How ombudsman services can help you
We explain how ombudsman services operate and how the complaint process works.
Independent conciliation
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?
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, merely threatening to contact an ombudsman is enough to spur service providers into fixing your problem.
Telcos and finance
The 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.
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.
What the ombudsmen can and can't do
Financial Ombudsman Service | Telecommunications Industry Ombudsman |
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1300 78 08 08 |
1800 06 20 58 |
32,307 disputes received in 2012–13, down 11% from 2011–12 |
158,652 complaints in 2012–13, down about 18.1% from 2011 |
Funded by financial services providers (FSPs) who are FOS members. ASIC requires that all FSPs have an external dispute resolution process, although not all are FOS members. |
Funded by telcos. All businesses that provide or re-sell telecommunications services to consumers or small businesses are legally required to join the TIO. Providers are charged by the TIO per complaint if it investigates. |
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Don't call them about:
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Dispute deadlines
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Need more help? The CHOICE Help service is free for CHOICE members. Our consumer advice experts will help you understand your rights and guide you in the right direction.