Ombudsman Services | Sep 28, 2018
Earlier this week we held a fringe event at the Labour Party conference, called Transforming UK Markets to Work for Consumers.
Chaired by Tom Kibasi from the IPPR think-tank, the event focused on how consumer rights and protection should be strengthened and modernised, so that people can buy products and services safe in the knowledge that any problems will be put right.
So what did we learn from our time in Liverpool?
Currently, consumers have different levels of protection and rights depending on the product or service they are buying.
Sometimes, there is a mismatch between the importance of the purchase and the rights the consumer has.
As one of our panellists, shadow housing minister Sarah Jones MP, observed:
“You have more rights if you buy a washing machine than you do if you rent a home” - @LabourSJ on consumer rights (or lack of them) in the private rented sector #OSfringe18 #TransformingMarkets #housing
— Ombudsman Services (@OmbudServices) 24 September 2018
There was a consensus in the room that this imbalance across sectors and industries, which is an issue we highlight in our recent Ending consumer detriment report, needs to be addressed. Matthew Upton from Citizens Advice said consumers just want to know that, whatever they buy, “there is a place (they) can go for redress.”
One thing all panellists and attendees seemed to agree on is that, as things stand, consumers are often unsure of their basic rights when purchasing a product or service.
There is even more confusion when it comes to escalating unresolved complaints in order to get an issue fixed and any detriment resolved.
Shadow business minister Chi Onwurah MP told the fringe event that consumers shouldn’t be expected to have a Law degree or study a 50-page document to be able to understand their rights. This information should be transparent and accessible, she said.
Lewis Shand-Smith, Chief Ombudsman at Ombudsman Services, pointed out in his opening remarks that there are currently more than 70 ombudsman, alternative dispute resolution (ADR) and complaints-handling schemes in the UK.
Standards vary across sectors and industries, he said. In some sectors, such as energy and financial services, there is a simple and clear place to resolve issues. In other sectors it can be confusing or even non-existent, he said.
Again, this is something that we touch in our latest research, which found that more than half (59%) of all purchases made in 2017 were in sectors without adequate levels of consumer protection, meaning £746bn worth of consumer spending was under-protected.
Chi Onwurah identified Brexit and data as two key themes in consumer rights, pointing out that – particularly in online transactions – consumers typically now pay with their personal data instead of money. Data is the new currency and the new property, she said, adding that consumers need to realise this.
Matthew Vickers, chief executive and chief ombudsman designate at Ombudsman Services, was more positive about the power of data. He said that, used properly, data about complaints can be used to help companies and entire industries raise standards and improve customer service.
On Brexit, while Chi raised concerns that “inevitably there will be more disputes as more ambiguities in the law emerge”, Lewis from OS spoke of a “once-in-a-lifetime opportunity” to make the UK a world leader in consumer rights.
All panellists agreed that, in order for ADR and ombudsman schemes to be effective, membership should be compulsory for businesses. An ombudsman should also be truly independent and have the power to impose binding decisions and sanctions.
Kirsty Good from MoneySavingExpert put it succinctly when she said: “Ombudsman schemes mean diddly squat if membership isn’t compulsory.”
Kirsty echoed the point made by MoneySavingExpert founder Martin Lewis in comments to MPs earlier this month, namely that an ombudsman should be the “gold standard” of dispute resolution.
There was a general feeling in the fringe event that voluntary or weak schemes shouldn’t be allowed to describe themselves as an ombudsman, as this devalues the term and the ethos of what an ombudsman stands for.
For all the talk of the need for ombudsmen to modernise in order to stay relevant – an agenda we’re embracing wholeheartedly at Ombudsman Services – there was a consensus that effective schemes play a vital role in the consumer rights landscape.
Chi Onwurah frequently speaks to constituents who are “going through consumer hell” and believes “greater use of ADR has been a really good thing in recent years.”
She added that “having recourse to ADR or a strong ombudsman is really important”, partly because if a complaint ends up in court it’s “inevitably those with the deepest pockets” who tend to win, which isn’t fair on consumers.
Matthew Upton agreed, saying there will always be a need for an “independent arbiter” in consumer disputes:
“You will always need an independent arbiter where you have disputes between consumers and organisations” @matthewrupton of @CitizensAdvice tells #OSfringe18 #lab18 — Ombudsman Services (@OmbudServices) 24 September 2018
Sarah Jones believes that, despite the rise of social media, review sites and other new technologies, “we have a long way to go before we don’t need ombudsmen.”
Summary Our very own Matthew Vickers had the final word, acknowledging that as the world changes, ombudsman schemes must also change.
Echoing a point raised by MoneySavingExpert recently, he said the current eight-week rule, which stipulates that consumers must wait eight weeks before taking their complaint to an ombudsman, “belongs to the era of fax machines” and should be reviewed.
Having in place independent ombudsman schemes that not only resolve complaints but also use data intelligently and work closely with regulators, advocacy groups and businesses to raise standards would mean we can “truly talk about ending consumer detriment”, Matthew added.
We would like to thank event chair Tom Kibasi, panellists Sarah Jones MP, Chi Onwurah MP, Kirsty Good and Matthew Upton – as well as all of our attendees – for their valued contributions and expertise.
We felt that the event represented an important contribution to the debate on consumer rights and redress.