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ADR Ombudsman Laws

Energy ombudsman shows how to keep heat on your supplier

Chief Ombudsman helps you get best result from the process

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How to get the best result from an ombudsman

I often hear from people how they think an ombudsman hasn’t been fair or impartial in their case. Most frequently I hear the criticism that the ombudsman always sees in favour of the trader because the trader pays for membership. This is not correct. Nor is it correct that an Ombudsman is a consumer champion. An Ombudsman is impartial. See more at 5 myths about Ombudsman providers busted

I’ve asked Lewis Shand Smith the Chief Ombudsman at Ombudsman Services to share the traps people fall into and how to make a stronger case when submitting their issue. He looks at energy in particular but the points are valid for all sectors.

Common ways consumers go wrong in bringing a case to an Ombudsman

Sometimes, people approach the ombudsman with issues outside of their remit. Typically:

  • The complaint has been made too late – complainants have 12 months from the date the supplier issues its final response (known as a deadlock letter) to raise the issue with the ombudsman.
  • The complaint has been made prematurely (less than 8 weeks from the initial complaint or no deadlock letter received) – complainants need to raise the issue with the supplier and give them an opportunity to put things right before the ombudsman can become involved.
  • The trader does not participate in the ombudsman’s scheme.
  • The complaint is about a product or service which does not fall inside the ombudsman’s jurisdiction.

So, you have your issue, it falls within the remit and you still don’t get the decision you wanted so what do you do?

Submitting cases to an Ombudsman service

Ombudsman Services receives complaints in a variety of forms. There are complaints the energy supplier would have resolved if the right person had picked it up. There are complaints where the parties agree on the facts – but disagree on an appropriate remedy. There are complaints where the parties fundamentally disagree on the facts. And there are complaints where neither party has yet been able to understand what happened.

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).

These figures suggest that the majority of complaints needed Ombudsman Services intervention to ensure a fair remedy for the consumer. But many could have been resolved without Ombudsman Services’ help. In most cases, the complaints reached Ombudsman Services because of a failure in the energy supplier’s complaint handling. But some could have benefited from better complaining from the consumer – or the consumer accepting a resolution that was already fair.

Reasons for not getting desired outcome

So, below are some common reasons why consumer actions mean a complaint is not resolved with the energy company – along with some advice on how not to fall into the traps.

5 top tips for ensuring you have the best case if you need the ombudsman on picture of electricity pylon

Focusing on the problem, not the solution

It is very easy to focus on what went wrong and how it should never have happened. But a complaint normally only ends successfully when the wronged party focusses on what needs to be done to put things right. So, before you complain, think about what you would like your supplier to do to resolve your complaint – and let the supplier know.

Disbelieving accurate responses

When things go wrong, people lose trust. So people often lack confidence in energy company’s answers. It can be worth seeking advice online or from friends and family. This can sometimes provide the reassurance consumers desire without the need for an ombudsman investigation.

Unreasonable expectations / asking for bills or balances to be wiped

Energy suppliers do offer financial awards – but they are normally goodwill gestures to acknowledge what went wrong. Energy suppliers rarely relate awards to the size of a consumer’s outstanding balance.

Ombudsman Services applies similar principles in our complaint handling. Customers should pay the correct amount for the energy they have consumed. If something has gone wrong and a financial award is due – the amount will be proportionate to the trouble the consumer experienced – not the outstanding account balance.

Failing to engage with an energy supplier

Poor energy supplier responses can leave consumers feeling that the problem won’t be resolved without help. But Ombudsman Services can only help after a consumer has tried to resolve the problem with the energy supplier direct for several weeks. As frustrating as it is, consumers should plug away with the energy company. Be clear about what the problem is and what needs to be done to put it right. Do it in writing otherwise it is one word against another and the Ombudsman makes decisions on evidence.

Check out 20 Top Tips for complaining effectively to increase your chances before needing the Ombudsman. Hopefully someone at the energy company will understand the complaint and correct the problem. This will mean a far quicker resolution than if you go to the Ombudsman.

Becoming too invested in the complaint

If a consumer feels they’ve been wronged, they’re likely to tell people about it. Sometimes it turns out that the consumer is at fault, and in such circumstances, it can be difficult for consumers to admit their error to other people on the complaint journey. They can reach for excuses and/or change the substance of their complaint so as not to lose face. This rarely leads to success and escalating to Ombudsman Services can sometimes prolong and increase the disappointment. If a consumer realises that they are wrong, there is sometimes value in not continuing the complaint.

If consumers feel wronged they should always complain; but they should do so in a focused way and seek a proportionate outcome.

Further help with energy complaints

Electricity pylon Everything you need to know to complain about energy problems

 

See All you need to know to make a complaint about energy for advice, tips, information and consumer rights regarding energy complaints.

 

 

Ombudsman website for Energy complaint advice and cases. 

Alternative Dispute Resolution

ADR – all about it for World Ombudsman Day

Lewis Shand Smith Biography

Lewis Shand Smith was appointed Chief Executive and Chief Ombudsman of Ombudsman Services in 2009 and retired in 2019. Ombudsman ServiHead shot Lewis Shand Smithces is a not for profit organisation which resolves disputes in the energy, communications, property, and copyright licensing sectors, amongst others. Lewis was also the Chair of the Ombudsman Association. Previously he was the Crown appointed Deputy Ombudsman and a member of the Executive Board at the Scottish Public Services Ombudsman (SPSO). He is a priest in the Scottish Episcopal church and has served several congregations in Motherwell, Shetland and Dumfries. He was a Canon of St Andrew’s cathedral in Aberdeen. From 1990 to 1999 Lewis was a member of Shetland Islands Council, becoming Convener/Leader in 1994. He has served as a non-executive director or trustee with a number of companies and charities. He is a former Vice President of the Convention of Scottish Local Authorities, was a member of the Executive of the Scottish Constitutional Convention, and represented the UK on the European Committee of the Regions.

Further help

 

For tips on writing that initial complaint see Top 20 Tips How to Complain!

Cover of How to Complain updated 2019 large cow logo

 

For information, advice, consumer law and template letters GET THE BOOK! How To Complain: The ESSENTIAL Consumer Guide to Getting REFUNDS, Redress and RESULTS!

 

 

 

101 Habits of an Effective complainer book cover with logo

 

 

101 Habits of an Effective Complainer provides you with more tips

 

 

The Complaining Cow logo download templates

 

 

Purchase and download templates to gain redress swiftly.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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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