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 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 piece of European law. From 9 July 2015 alternative ways of resolving contractual disputes between consumers and businesses became much more widely available 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.
We already met 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 online - and our investigators and ombudsmen have the knowledge and experience they need to do their work consistently to the highest standards.
We 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. 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 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 some time. 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 their PPI complaint.
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 complaint within 90 days. And building on the progress we've made so far, we'll continue to work towards reducing the time people have to wait.
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.
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 - they came into force on 9 January 2016. These regulations say that consumers should 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.
Were there any other rule changes that affected the ombudsman?
From 9 July 2015, there were 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 - didn't change. But from 9 July 2015, we're only 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 now have to say earlier - in their final response letters - whether or not they consent 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 consents to waive the time limits, 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 were also some changes from 9 July 2015 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.