Alternative Dispute Resolution

In 2015 the UK gave effect to a piece of European law called the Alternative Dispute Resolution (ADR) directive. This law expressed the need for alternative ways of resolving contractual disputes between consumers and businesses to be widely available across the UK and the EU.

We are approved to be an ADR entity by the Financial Conduct Authority (FCA) which is our “competent authority” under the directive. We were approved when the law came into force in 2015.

But we’re still independent of the regulator in the way we investigate and decide individual cases.

What does the directive include?

There are a number of requirements in the directive – many of which we already met before it came into force. For example, we’re free for consumers and 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.

The directive also encourages the speedy resolution of consumer complaints, and ADR providers like us should aim to give customers an answer to a complaint within 90 days of receiving the complete complaint file.

We always try to answer complaints as quickly as possible. If we think a case will take longer than 90 days for us to send the parties our initial assessment – because, for example, it’s affected by something outside our control like a court case – we’ll let the consumer and business know how long we think that will take.

In recent years, dealing with the volumes of complaints we’ve received about PPI and short term lending have had an impact on how long things take.

The directive also introduced new rules around late complaints brought to us after the six-month time limit. 

Before, businesses only had to tell us if they objected to us looking into a late complaint when the complaint was referred to us. However, they now have to state their position on this earlier, in their final response letter. If a business agrees to us looking at a late complaint in their final response letter, they can't change their mind later on.

We can also look now look into a complaint before eight weeks have passed for the business to investigate it but only if the business and their customer agree. 

There were other changes to simplify the rules around the types of complaints we’re able to dismiss. In those cases where we don't think we’re the right organisation to help, we refer customers on to other complaint-handling organisations who can. 

Complaints not covered by the Directive

As the Directive was only concerned with consumer complaints, and our jurisdiction is much wider than that, some of the complaints which we deal with are outside of the scope of the ADR directive, for example complaints from micro-enterprises, charities and trusts.

We continue to deal with these complaints under the FCA’s DISP rules, but they are not included in our specific ADR reporting. Read more detail about who we can help

Were there any other rule changes that affected our service?

Yes. For example, we're only able to look into complaints referred to us late if the business actively agrees to us considering the complaint. 

But 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.

And the rules which set out how we "dismiss" complaints at the ombudsman service – and how long we have to do so – were simplified.

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

Yes they can, but you can find out more information about how we reach a decision and what to do if you don’t want to accept the decision on our ‘How we make decisions’ page.

Where can I find out more?

We publish an annual activity report (PDF 240KB) which includes data on things like how many complaints we’ve received and how long they take to resolve on average.

There’s also more about the changes in the Financial Conduct Authority's consultation on improving complaints handling.