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ADR Ombudsman Business Latest News

Complaining customers warm to responsive companies

Every year Ombudsman Services produces its Consumer Action Monitor. It undertakes research with consumers regarding complaints. This year it looked at the impact of Covid 19 on consumer complaining habits during March and September in 2020.

Figures released today (9 March 2021) by Ombudsman Services in its Consumer Action Report 2020 reveal that 83% of respondents agreed that a “Well-handled complaint increases my loyalty to a provider”.

Loyalty and complaint handling

10,149 consumers were asked about complaining to energy and telecom providers but it is likely that this would apply to other companies of all sizes too. Companies would do well to take heed of the findings. With it costing at least 5 times as much to gain a new customer as it does to retain one it is a very ignorant, arrogant, naïve or complacent (or mixture of any of the 4) company that does not pay attention to the value of good customer service.

From the Consumer Action Monitor 2020:

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A well-handled complaint is one where the customer has been shown empathy, listened to, understood, treated fairly and given a satisfactory response in a timely manner. But it is widely known that the telecom and energy sectors are the worst for doing any of these things!

During March to September 2020 consumers showed leniency and tolerance to providers, as they complained less than in the preceding year. However, the reasons for this are not fully discussed. For example, it could be that consumers were under stress in other areas and that complaining about a provider was taking a back seat.

Understanding of Alternative Dispute Resolution when needing to complain

There is a huge lack of consumer understanding about Alternative Dispute Resolution (ADR). Only 3% of consumers knew that providers had 8 weeks to resolve a complaint before it could be escalated to an ADR provider, such as an Ombudsman.

The CAM research asked consumers how long they thought companies had to resolve a complaint:

The number of respondents knowing exactly where to take a complaint was a shockingly low 25%. The lack of awareness of ADR and what is does was quite apparent.

Dispute Resolution: What it all means.

The CAM report asked consumers:

It was quite clear that consumers do not know or fully understand the time scales relating to complaints. A huge amount of work needs to be undertaken to raise the understanding of ADR for consumers. The reports Ombudsman Omnishambles and More Ombudsman Omnishambles outlined some problems with the ADR sector in the approval and monitoring of ADR providers and how the current and growing landscape is making things more confusing for consumers.

Vulnerable customers and complaining

The CAM report identified that during 2019 70% of vulnerable customers said that they would rather “suffer in silence” than complain. However, in 2020 this figure dropped. The number of those people identifying as vulnerable also decreased. The report suggests that this may be because of the support measures put in place during the pandemic. Whether these figures change once the support is removed will be interesting to see. I, for one, certainly don’t believe that it is because providers have upped their game and done the right thing in helping vulnerable customers. My 79-year-old mother was told by Sky that “no”, an engineer could not fit her new router and she should get someone to help. Bearing in mind that this was during lockdown, someone coming into the house would actually be breaching guidelines, whereas an engineer would not. Sky was clearly not supporting vulnerable customers in this case.

Green issues

Consumers showed a keen interest in green credentials and used relevant information when deciding a provider with which to contract. 65% of respondents said it was important for their energy provider to have good green credentials and 56% for telecoms. 44% of consumers said that energy and telecom providers must take green issues more seriously. There is, of course, much work to be done to ensure that the information is accurate in this area too.

The future for telecom and energy providers’ customer service

It remains to be seen if complaints from consumers will start to increase as we get through to the end of the pandemic. There could be a lot of movement in the sector as people become less tolerant or expect better deals and more redress in return for their tolerance. Certainly companies have a long way to go in improving service quality, especially for vulnerable customers. Expectations are likely to rise and providers are unlikely to improve quality in line. So, there should be more input from the regulators OFCOM and OFGEM to ensure that they do more to assist customers, especially those who are vulnerable. Consumers clearly expect resolutions to be quicker, therefore regulatory and approval bodies for ADR providers need to do more to raise standards and shorten these time scales, which were set long before emails were the norm!

It will be interesting to see how the green agenda pans out. Will it continue to grow as a factor in choosing a provider or will consumers make more economic decisions post pandemic?

One thing is for sure, energy and telecom providers need to up their game in customer service!

Further information for consumers

All you need to know about complaining to telecom providers

All you need to know to make a complaint about energy

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For more help, advice, tips, information and templates buy  How to Complain: The Essential Consumer Guide to Getting Refunds, Redress and Results!

 

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ADR Ombudsman Business Latest News Transport

CMA steps in where the CAA fears to tread

CMA investigates and takes enforcement action

The Civil Aviation Authority (CAA) should be the regulator for air transport in the UK. However, it is increasingly clear that the Competition and Markets Authority (CMA) is doing the CAA’s job for them.

During the course of this year the CMA has taken action against a number of companies which were not giving full refunds where they were owed due to coronavirus cancellations.

This includes: Sykes Cottages and Vacation Rentals in June, Bijou Weddings Group in September and yesterday (15 December) the announcement that following CMA action, LoveHolidays. The company had committed to pay out over £18 million to customers waiting for money back after their holidays were cancelled due to coronavirus.

CAA: A regulator that fails to regulate

In July the CAA reported on its airline refunds review. A number of airlines were found to be hugely failing in their legal duties and they gave commitments to the CAA to resolve the matters. For example, on 3 July, Ryanair published a set of commitments on its website about timescales for processing cash refunds.

Ryanair confirmed that 90% of its backlog would be cleared by the end of July 2020 with all refund claims made in April to be processed by 15 July and most of the claims made in May to be refunded by the end of July. This statement has not been updated and just a quick glance on Twitter and in Facebook groups dedicated to Ryanair complaints shows that Ryanair customers are still waiting for refunds.Ryanair aeroplane in sky Dean Dunham AviationADR CEDR

Commenting on the review, Richard Moriarty, CAA Chief Executive said: “The airlines we have reviewed have responded by significantly enhancing their performance, reducing their backlogs, and improving their processing speeds in the interests of consumers.

“There is still work to do. We have required commitments from airlines as they continue the job of paying customer refunds. Should any airline fall short of the commitments they have made, we will not hesitate to take any further action where required.”

However, the CAA has failed to take any further action, appearing to believe that no further action is required.

CAA defers but the CMA brings action

It would appear that the CMA disagrees. Today, 16 December, the CMA announced that it was investigating whether airlines have breached consumers’ legal rights by failing to offer cash refunds for flights they could not lawfully take.

The CMA says “The investigation will consider situations where airlines continued to operate flights despite people being unable lawfully to travel for non-essential purposes in the UK or abroad, for example during the second lockdown in England in November.”

The CMA is aware that, in some cases where flights were not cancelled, customers were not offered refunds, even though they could not lawfully travel. Instead, many were offered the option to rebook or to receive a voucher.

How the CMA will work with the CAA

The CMA says that it will be working closely with the UK Civil Aviation Authority as it progresses its investigation.  Its press release continues:

“While the Civil Aviation Authority (CAA) leads on consumer protection in the airline sector, the CMA has undertaken extensive action in connection with cancellations and refunds during the pandemic and is well placed to support the CAA on these issues. The CMA and the CAA continue to work closely and share the same enforcement powers to tackle breaches of consumer protection law.

The CMA will now be writing to a number of airlines requiring information to understand more about their approaches to refunds for consumers prevented from flying by lockdown.

Following a careful analysis of this evidence, the CMA then will decide whether to launch enforcement action against individual airlines.”

CMA forced to act on airlines failures

It is quite clear that the CMA has had to step in and walk where the CAA fails to tread.

Paul Smith, Group Director of Consumers and Markets at the CAA, said :

“It is right that consumer rights are upheld throughout this period and we welcome this investigation from the CMA, which follows our review into airline refunds earlier this year. The CMA has been leading on a broad range of issues arising during the coronavirus pandemic and we will continue to work closely with the CMA in support of this investigation.”

This defensive stance from the CAA makes the regulator appear ridiculous. As the CMA states, it has the same enforcement powers as the CAA. But the CAA has done nothing to enforce anything since their review earlier this year. Airlines continue to flout the law and the CAA appears to have done nothing to ensure that airlines have kept to their June commitments.

CAA compared with other regulators

No other regulatory body needs another organisation to step in to support their enforcement work. The other regulators, such as Ofgem (Energy), Ofcom (Telecoms) or the Office of Rail and Road (Transport) are able to enforce the law themselves.

Future for the CAA and ADR

So, why does the CAA need help? Because it is ineffective and unwilling to take on the airlines face to face. Has CMA simply had enough of watching this farce unfold?

Hopefully this action by the CMA will shame the CAA into taking further action by itself.

It is the job of the Civil Aviation Authority to investigate airlines but it has continued to take no action. The CAA has told me in the past:

“Should any airline fall short of the commitments they have made, we will not hesitate to take any further action where required.”

However, time and time again it has not done so. The CAA has shown itself to be not fit for purpose. Instead it is finding in favour of airlines and continuing to allow them to behave illegally. The CAA has shown itself to be not fit for purpose. The CAA needs to use its enforcement powers to revoke airline operating licenses where airlines do not comply with the law.

Aeroplane in sky with clouds AviationADR Dean Dunham, CEDR, CAA

Further information:

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.

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

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

More Ombudsman Omnishambles report which looked at approval and monitoring of ADR schemes and followed Ombudsman Omnishambles which looks at the failings of regulatory bodies, including the CAA.

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

Ryanair tops CAA refund complaints

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