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The Retail Ombudsman is no more as title is lost

Former “Ombudsman” loses the right to use respected title

Reblogged from http://ceoemail.blogspot.com

 Dean Dunham TRO shop front mannequins

The Retail Ombudsman loses title

The Retail Ombudsman (TRO) is no more. The private company, set up in 2015 to provide dispute resolution for consumers, has lost the right to use the respected title of “Ombudsman”.

The Retail Ombudsman resigns from the Ombudsman Association

TRO has resigned from the Ombudsman Association (OA), its trade body, for reasons that remain unclear. The resignation means that it is no longer allowed to use the “Ombudsman” title. The company is in the process of dropping the title during the course of this week. It will now operate as a provider of alternative dispute resolution (ADR) services, outside of the ombudsman system.

Update 21/07/21 from the Ombudsman Association Statement on The Retail Ombudsman

Companies House rules on using the “Ombudsman” title

Companies House rules stipulate that companies using the “Ombudsman” title must be members of the OA. The OA seeks to ensure the quality of its members through a periodic revalidation process. However, rather than complete the recent revalidation process, TRO resigned just as that process was concluding. Neither the OA nor TRO would comment on the circumstances which have caused the resignation.

The ADR/Ombudsman landscape

Privately-run ombudsman services have been a feature of the consumer landscape in the UK for several years. However, the system has been heavily criticised by consumer groups. It is described as being difficult to use, lacking transparency and not having a single point of contact for consumers.

Many of the largest high-street retailers, including ASDA, Tesco and Morrisons, had refused to co-operate with TRO. They preferred to use their own internal complaints process, another ombudsman or ADR scheme.

Who oversees ADR schemes

The appointment, regulation and management of private-sector ombudsmen is fragmented. It is dealt with through a complicated combination of the Department for Business, Energy & Industrial Strategy (BEIS), the Chartered Trading Standards Institute (CTSI), the Ombudsman Association (OA) and Companies House. BEIS would not comment on TRO’s loss of ombudsman status, instead deferring to the Companies House press office, who in turn have not provided any substantive comment.

Comment on the ADR situation

Marcus Williamson, the editor of consumer information website CEOemail.com, who has been monitoring private ADR since 2014, said: “The behaviour of TRO – in resigning during the OA revalidation process – demonstrates once again that a retail ombudsman role is too sensitive to be handled by the private sector. It is time that retail was given a government-run ombudsman system, in a similar way to the financial sector.”

Williamson – who co-authored the June 2016 report Ombudsman Omnishambles with Helen Dewdney – suggested that TRO’s management had made a number of fundamental errors of judgement in its 2 1/2 years of operation. This included, he noted, employing both a convicted criminal as its communications director and having an ombudsman individual who had breached the Companies Act on multiple occasions. Williamson believes that OA and CTSI should insist on a “fit and proper person” test prior to allowing any individual to take on an ombudsman role.

About Dean Dunham

The Retail Ombudman had been run by Dean Dunham, a solicitor, former restauranteur and former celebrity lawyer, who established TRO in early 2015. He claimed to have 15,000 retail companies as members of TRO and 100 staff, although the company’s accounts filed at Companies House do not support these figures. He also had a regular slot on the London-based LBC talk radio channel, offering consumer advice, and has a Sunday Mirror column.

Westminster Business Forum seminar Next steps for consumer protection in the UK – dispute processes, enforcement and the consumer markets green paper. 15/11/18

Presentation. Alternative Dispute Resolution – approval and oversight in the loosest possible sense of the words…

How approval bodies are failing to properly approve and monitor Alternative Dispute Resolution -

 

Update 21st July 2017

Statement on The Retail Ombudsman by the Ombudsman Association

Update February 2018

The section from the OA’s minutes below is taken from the More Ombudsman Omnishambles report:

“10.The Retail Ombudsman – loss of ombudsman title
At the 102nd meeting of the Ombudsman Association Executive Committee, on 5 May 2017,the committee decided not to revalidate TRO for the reasons shown below. These minutes were online and publicly available until January 2018. They are now in a “members’ only” section of the OA website. In summary:

1) “The ‘pay as you go’ model operated in relation to their ‘Independent members’ resulted in a relationship that did not meet  theOA’s membership criteria.”

2) “TRO did not have significant coverage / market share of the retail sector,”

3) “Concerns about the misleading information that had been provided on the Retail Ombudsman’s website”

4) “Concerns in the information provided regarding their list of members.”

5) “Presentation of non-member logos in their annual report could be misleading”

6) “Been alerted that 33 of the Furniture Ombudsman’s corporate members were at that time incorrectly listed on the Retail Ombudsman website as being Independent Members of their scheme. The Validation Committee had subsequently received correspondence from some of those organisations confirming they had no relationship
with the Retail Ombudsman.”

7) “Awareness of the proliferation activity of the Retail Ombudsman in setting up online and social media presences for other sectors: FinanceADR, UtilitiesADR and CommsADR. The FinanceADR website advertised that they could deal with some complaints that in fact fell within the regulated jurisdiction of the Financial Ombudsman Service.”

8) “Concerns about levels of governance and accountability within the organisation.”

9) “The Executive unanimously agreed that the accumulation of examples of inaccurate and potentially misleading information to the public in relation to their membership and jurisdiction demonstrated that the Retail Ombudsman did not meet the OA’s overall membership criteria of Openness & Transparency, and risked substantial reputational damage to the OA.”

“The Executive did not have the trust or confidence that these issues could be resolved satisfactorily and voted unanimously to propose the expulsion of the Retail Ombudsman
under section 6 of the Association’s Rules.”(Please see Appendix J for  full details).

CDRL statement

A statement placed on The Retail Ombudsman website in July 2017 claims that the decision to transition from ombudsman to non-ombudsman had been taken entirely by Consumer Dispute Resolution Limited:

“CDRL had aspirations to expand its ADR offering, under The Retail Ombudsman brand into sectors beyond high street and online retail. However, last year Ombudsman Association introduced a rule that it would only allow one ‘ombudsman’ scheme per sector which meant that CDRL would not be able to continue its expansion plans as an ombudsman. Naturally, CDRL had to respect this decision.”

However, the OA had written to TRO to outline its position before it resigned.

Ombudsman Association’s position on The Retail Ombudsman

In response to TRO’s statement, the OA responded:

“The OA’s Validation Committee reviewed The Retail Ombudsman’s (TRO) submission for re-validation on 25 January 2017 and on 19 April 2017.

TRO was originally admitted to ‘Ombudsman membership’ of the OA as it appeared on paper that our membership criteria was met, but it was subject to re-validation so that practical evidence of compliance could be demonstrated.

The Validation Committee reviewed the application and the further papers submitted. Following careful consideration the Validation Committee unanimously agreed that TRO did not meet the OA’s membership criteria.

The Validation Committee’s recommendation was considered by the OA Executive Committee on 5 May 2017, and was carried unanimously. TRO was invited to address the next meeting of the OA Executive Committee before a final vote be taken to withdraw TRO’s membership. However, TRO resigned its membership before the final stage of the revalidation process was completed.”

It would appear therefore that TRO resigned, rather than be expelled, as it would have been if it had fully completed the OA’s revalidation process.”

Update 23 August 2018

Landing in court with Ryanair the latest including failures in AviationADR, Which? and The Independent reports on CDRL which runs these schemes.

Ombudsman/ADR reports

Report cover CDRL, CTSI, CAA, OA, Dean Dunham,

 

June 2016 Ombudsman Omnishambles Serious unresolved issues affecting the operation of the ombudsman ADR system in the UK

 

 

 

Crowds of people with report covering OA, CTSI, CA, CDRL, Dean Dunham & others

 

February 2018 More Ombudsman Omnishambles The UK ADR Landcsape 20 months on 

References

Companies House rules on use of Ombudsman title https://www.gov.uk/government/publications/incorporation-and-names/annex-a-sensitive-words-and-expressions-or-words-that-could-imply-a-connection-with-government
(see paragraph 1.86)

TRO members list
https://www.theretailombudsman.org.uk/tro-list/

TRO staff numbers and retail members
https://www.theretailombudsman.org.uk/why-the-retail-ombudsman-is-the-best-adr-choice-for-small-retailers/

Companies formerly run by Dean Dunham
https://beta.companieshouse.gov.uk/officers/yEuzy-BYjZK6erw9hbUGFZ1Y4SU/appointments

Accounts for Consumer Dispute Resolution Limited, trading as The Retail Ombudsman
https://beta.companieshouse.gov.uk/company/09189773/filing-history

The Retail Ombudsman brochure for retailers

 

Categories
Latest News Topical Uncategorized

Ongoing Ombudsman Omnishambles – failures in ADR

A new system for handling complaints is failing consumers, say campaigners 

Reports by Helen Dewdney and Marcus Williamson. Helen is a consumer champion. The Complaining Cow blogger and author of consumer interest publications. Marcus Williamson is a consumer champion and editor of ceoemail.com

ADR, Ombudsman what it all is

The idea of going to an Ombudsman has been part of the British consumer system for many years. If an electricity or gas supplier gives problems, initially you would try to sort the matter with the provider. Going to court or taking the matter to Ombudsman is then seen as a last resort to try to resolve things.

Since October last year consumers have had the chance to take complaints to an Ombudsman for other services, such as retail, furniture and airlines. This new world of private Ombudsmen is run by companies who make money by charging retailers a fee for each complaint handled.

But one year on, campaigners say the new system of privatised Ombudsmen is already causing problems. This is due to confusion and a lack of oversight.

The new privatised Ombudsmen are appointed by the Chartered Trading Standards Institute (CTSI).  Ombudsmen must be members of the Ombudsman Association (OA). However, neither of these organisations seems willing to tackle the slew of problems that has arisen over the last year.

More at Alternative Dispute Resolution: What it all means.

What’s wrong with the ADR sector and how can it be fixed?

  • Issue: There’s no single place for consumers to find which Ombudsman deals with which company. This wastes consumers’ time and causes confusion.

Solution: CTSI should provide a single website listing all the ombudsmen and the sectors that they deal with.

  • Issue: Ombudsmen do not have to list the companies about which they can accept complaints.

Solution: CTSI should dictate that companies must list the companies they deal with. The should ensure that retailers clearly “signpost” their customers to an Ombudsman scheme, if necessary.

  • Issue: There should only be one Ombudsman for each sector, if possible. New Ombudsmen for sectors already covered should be avoided.

Solution: CTSI and OA must prevent new entrants into a sector where an Ombudsman already exists.

  • Issue: There are currently no background checks on Ombudsmen, their staff or contractors. This would ensure that they do not have criminal records or financial problems. One Ombudsman even had, until recently, a convicted criminal working as its Director of Communications. He still works for the company as a consultant. The same Ombudsman, Dean Dunham previously ran a company which went into liquidation owing more than £46,000 to the taxman.

Solution: CTSI must introduce a “fit and proper person” test to ensure that Ombudsmen, their staff and contractors are suitable for this important role.

  • Issue: One Ombudsman runs a “trusted retailer” logo scheme to make additional income. This is a clear conflict of interest.

Solution: CTSI and OA must ensure that the Ombudsman is independent and impartial.

  • Issue: There is no “Ombudsman of Ombudsmen”. No-one oversee the daily operation of Ombudsmen after appointment.

Solution: CTSI must take a more proactive role in monitoring the behaviour of Ombudsmen. It needs to provide a means by which consumers can make complaints about them, if necessary.

  • Issue: Despite the Government consultation where respondents overwhelmingly said they wanted ADR to be mandatory, it is still not. Many traders signpost to an ADR provider as they are legally obliged to do, but do not have to engage.

Solution: Government needs to ensure that ADR is compulsory on traders.

  • Issue: The cost of becoming an approved ADR provider is very high, preventing new organisations from entering.

Solution: CTSI should reduce costs and allow smaller organisations to become Ombudsmen in sectors which do not already have them. This should be subject, of course, to a due diligence process.

Where fees went wrong in ADR approval

Jo Holland was a certified ADR provider of mediation services but could not continue. This was due to what she saw as the excessive and disproportionate fees being charged by CTSI. CTSI charge £750 a day for an audit plus flat fees starting at £2000. ADR providers are expected to offer low cost services which should be free to consumers. The high fees charged by CTSI versus what can be charged for the service to users made the business commercially unviable.

She points out that the fees for a small one or two person company are the same as for a company with over 500 employees. She says this seems unfair. When we raised all these issues, and others, with the Chartered Trading Standards Institute (CTSI) and the Ombudsman Association (OA), we were told that nothing would be done.

The Minister for Small Business, Consumers & Corporate Responsibility is Margot James MP. Her department is the Department for Business, Strategy and Innovation. Although to late for Jo, last month she wrote to the CTSI. She stated that a review had identified a problem with the way the fee regime was structured. The periodic fee had been used to fund certain functions that, whilst legitimate, should not have been funded by ADR providers. She took the decision that each provider should be refunded the £2,000 plus interest which would be paid for by BEIS, the tax payer.

Continued ignoring of issues in the ADR sector

In June 2016 we undertook an investigation and produced a report  Ombudsman Omnishambles Serious: unresolved issues affecting the operation of the ombudsman ADR system in the UK. This was in response to a Government call for evidence. It showed there were many holes in the approvals process for Ombudsmen.

But now, a whole year after the scheme was launched and four months after our report was published, there is still no action from the OA or CTSI.

What the Ombudsman Association said…

“The Association has no role in the internal management or performance of our members or jurisdiction over them with regards to day-to-day operations. Members are re-validated against our membership criteria (at least every 5 years) and can be expelled from the Association if they no longer meet our criteria.”

What the CTSI said…

“On the specific issues raised the CTSI mandate is to check applicant bodies for compliance with the bare requirements of the consumer ADR legislation. Our agreement with BIS does not allow for any widening of these requirements and, as such, there is currently no general ‘fit person’ test.”

The CTSI is funded by the taxpayer through the Department Business, Energy and Industrial Strategy. It is ultimately responsible for implementing the EU law on ADR.

Future of ADR in the UK

In theory, the use of ADR, including an Ombudsman, could offer consumers an effective means of redress and expand successfully into other sectors. It should mean less cost, less stress and should be quicker than going to court.

But until these key issues are resolved, consumers will remain confused. The whole Ombudsman sector is in danger of losing the confidence of the consumers whom it’s supposed to be helping.

There are many issues regarding ADR and Ombudsmen providers. These are to do with the oversight by the approval bodies.

See: Government and regulators continue to fail on resolving consumer disputes and Landing in Court with Ryanair.

These articles discuss the research reports. (Ombudsman Omnishambles and More Ombudsman Omnishambles).

Crowds of people with report covering OA, CTSI, CA, CDRL, Dean Dunham & others

Report cover CDRL, CTSI, CAA, OA, Dean Dunham,

 

 

 

 

 

 

They also link to articles from Which? and The Independent. These describe a number of problems which are not the fault of providers. They provide  warnings about one provider, Consumer Dispute Resolution Limited run by Dean Dunham. CDRL also runs RetailADR, UtitlitiesADR and AviationADR.

Updates on ADR

Westminster Business Forum seminar Next steps for consumer protection in the UK – dispute processes, enforcement and the consumer markets green paper. 15/11/18

Presentation Alternative Dispute Resolution – approval and oversight in the loosest possible sense of the words…

How approval bodies are failing to properly approve and monitor Alternative Dispute Resolution -

A new Chairman started at the CAA on 1 August 2020. But unfortunately the new chair, Sir Stephen Hillier, has been ineffective in tackling airlines that are continuing to break the law on consumer refunds.

CAA launches consultation and tells no-one… launched a consultation on Alternative Dispute Resolution (ADR) but didn’t tell any stakeholders, as Which? calls for a single Ombudsman in the sector.

Ryanair tops CAA refund complaints

Getting help for Coronavirus cancellation claims and shopping help and advice for getting refunds and redress