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Blog: The £37 billion cost of poor service

Blog: The £37 billion cost of poor service

Our fourth annual Consumer Action Monitor is out today, once again taking the temperature of consumer sentiment across the UK.

This year for the first time we have calculated the cost of poor service to businesses - over £37 billion - with more than a quarter (28%) of consumers spending less with a company or taking their custom elsewhere after receiving poor service.

This cost demonstrates that some consumers are choosing to vote with their feet and leave brands that do not provide them with an acceptable standard of consumer service. The Retail sector is bearing the brunt of this consumer backlash, to the tune of over £10 billion, followed by Banking and Financial Services (£5.80 billion) and Transport (£5.51 billion).

Rail ranks poorly for consumer sentiment, as long-term and highly publicised problems in the sector have left one in five (20%) resigned to poor service. Complaints have increased by 30 per cent, and in this sector many consumers do not have the option of switching provider, which leaves them feeling disillusioned.

Despite some consumers showing they are willing to take action if they are being let down by a company, there are many more who are sweeping their complaints under the rug. Our research shows that a further 75 million issues were ignored due to apathy and long-term disillusionment with businesses.

Of those who experienced an issue but did not complain about it, more than a quarter (28%) simply could not be bothered and 44 per cent said it's too much hassle. Significant numbers said they do not believe companies listen to consumers (19%), which is indicative of broader dissatisfaction with the business sector as a whole.

At the moment, consumers feel that complaining is often a waste of their time, because they see no change in the behaviour of big business. By putting consumers at the heart of what they do, businesses can prevent consumers from taking their custom elsewhere, which is good for both parties.

As we move towards leaving the EU it is critical that protection for UK consumers remains, but it could also provide an opportunity to enhance and improve what’s already in place. It’s crucial that consumers continue to feel empowered to raise complaints, that those complaints are handled well by providers, and that there’s easy access to an ombudsman where the customer remains dissatisfied.

We have no doubt that there will continue to be an increased call for dispute resolution and redress – particularly with the renewed focus on Responsible Capitalism – but the sooner ombudsman schemes are seen as the mainstream option, the sooner consumers and businesses will realise the benefits.

Lewis Shand Smith
Chief Ombudsman, Ombudsman Services

Published February 2017