5 myths about Ombudsman providers busted

Ombudsman separating the truth from the myth

Alternative Dispute Resolution providers which include ombudsmen, provide services for business and consumers. When you can’t get your complaint resolved and the trader is a member of a scheme you can take your complaint to an ADR provider. Alternative Dispute Resolution: What it all means

In April 2018 the Government produced some research, Resolving Consumer Disputes. The findings included “…in cases where the ADR provider decided in favour of the consumer 83% of consumers perceived the process to be fair. This dropped to 17% in cases where the decision was in favour of the trader or a compromise. A similar, but less extreme, variation was seen for consumers who had used the courts (90% v. 53%).” Not exactly surprising.

lots of images of people shaking hands

The myths about ADR

Being in the world of consumer rights and stuff I talk about this area a lot. However, so often I hear the same inaccurate assumptions and beliefs from members of the public, including journalists. Sometimes these come from personal experience, sometimes guesses, sometimes from inaccuracies reported in the media and sometimes from I don’t know what! There are a lot of issues with the sector but these are mainly to do with oversight of the approval.

But here I am going to bust a few of those popular myths and hope it helps make things clearer! I’m using the term Ombudsman for ease but ADR provider is still the same in terms of these myths. (However, an Ombudsman has to be members of the Ombudsamn Association which has higher standards than for non members as shown by their minutes of a meeting revoking the Retail Ombudsman’s membership. See The Retail Ombudsman is no more and the minutes in appendix  J of More Ombudsman Omnishambles.

1) Ombudsman are consumer champions

Nope. A consumer champion will fight for the consumer. An ombudsman is an unbiased service. Each case is looked at individually and decisions are made on the evidence provided.

2) Ombudsmen are paid by the traders so will always see in their favour

Nope. The traders pay yes. The alternative would be for consumers to pay at least a proportion! The traders pay a yearly fee plus a case fee. If the case goes to arbitration then in some cases, such as with the Furniture Ombudsman and an independent inspection is required, the trader pays for this too. Therefore it is actually in the traders’ interest to try and resolve the matter and for it not to go to the Ombudsman. If you look at providers’ annual reviews you will see the breakdown of percentages of cases won by trader etc. If the consumer were made to pay as well you might as well go to court and these schemes are there to provide an ALTERNATIVE! An Ombudsman service gets paid the same win or lose so there is no incentive to find in favour of either party.

As an example:

In the period November 2016 to October 2017, Ombudsman Services closed 49,117 energy complaints. Of those, it helped resolve 8% without investigating because the energy company was willing to provide the consumer with their desired resolution.

Of the complaints that Ombudsman Services investigated, it:

  • upheld 66% (finding that the energy supplier had done something wrong and had not done enough to put it right).
  • maintained 26% (finding that although the energy supplier had done something wrong, it had already offered a fair resolution to the customer).
  • did not uphold 8% of complaints, (concluding that there was no substance to the original complaint and the energy supplier had treated the customer fairly).

3) All ombudsmen are funded by Government

Nope. All providers in the non-regulated sector, such as furniture and airlines are funded by the industry. Providers in the regulated sector such as the Financial Ombudsman, energy and telecoms are also funded by the industry so that services are free to consumers. Others, such as  the Local Government Ombudsman are funded with public funds.

4) If the trader doesn’t want to pay up it won’t

In the regulated areas of finance, energy and telecoms if a trader doesn’t abide by an ombudsman’s decision then it will be reported to the regulator. Financial Conduct Authority, Ofgem and Ofcom. They will investigate and if found to be in breach of the rules can be shut down. In the non-regulated areas if the trader doesn’t abide by a decision they will be expelled from the scheme. The rate for non compliance is very low.

ADR scheme Year No. Reason for expulsion
The Motor Ombudsman 2016 3 2 Non-cooperation with scheme, 1 with outcome
The Motor Ombudsman 2015 8 Non-cooperation with scheme
The Furniture Ombudsman 2016 0 N/A
The Furniture Ombudsman 2017 1 Non compliance

There are however issues with compliance in the aviation sector, particularly with AviationADR members. See more details in More Ombudsman Omnishambles and Landing in Court with Ryanair.

5) There are lots of people who have gone to court when not happy with Ombudsman decision

If the Ombudsman doesn’t see in your favour it doesn’t necessarily mean it is wrong. It could be that you didn’t provide enough evidence and the same could happen in court. See Energy ombudsman shows how to keep heat on your supplier for an article from the Energy Ombudsman on how best to present your case.

The court option always remains open to you. But actually very few people do this. An ombudsman will usually be open to looking again at any case if you have more evidence. A judge can only look at evidence. There are cases where people go to the Small Claims Court, but often these don’t get reported accurately in the media which is misleading. For example, one recent case was reported in the media as the judge seeing in favour of the consumer where the ombudsman hadn’t. Actually it was because the trader didn’t attend and so a default judgement was made.

There are issues with ADR

Yup. Not a myth!

Westminster Business Forum seminar Next steps for consumer protection in the UK – dispute processes, enforcement and the consumer markets green paper. 15/11/18 Alternative Dispute Resolution – approval and oversight in the loosest possible sense of the words…

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 include links to reports (Ombudsman Omnishambles and More Ombudsman Omnishambles in particular). They also link to articles from Which? and The Independent that describe a number of problems which are not the fault of providers and provide  warnings about one provider, Consumer Dispute Resolution Limited run by Dean Dunham which runs RetailADR, UtitlitiesADR and AviationADR.

man talking to couple

 

Ask the Ombudsman: Kevin Grix CEO Dispute Resolution Ombudsman & The Furniture Ombudsman

Kevin Grix writes a guest blog post

Shopping

It seems that we are a nation built upon a love for retail therapy. Shopping on the high street is an ever popular leisure activity and even when we are relaxing at home it’s possible to purchase via our laptops, tablets and smart phones with delivery direct to our doors.  There are always issues such as Sunday trading hours, online shopping, deliveries and the impact of a ‘Brexit’ on the high street  in the news, helping to illustrate the impact that shopping has on our daily lives.

All of us are consumers and at one point or another it’s inevitable that we’ll feel let down with a product that we have purchased or a service that we have received.

Billions of transactions take place each year – tills ring out across the country from Monday to Sunday and shoppers walk away happy most of the time. And so, it’s helpful to keep things in perspective.

What are the Dispute Resolution Ombudsman and The Furniture Ombudsman?

The Dispute Resolution Ombudsman (DRO) incorporates The Furniture Ombudsman. Established in 1992 it is a Government approved not-for-profit Ombudsman scheme that has been providing independent dispute resolution services to consumers and retailers for over 25 years, making it one of the oldest and most important Alternative Dispute Resolution (ADR) services in the country.

What do TFO and DRO deal with?

During all these years we have helped to resolve tens of thousands of problems with all sorts of goods and services.  Our members include most of the largest high street retailers in the country and lots of independent stores too, making our jurisdiction across thousands of retail outlets – the widest of its kind in the United Kingdom. Traders, customers and consumer champions like the Complaining Cow Helen Dewdney, trust us because of our heritage, independence, and the work that we do to raise standards.

The majority of the issues that we see are often limited to expensive big ticket purchases; furniture, kitchens, bathrooms and other home improvement installations. We can investigate disputes involving all sorts of other smaller value retail goods and services (and sometimes we do), but there isn’t usually much need for us to get involved. Why? It’s probably because smaller faulty items are more easily returned by the customer to shop in exchange for a suitable remedy such as a repair, replacement or refund – and that’s what usually happens.

Generally speaking, responsible retailers are good at putting things right for their customers if things go wrong – and thankfully, many of those retailers subscribe to our scheme which gives us the power to put things right if they do go wrong.  It’s worth remembering that retailers have been trading for several hundred years. Way back in the early 1900s, retail pioneer Harry Selfridge was attributed with the quote “the customer is always right” because he knew how important it is to keep them happy, to reward their loyalty, and encourage repeat custom.

Independent Reports

When a case comes to us, we may undertake an independent report. This will determine if the fault lies with the company or not. The company pays for this and the whole service from start to finish is free to consumers. It is a myth that Ombudsmen see in favour of companies because they pay to be a member. Companies pay to be members and per case.

5 Top Tips for preventing problems when shopping

But things sometimes do go wrong and here are five of my top tips on  what you can do to limit the risk of that happening – and what you can do to put it right:

  1. Make sure the goods or services that you are considering purchasing are going to be right for your needs, especially if it’s an expensive purchase – do your research and shop around.
  2. If you feel that you need to complain, understand what your rights are and be realistic about what you are entitled to receive from the trader to put it right. There are some great consumer law resources available to buy or to download online.
  3. Tell the trader why you are unhappy and what you would like them to do about it. Try using a reliable template to write an effective letter or email. This will help you to keep things clear and orderly.
  4. If you are buying furniture or other home improvement goods or services such as a kitchen, bathroom or flooring, always shop with a member of The Furniture Ombudsman because if things do go wrong you will have free and independent redress.
  5. If the goods or services that you’re purchasing aren’t furniture or home improvements check to see if the trader is registered with Dispute Resolution Ombudsman because if things go wrong with those you will have free and independent advice.

Alternative Dispute Resolution

Alternative Dispute Resolution (ADR): What it all means post that explains what it is all about and how you can use it.

Government and regulators continue to fail on resolving consumer disputes this post describes how government funded bodies are failing to regulate the non regulated ADR sector. Links to other posts and reports.

Landing in court with Ryanair warning about using AviationADR when dealing with aviation complaints

Energy ombudsman shows how to keep heat on your supplier a  guest post from the Energy Chief Ombudsman outlining how to ensure you get a satisfactory response when you submit a case to an  Ombudsman.

Ombudsman Omnishambles article in Cabinet Maker regarding approval and oversight of the ADR sector.

Ombudsman Omnishambles and More Ombudsman Omnishambles the research reports looking at how some ADR schemes such as the one run by Consumer Dispute Resolution Limited which used to run The Retail Ombudsman and lost the title.

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…

Kevin Grix bibliography

DSC_4166smlfileB&W

Kevin graduated from a law degree, prior to studying to be a Barrister in London, at the Inns of Court School of Law. He was called to the Bar by the Honourable Society of the Inner Temple, after successfully passing his Bar exams and is also professionally qualified by the Chartered Institute of Arbitrators (CIArb).

Kevin is a freeman of the City of London, Liveryman at the Furniture Makers’ Company, and represents the Ombudsman on the All Party Parliamentary Group for furniture at the Houses of Parliament. He is a member of the Chartered Trading Standards Business Members Group, and sits on the executive committee of the Ombudsman Association and the advisory board at the Independent Football Ombudsman.

More on Kevin here.

image001