tips on how to complain and How to Complain: The Essential Consumer Guide to Getting Refunds, Redress and Results for more information, advice, tips, guidance and template letters for complaining effectively.
4) If not happy with the response email the CEO using ceoemail.com to find the address.
5) Threaten to take the case to the Ombudsman. Check whether your provider is a member of CISAS or Ombudsman Services and take your case there. You can use the ombudsman after 8 weeks since your first complaint or request a letter of deadlock.

Ombudsman Services says that almost 30% of complaints they receive about mobile phone services are about billing and data roaming. It’s often the case that customers do not fully understand the implications of opting out of the cap or read the notifications so it asks for proof from providers they have been sent.

Those they take on generally fall into one of the following categories:

 *   disputed data roaming charges or “bill shock”;

*   service failures while roaming; and

*   a company failing to cap a customer’s usage or send usage notifications.

It says, “If the provider has followed the rules then the customer usually has to pay. It is sometimes possible to get the provider to reduce the bill, but there is no compunction on them to do so.”

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