01.Help from above
We explain how ombudsman services operate and how the complaint process works.
Ombudsmen are non-government
who can jump in on your
behalf if you have a bona
fide grievance with a goods or services
provider that you can’t resolve yourself.
They’re funded by the industries they
oversee and their services are free for
consumers. In effect, ombudsmen are
paid to deal with consumer complaints
that the service provider can’t resolve
to the customer’s satisfaction.
expectation is that an ombudsman can
persuade the wrongdoer to do the right
thing. But do they have any real leverage?
For more information about legal issues, see Shopping and legal.
Telcos and finance
The Telecommunications Industry Ombudsman (TIO) and the Financial Ombudsman Service (FOS) look after two market
sectors that generate many consumer
complaints, but both services are making
progress towards realising one of their
central objectives – to persuade telcos
and financial services providers to
improve their own dispute resolution
processes. Year on year, both services
are receiving more complaints, but are
having to become involved less often. Read more about the TIO and the FOS.
And there is evidence that both services
are committed to getting better at what
they do. The FOS hired 62 new people
in 2010-11, increasing their staff force to
348 employees in June 2011. The service
says it’s serious about continuing to
reduce dispute resolution times (the
number of disputes resolved in 60
days or less rose 12% in 2010-11).
Meanwhile, the TIO says telcos are
responding more quickly once the TIO
gets involved, resulting in fewer detailed
investigations. The statistics confirm it
had progressively fewer complaints year
on year in which it has had to intervene.
Most disputes with financial services providers are resolved between
the customer and the relevant bank, credit provider, insurance company
or other financial services provider, with the FOS refereeing from
the sidelines. However, should the FOS step in and make an official
recommendation or determination in your favour, it can require
a financial service provider to:
- Pay you a sum of money
- Waive, vary the terms or release security for a debt
- Repay, waive or vary a fee including interest rates on a loan
- Vary the terms of a credit contract in cases of financial hardship
- Honour an insurance policy claim
Some consumers have told CHOICE
their dealings with ombudsman services
have left them less than satisfied. In
the case of the Telecommunications Industry Ombudsman (TIO), a
conspiracy theorist might say that’s
because its board of directors is made
up of former or current telco industry
managers and executives.
Indeed, ombudsman services are
set up as a kind of outsourced self-regulation.
However, it’s more likely
that consumer frustration stems
from having a poor understanding
of what an ombudsman can and can’t
do. It’s important to remember, for
instance, that ombudsmen can’t provide
legal advice or represent you in court,
and they can only deal with matters
that fall within their terms of reference.
You’ll also need to have tried to settle
the issue before they become involved. More and more, though, threatening to contact an
ombudsman is enough to spur service
providers into fixing your problem.