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our future service – and where the Alternative Dispute Resolution (ADR) directive fits in

Increasingly, we live in a world where our customers expect answers in days and weeks, not months, and often want to get hold of us in a way that suits them. We need to continue to be accessible through a range of channels and easy to use. And, of course, provide a well-run and efficient service that’s fair and feels fair to our customers – both businesses and consumers.

These questions and answers are designed to explain some of the ways we’re continuing to develop our service – and how the Alternative Dispute Resolution (ADR) directive fits in as an important part of this work.

what’s the ADR directive all about?

The ADR directive is a new piece of European law. It means that from 9 July 2015 alternative ways of resolving contractual disputes between consumers and businesses will be available much more widely across the UK and the EU.

Some things aren’t covered by the directive. For example, the complaints we receive from micro-enterprises, charities and trusts. And some sectors – like health and education – aren’t covered by the directive.

so will people still bring complaints about money matters to the Financial Ombudsman Service?

Yes, we’ll continue to be the ombudsman that deals with financial complaints.

We already meet most of the requirements of the directive. For example, we’re free for consumers, complaints can be brought to us in a number of ways – including through our online complaint form – and our adjudicators and ombudsmen have the knowledge and experience they need to do their work consistently to the highest standards.

We’ll still work closely with the Financial Conduct Authority (FCA) – the “competent authority” for financial services under the directive. And we’ll work with them to show how the aims of the directive are being put into practice. But this doesn’t change the fact that we’re independent of the regulator in the way we investigate and decide individual cases.

what does the directive say about timescales?

The directive encourages the speedy resolution of consumer complaints. And from 9 July 2015, ADR providers like the financial ombudsman service should aim to give answers to complaints within 90 days of receiving the complete complaint file.

We very much support the aims of the directive in this area and have always tried to deal with the complaints we get as quickly as possible. In fact, in most cases we deal with – other than those about PPI – we already give answers in less than 90 days.

So we’ll continue to strive to provide the best service we can to all our customers, regardless of when they contacted us. And we’ll keep challenging ourselves to get fair answers to our customers as quickly as possible. We know that 90 days still feels like a long time to most people.

what about timescales for PPI?

We’ve always been clear that putting right the fall-out of mass PPI mis-selling is something we’ll be dealing with for several years yet. Given the unprecedented number of people who’ve asked for our help – over 1.3 million so far – many are waiting longer than we, or they, would like. Even though we continue to make good headway, it’s still likely to take us significantly longer than 90 days to give people an answer about PPI.

As we’ve explained, the new aims and standards apply from 9 July 2015 onwards. And we have to bear in mind that it wouldn’t be fair to help people who contacted us about PPI after 9 July sooner than people who contacted us before 9 July – who may have been waiting a long time already.

In some cases, we’re already able to give people an answer about their PPI within 90 days. And building on the progress we’ve made so far, we’ll continue to work with the FCA to continue to reduce the time people have to wait.

will you expect businesses to do anything differently?

We’re always looking at how we can get quicker at sorting out complaints. And, as part of this, we’ll continue to ask businesses to work with us and get information back to us promptly – and within the time given. We’ll always be fair with the time we’re giving businesses and consumers to get back to us with information – and how long we give will depend on what it is we’re asking for.

what happens if a business can’t give you the information you want when you ask for it?

A business has eight weeks to try to sort out the problem directly with its customer. And if the problem has been looked into properly, in most cases, all the necessary information should already be to hand when it lets the consumer know what its answer is.

So it shouldn’t generally be difficult for a business to send us the information we need when we ask for it. If there isn’t a good reason why a business hasn’t sent us the information we’ve asked for, we might move forward on the basis of the information we have got – as we would do now.

what if a case takes longer than we expected?

We always try to answer complaints as quickly as possible. But there may be some “highly complex” cases that will take longer than 90 days for us to sort out – for example, when they’re affected by something outside of our control like a court case.

If we think a case will take longer than 90 days, we’ll write to the consumer and business to let them know how long it will take. But in most areas of our work, cases like this should be very much in the minority.

We know that in some areas, like payment protection insurance (PPI), complaints are likely to take us longer. But we’re continuing to look into new ways to work as efficiently as we can – so we can give our customers answers more quickly.   

can a consumer still go to court if they don’t want to accept the ombudsman’s decision?

Yes. If a consumer doesn’t accept our ombudsman’s final decision, it’s not legally binding on either business or the consumer – and the consumer can still go to court (although court time limits will still apply). Consumers will also still be able to tell us at any point that they don’t want to take their complaint any further.

what are the Online Dispute Resolution (ODR) regulations – and where do they fit in?

The ODR regulations are designed to complement the ADR directive – although they don’t come into force until 9 January 2016. Once these regulations are up and running, consumers will have easier access to redress for cross-border online disputes, such as internet sales, across the EU.

We already work with other countries in Europe to help consumers find relevant schemes in other EU member states. And under the ODR regulations there will be a single online "portal" to direct complaints to other schemes if the business isn’t based in the UK.

are there any other rule changes that will affect the ombudsman?

There are some other small changes – but we don’t expect them to affect significantly how we work. For example, the situations where we might not look into a particular case are being simplified to bring them in line with the directive – but they’ll still be very similar to what we already have.

You can find out more about these and other changes in the Financial Conduct Authority’s consultation on Improving complaints handling.

is anything else changing?

From 9 July 2015, there will be some changes around whether we can look into complaints that people bring to us outside the time limits for complaining.

The time limits themselves – set out in the FCA’s handbook – won’t change. But from 9 July, we’ll only be able to look into complaints referred to us late if the business actively agrees to us considering the complaint.

Previously, businesses told us if they objected to our looking into a complaint only when the complaint was referred to us.

But the new rules for businesses mean they will have to say earlier – in their final response letters – whether or not they agree to the time limits being waived if their customer contacts us outside the time limits. The FCA has set out specific wording that businesses should use.

If a business agrees, they can’t change their mind later on. And as always, we may still look into a complaint referred to us late if there are exceptional circumstances – even if the business hasn’t given their consent.

We may also look into a complaint before eight weeks have passed for the business to investigate it. But we’ll only do this if the business and their customer agree – and the business will still have to deal with the complaint in line with the complaints-handing rules.

There are also some changes from 9 July to simplify the rules which set out how we “dismiss” complaints at the ombudsman service. In those cases where we don’t think we’re the right organisation to help, we’ll continue to refer consumers on to organisations who can.

You can find out more about these and other changes in the Financial Conduct Authority’s consultation on Improving complaints handling.

image: ADR
help for businesses and consumer advisers

  • contact our technical advice desk on 020 7964 1400
  • The law requires us to decide each case on the basis of our existing powers and what is fair in the circumstances of that particular case.

    We take into account the law, regulators' rules and guidance, relevant codes and good industry practice at the relevant time.

    We do not have power to make rules for financial businesses.

    Our current approach may develop in the light of circumstances disclosed by further cases we receive.

    We may decide that fairness requires a different approach in a particular case.