The Retail Ombudsman is no more

Former “Ombudsman” loses the right to use respected title

Reblogged from http://ceoemail.blogspot.com

Mannequins clothes on in shop text The Tretail Ombudsman is no more
Here’s why

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 and will now operate as a provider of alternative dispute resolution (ADR) services, outside of the ombudsman system.

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 criticised for 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, preferring to use their own internal complaints process or another ombudsman or ADR scheme.

The appointment, regulation and management of private-sector ombudsmen is fragmented, 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 a convicted criminal as its communications director and having as ombudsman an 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…

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

 

Update 21st July 2017

Statement on The Retail Ombudsman by the Ombudsman Association

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

June 2017 Ombudsman Omnishambles Serious unresolved issues affecting
the operation of the ombudsman ADR system in the UK

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

 

Ongoing Ombudsman Omnishambles

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

by Helen Dewdney, The Complaining Cow consumer blogger and author of How to Complain: The Essential Consumer Guide to Getting Refunds, Redress and Results!  and Marcus Williamson 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, then going to court or taking the matter to Ombudsman is seen as a last resort to try to resolve things.

And 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, the new system of privatised Ombudsmen is already causing problems, say campaigners, because of confusion and a lack of oversight.

The new privatised Ombudsmen are appointed by the Chartered Trading Standards Institute (CTSI) and 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 see 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 and ensure that retailers clearly “signpost” their customers to an Ombudsman scheme, if necessary.

  • Issue: There should be just one Ombudsman for each sector, if possible, and avoid having new Ombudsmen for sectors which are already covered

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 to make sure 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 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” , so no-one is overseeing the daily operation of Ombudsmen after they have been appointed.

Solution: CTSI must take a more proactive role in monitoring the behaviour of Ombudsmen and 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, subject, of course, to a due diligence process.

Jo Holland was a certified ADR provider of mediation services but could not continue 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 consumer. 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, which she says 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.

Although, too late for Jo, last month the Minister for Small Business, Consumers & Corporate Responsibility Margot James MP wrote to the CTSI on behalf of the Department for Business, Strategy and Innovation stating 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.

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 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, which 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, 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 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.

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…

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