The Motor Ombudsman (TMO) Servicing and Repair Code Audit November 2017

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1 The Motor Ombudsman (TMO) Servicing and Repair Code Audit November 2017 Background information Motor vehicle servicing and repair is consistently an area that causes consumer complaints. This was reflected in the 9012 complaints received by TMO during 2016 on this subject (an increase of 2754 over the 2015 level of 6258). The Motor Codes Servicing and Repair Consumer Code was launched in 2008, gained Office of Fair Trading Approval in 2011 and remains an important source of consumer protection in this sector today. There has been a considerable amount of change within the Code Sponsor s organisation since last audit. The transition to Ombudsman status is now complete and staff numbers have increased to meet increasing demand for TMO s services. Some of the most common issues recorded by TMO against the Code included standard of work (47%), staff issues (29%) and booking issues (4%). It was noted at previous audit that the plan was to replace physical garage inspection monitoring with an on-line self-assessment and TMO are still considering all options in this area. At the time of audit there were has 1654 subscribers to the Servicing and Repair Code. Audit Process A qualified Trading Standards Practitioner from the Chartered Trading Standards Institute carried out a desktop audit. The audit included interviews with TMO and focused on the following areas: Member application process including checks on prospective businesses Member auditing - content and process Terms and conditions and other pre-contractual Information Marketing and advertising by member businesses Sanctions for non-complaint member businesses Customer service provisions (including support for vulnerable consumers) Consumer complaints process (including ADR) Customer satisfaction Training provided by code members to meet their obligations Outstanding issues/matters arising from the last audit in 2016 Audit Summary

2 The Code continues to provide effective consumer protection in this sector. Code sponsors are required to produce a written report annually on the operation of the code. The TMO report was only in draft format at the time of audit. Action: It was noted that the full version of the Annual Code Report is not available on the Member TMO website. Application This is Process to be updated as soon as possible. New Members In the last 12 months TMO accepted 571 new members to the code. The procedure for processing applications is documented and is based on submission of evidence and background investigation by TMO. Applications to the Code are handled face to face or via telephone/ exchange. New applications were examined and the rationale behind decisions explored. A requirement of membership is attendance at a TMO committee meeting, which is an additional way of ensuring consistency between new and existing members. Existing Member Inspections/Audit 100% of accredited businesses review and sign compliance documents and terms and conditions each year. This self-assessment model effectively means that each business re-commits to the Code each year. Existing members must also attend at least one committee meeting each calendar year. Evidence was reviewed and it was acknowledged by TMO that there was a backlog of self-assessments that needed to be processed before the end of the year. Evidence was provided on how this backlog will be cleared and future CTSI audits will assess this element in further detail. There was also an acknowledged backlog with the on-site audits (which are still being reviewed) and evidence was also provided on how this would be addressed. The annual self-assessment documents were examined. Areas covered include how information is provided to consumers and procedures for consumers to make complaints. Action: The backlog of self-assessments and on-site visits needs to be addressed in order for the code sponsor to continue to effectively monitor the Code. A plan and resources are in place for this (which will be reviewed at next audit). Membership Withdrawal and Sanctions for Non-Compliant Member Businesses

3 No businesses have resigned from the Code or had their membership terminated during the last 12 months. The procedures for removal were reviewed. There is a very efficient system in place to deal with non-compliant member businesses. The process for removing businesses was examined and evidence provided that the disciplinary board was still in place, but had not been needed since last audit. The disciplinary process itself was found to be very transparent and involves a set of procedures that work extremely well. Marketing and Advertising by Member Businesses 2% of all contacts received by TMO during 2016 related to advertising and a number of member websites were checked and were compliant. It was noted that one of the benefits of having the ADR provision and Ombudsman within the same organisation is being able to review letterheads and other documents when they arrive as part of consumer complaints. Customer Service Provisions Given the increase in the number of complaints, it was discussed with TMO whether this was due to industry standards falling. The general consensus was that this was not the case, pointing instead to the re-naming as Ombudsman meaning that consumers more readily understood the role of TMO and therefore accessed the service more frequently. Consumers can contact TMO by post, or telephone and it was noted that the teams had increased in size significantly since last audit. There are dedicated trained teams who are all experienced in complaint handling and they keep the complaints process moving to specified time scales. The auditor explored the issue of vulnerable consumers with TMO. This is clearly an issue that is very important to TMO and was reflected in a number of cases where the Ombudsman had specifically taken vulnerability into account. TMO are currently developing guidance for Code members to ensure that vulnerable consumers are identified properly and treated correctly. Consumer Complaints Process The consumer complaints process was examined in detail. The TMO ADR service is fully provided in-house and following an application in 2015 approval was granted by CTSI to be a certified ADR provider. The ADR service was examined and it was noted that there was a 50% increase in the number of enquiries compared to the previous year (28,823 v 19,256). There was also a 15% increase in the number of ADR cases taken on over the same period. 4% of complaints received under the code related to billing and 7% resulted from bookings for servicing or maintenance.

4 Best Practice The Independent Compliance Assessment Panel (ICAP) produces an annual report that includes a number of case studies. These are an excellent way of demonstrating the types of complaints that are received under the Code, and how they are resolved. Examples under the code included incorrect parts being fitted for driveshaft work and damage to electronic control unit during other repairs. Customer Satisfaction and Feedback Consumers are surveyed on their experiences of accredited businesses and products, the results being included in the TMO annual report. Consumers can leave feedback about members via the TMO website, or by contacting TMO directly if they wish to. In 2016, The Motor Ombudsman received 179,360 completed surveys from people whose cars had been serviced and/or repaired at a garage in The Motor Ombudsman network. Independent garages were the subject of 14,865 (8%) of these services, with the majority related to franchised main dealers, 144,037 (80%) and manufacturer authorised repairers, 20,458 surveys (11%). The findings of the service and repair survey suggest the network is fulfilling this objective for the vast majority of customers. The 11,248 consumers who completed the online or paper survey in 2016 collectively scored 97% for the quality of the service and/or repair provided by the garage that they used. That is one percentage point lower than 2015 and In 2016, independent garages accredited to the Motor Industry Code of Practice for Service and Repair achieved an aggregate score of 99% for the third year running, highlighting how the independent sector continues to set the standard in this regard. In 2016, independent garages scored 99% for customer service, underlining their very consistent record for the sector on this metric. Best Practice By including questions about how old the consumer s vehicle is in the surveys, TMO has been able to gain further insight into the workings of the sector. 63% of the vehicles serviced by independent garages in 2016 were more than six years old, compared with just 16% of the vehicles worked on by garages in the manufacturers networks. TMO is able to use this information to understand the sector better and to inform future training materials if necessary.

5 Training provided by Code Members to meet their obligations Members must provide relevant and effective training to make sure that staff understands the Code's provisions and their own legal obligations to consumers and responsibilities under the code. TMO has provided e-learning modules for members about responsibilities under the Code. Online training courses for ADR and CRA are available as well as in-house training for Customer Service staff provided by TMO. An e-learning module on distance sales is also in development. Adjudicators also provide information and guidance on legal disputes where appropriate. Adjudicators provide feedback upon the resolution of a dispute across a range of subjects to help ensure similar disputes do not arise again. Additionally, a customer services committee meets twice a year where Ombudsman training and case workshops are held. Conclusions It is the opinion of the auditor that TMO is continuing to fulfil its obligations as a Code Sponsor. Work does need to take place to address the backlog of self-assessments and visits, but the organisation has clearly grown and adapted to meet the new demands that Ombudsman status brings. TMO has invested in a range of processes to ensure that the Code is effective and runs smoothly. Obvious examples include the e-learning modules and the new Ombudsman status. A Primary Authority Partnership to underpin the work of the Code may further strengthen the culture of continual improvement at TMO. Overall, the Code continues to provide significant protection for consumers in the vehicle servicing and repair sector.