How can ombudsman services help you?

Ombudsman services can't do everything, but they're getting better at what they can do.
 
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01.Help from above

ombudsman-lead

We explain how ombudsman services operate and how the complaint process works.

Ombudsmen are non-government intermediaries 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. 

The 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.

FOS payback

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

Limited powers 

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.

 
 

 

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