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

 

Freezing energy problems? Your rights all you need to know

snow high up from ground to treets

Left out in the cold by your energy company? All you need to know about your rights

Well this is a Winter and a half isn’t it? Quite incredible. It is inevitable that many people will have had problems with their gas or electricity supply We just had a bit of emergency with the water tank too! So, in exceptional circumstances such as this weather, what are you rights?

I think one has to be aware that these are truly out-of-the-ordinary circumstances and to understand that energy companies are not going to be able to get to customers as quickly as they would normally. They have both the significant increase in call outs, but also it is as difficult for their repair people to get to you as anyone else driving. With all the accidents and deaths caused in this weather I do think we need to be aware of that. None of us would want someone to risk their life to fix our boiler, I’m sure.

However, companies should be doing all they can. They should have more staff in place during the Winter months and have emergency plans in place to deal with increased enquiries at times like this. You do still have rights and can claim for lack of gas or electricity supply and lack of service.

Your rights with weather-related energy problems on electricity pylon

Vulnerable Customers

Energy customers who are vulnerable (and usually you need to be on the company’s list as such) will take priority for any loss of supply or repair.

If you are struggling to get in contact with your provider, keep a note of all times you called, tried the website etc., as evidence to use in a complaint at a later date.

Cut in supply

In the case of a cut in your gas or electricity supply, it is your distributor, not the supplier, who is responsible. You can find out who your gas transporter is here and electricity supplier here. Complain to them if necessary.

In the event of an unplanned power cut you are entitled to set amounts of compensation. For electricity this varies depending upon the number of homes affected, how long you are without supply and how Ofgem categorises the storm.

In an unplanned power cut you are entitled to set amounts of compensation. For electricity this varies for the amount of homes affected, how long you are without supply and  how Ofgem categories the storm.

From the Ofgem website:
Service Guaranteed Standards payment
Supply restoration: severe weather
The time you are off supply before being able to claim varies according to severity of storm. This is because
the companies will have more work to do to fix faults.

Storm category 1: After 24 hours
Storm category 2: After 48 hours
£70 for domestic and non-domestic customers.

A further £70 will be paid for each additional period of 12 hours in which supply is not restored, up to a cap
of £700 in total.

This applies to both storm category 1 and storm category 2

More on  power cuts (e.g. multiple cuts) can be found on Ofgem Know Your Rights Power Cuts page.

For gas you will be paid £30 plus £30 for each 24-hour period without gas. See 1 little Known Fact You Need to Know When Your Gas is Cut Off!

If you are on the Priority Services Register or a cut was due to bad weather you SHOULD get the payment automatically. Keep an eye out though and claim if you don’t receive it.

You should be paid with 10 days of the end of the power supply cut if automatic and within 10 days from any claim. If not, make sure you get the extra £30 entitlement for that breach of the Standards.

Also useful to know… if you have more than 4 power cuts in one year you are entitled to £75. (The year runs from  01 April to 31 March).

Services

Energy companies are covered by the Consumer Rights Act 2015 and so you are entitled to services to be carried out with reasonable skill and care.

Cold weather payment

This is different to the Winter fuel payment. If you receive certain benefits and the temperature was forecast to be or is zero degree celsius or below for seven consecutive days you will receive £25 for each 7 day period between 1 November and 31 March. You can check if you are eligible and whether you will receive the payment (you do not need to claim it will be automatic) on the Government Cold Weather Payments page. Details for how to claim if not received are also on the site.

Boiler and heater breakdowns and cover

You will need to check your policy. But in general if the company has been unable to undertake the repair you should be able to employ another tradesperson to do the work. British Gas for example has said that “some Homecare polices will cover reimbursement for work we are not able to do which is then done by a third party, if the work is covered by the policy. Customers should check their policy if they wish to claim for a reimbursement. They will need a VAT invoice from their tradesman in order to claim.”  When SE leaves your elderly aunt without adequate heating for 11 days…  tells the story of what I did to claim when they did that to my aunt!

Other help

See Ofgem Standards of Conduct and Quality Standards for what you should be able to expect from your supplier. If it fails to meet the level of service required it must make a compensation payment. However, note that they do not need to do this if severe weather makes it impossible to restore the supply. See above for this.

See All you need to know to make a complaint about energy for more information including how to complain when a provider leaves a vulnerable customer without supply, about bills and how best to prepare a case for the Energy Ombudsman. See Top 20 Tips How to Complain! should you need to start getting your case together!

Left out in the cold by a rail company? Your rights if you have been affected by train delays or cancellations.

Your rights if your water supply has been interrupted

How to Complain: The Essential Consumer Guide to Getting Refunds, Redress and Results!

 

GET THE BOOK! How To Complain: The ESSENTIAL Consumer Guide to Getting REFUNDS, Redress and RESULTS!