£750 billion of purchases under-protected every year

by Ombudsman Services | Sep 21, 2018

More than half (59%) of all purchases made in 2017 were in sectors without adequate levels of consumer protection, a new report by Ombudsman Services (OS) has found.

The Ending Consumer Detriment Report, published today, found that £746bn worth of consumer spending was under-protected last year.

It highlights the struggles consumers with unresolved complaints can face – particularly in sectors such as retail, travel and gambling where businesses aren’t required to sign up to an independent dispute resolution or ombudsman scheme.

In under-protected sectors such as these, taking a business to court for shoddy service or faulty goods is the only option for consumers.

In some sectors consumers are faced with multiple dispute resolution schemes, with no guarantee that their issue or complaint will be covered or that their problem will be resolved free of charge.

The retail sector, despite representing the majority of all consumer spending last year, does not have a single ombudsman or mandatory participation in an independent dispute resolution scheme.

This leaves consumers in a vulnerable position, with the potential to be left out of pocket if something goes wrong.

The best-protected sectors are those that are covered by compulsory ombudsman schemes that are free to the public – making the energy, legal and financial sectors some of the best for consumer redress and dispute resolution.

Within the report, Ombudsman Services calls on businesses and government to improve the situation for consumers post-Brexit, laying out a series of recommendations including steps to protect the most vulnerable consumers.

Matthew Vickers, chief executive and chief ombudsman designate at Ombudsman Services, said: “We all make purchases every day and naturally we expect an effective complaints process should something go wrong. Currently, however, some markets aren’t working as well as they should for consumers.

“Our report puts into stark reality the potential risk that consumers face when they purchase certain products or services. Without the protection of a legitimate and free dispute resolution or ombudsman scheme, consumers with unresolved complaints are likely to be left frustrated, confused and out of pocket.

“There are steps that consumers can take, such as checking the company they are buying from is part of a dispute resolution or ombudsman scheme, but the responsibility shouldn’t lie just with shoppers.

“Business and government need to get on board with creating a better landscape for consumers, and in our report we have laid out a series of recommendations that we believe will achieve just that.”