Ombudsman Services response to the Consumer Focus consultation. Proposals for Design principles for the Regulated Industries Unit

Transcription

1 Ombudsman Services response to the Consumer Focus consultation Proposals for Design principles for the Regulated Industries Unit

2 Response of the Ombudsman Service Ltd (Ombudsman Services) to the Consumer Focus consultation: Proposals for Design principles for the Regulated Industries Unit 1 Summary 1.1 About Ombudsman Services The Ombudsman Service Ltd is a company limited by guarantee that provides ombudsman services for the energy, telecommunications, property and copyright licensing sectors, by appointment or approval from the relevant regulators. We provide dispute resolution and redress to domestic consumers and micro-businesses. Established in 2002, Ombudsman Services now has over 8,500 participating companies and last year we resolved over 18,000 complaints. The company employs around 170 people and has a turnover of just under 8 million. Ombudsman Services complaints resolution service is free to consumers and costs the taxpayer nothing; it is paid for by the participating companies under our jurisdiction by a combination of subscription and case fee. The participating companies do not and should not exercise financial control over the company. Ombudsman Services governance ensures that we are independent from the companies that fall under our jurisdiction. The more complaints there are about a company, the more the company pays, ensuring an incentive for the company to improve their customer service. To help level the playing field between consumers and companies, we have a contact centre which provides information and helps those who have difficulty in making a complaint. We achieve proportionality by providing alternative dispute resolution through different processes, from informal resolution to in-depth formal investigation. Our decisions are enforceable through the courts. Ombudsman Services response to the Consumer Focus consultation September

3 With our sustainable funding model, independence and considerable experience we have the capacity and appetite to undertake further work Communications sector We are approved by Ofcom, the independent regulator and competition authority for the UK communications industries, to handle complaints about communications companies. Our work meets the requirements of the Communications Act, This law means that domestic and small business customers of communications companies have the right to take certain complaints to the ombudsman if the company fails to resolve the problem Energy sector Our service has been approved by Ofgem, the body which regulates the electricity and gas markets in England, Scotland and Wales. Our work meets the requirements of the Consumers, Estate Agents and Redress Act, This law means that domestic and small (micro) business customers of energy companies have the right to take certain complaints to the ombudsman if the company fails to resolve the problem. We also take complaints on feed-in tariffs and have recently also been appointed by the government as the Green Deal ombudsman and investigation service Property sector Appointed by the Royal Institution of Chartered Surveyors (RICS), our service has been approved by the Office of Fair trading (OFT) as an estate agent redress scheme. Our work meets the requirements of the Consumers, Estate Agents and Redress Act, This means that customers of estate agents have the right to take certain complaints to the ombudsman if the firm or company fails to resolve the problem. We are also appointed by the Association of Residential Managing Agents (ARMA) to handle complaints about their members Copyright sector We provide alternative dispute resolution for copyright licensing, handling complaints about PRS for Music. Ombudsman Services response to the Consumer Focus consultation September

4 1.2 Ombudsman Services views Ombudsman Services welcomes the opportunity to comment on the design principles that Consumer Focus have issued for the proposed Regulated Industries Unit. Much of the consultation paper is aspirational and cannot be disagreed with. Ombudsman Services has a number of observations that may be of use in helping to shape the principles and ethos of the new unit 2 General response to the consultation 2.1 Resources The principles outlined in the consultation paper place considerable onus on the Regulated Industries Unit and it will have a great deal to do if it is to achieve everything the paper requires of it. A key issue the consultation fails to address is whether there will be sufficient resources available and if not, what the priorities of the unit will be. 2.2 Independence Following on from the resourcing of the unit is its independence. The consultation is unclear how the unit will be funded this should be made clear. Reference is made on p.3 of the consultation that the unit should be independent whilst at the same time be accountable (presumably via BIS) to the UK government and the devolved administrations. While Ombudsman Services would not disagree with this arrangement, it is important that there is strong, clear and well understood guidance agreed by all as to how these relationships will be managed; for example the Regulated Industries Unit could find itself pursuing three differing stances depending on what country a proposal relates to. 2.3 Remit Section 2 states that the Regulated Industries Unit will cover energy and postal markets across England, Wales and Scotland and additionally in Scotland on behalf of water consumers and initially post in Northern Ireland. As mentioned above, are there sufficient resources available to fulfil this role? Ombudsman Services response to the Consumer Focus consultation September

5 The paper also says that the government will consider further benefits of the unit covering water in England, and other sectors. While there is some logic for the remit of the unit to be extended - and Ombudsman Services would welcome such an approach to include communications and public transport including civil aviation - sufficient resources will have to be provided to reflect this increased role. 2.4 Proposed powers Having the right powers to effectively do carry out its duties is essential. Ombudsman Services welcomes the unit being given information gathering powers, the right to be consulted, rights of appeal and to initiate super complaints. However, the consultation provides no indication as to how it will acquire these powers. 3 Specific response to the questions 3.1 Specific comments Although the Regulated Industries Unit commits itself to partnership working with a range of stakeholders throughout the consultation, on p6 bullet point 4, limits the unit to working with publicly funded consumer bodies why is this the case? Ombudsman Services, for example, is funded by the industries it resolves complaints about, and is not funded by the public purse to do this, but we would consider ourselves to be a key stakeholder of the RIU and would expect to work with it on relevant issues. It may be the way the consultation is drafted but in Para 2 it is clear that the purpose of the unit will be to represent consumers of markets subject to economic regulation yet it will not be a partisan campaigner (p.7). The document fails to identify how will this be achieved. Also, the first Para in section 10 confirms that it will need to earn the respect of governments, but leaves consumer groups to the end. Again this may be a drafting mistake, but it is our view and in light of the opening paragraph, the Regulated Industries Unit will need to focus on consumer groups as well as the other stakeholders. Ombudsman Services response to the Consumer Focus consultation September

6 Bullet point 5 on page 7 suggests that short term policy goals somehow conflict with or undermine the unit focusing on the big picture and the more significant issues this is often not the case and could be detrimental to the unit s approach. The consultation paper rightly says that the unit will avoid headline grabbing. Given the culture of Consumer Focus from which the RIU will in part be drawn, how will the Regulated Industries Unit ensure that such a culture be adopted? Section 12, Para 2, identifies a number of key stakeholders that the Regulated Industries Unit should develop good relationships with. Ombudsman Services is keen to work with the unit in the future as it currently does with Consumer Focus. We would like to extend an invitation to the Regulated Industries Unit to participate on our Consumer Liaison Panel which brings together key consumer stakeholders, including Consumer Focus and Citizens Advice. Lewis Shand Smith Chief Ombudsman 7 September 2012 Ombudsman Services response to the Consumer Focus consultation September