It has introduced a set of common "decision-making principles" the two regulator-approved ombudsman schemes must follow when considering complaints, following a review of the ADR processes available to consumers. The ADR schemes will also have to adopt common compensation guidelines to ensure that "consistent and fair decisions" on compensation will be reached regardless of which service a consumer uses, according to a statement by the regulator.
Ofcom has a statutory duty to ensure that consumers are able to access free ADR services, which it does by approving ADR schemes to act as independent 'middlemen' between service providers and their customers when a complaint cannot be resolved without intervention. The changes will apply to both of the current Ofcom-approved schemes - Ombudsman Services: Communications (OS) and the Communications and Internet Services Adjudication Service (CISAS).
Claudio Pollack, Director of Ofcom's Consumer Group, said that the regulator would work with both schemes to ensure that the principles were working well in practice and would keep them under review.
"Effective redress for consumers is essential and by providing a free, independent service to consider disputes, ADR schemes play a key part in this," he said. "OS and CISAS have agreed to the new decision making principles, and Ofcom has therefore continued its approval of both of these ADR providers."
Telecoms companies must belong to an approved ADR scheme under Ofcom rules. If a consumer who has raised a complaint is unable to reach agreement with their provider after eight weeks the consumer can make a free application to the relevant scheme, which will independently examine the case. If the ADR scheme ultimately agrees with the consumer, it can order the provider to fix the problem and pay compensation where necessary.
During its review, Ofcom considered whether the schemes still met its "approval criteria"; which cover a wide range of factors including accessibility, fairness and effectiveness. The regulator found that although both schemes continued to resolve disputes effectively and met most of its criteria, the schemes delivered "inconsistent outcomes" for consumers in a "small minority" of cases.
"Reasonable decisions were being reached in over 90% of cases considered by the Schemes," it concluded in its report. "However, we identified that some aspects of decision making at the Schemes were leading to inconsistent outcomes for consumers in some circumstances, in particular in cases where evidence was lacking and where small awards of compensation might be considered appropriate for poor customer service."
The level of compensation awarded by the schemes can be very different according to consumer group thinkbroadband, which said that CISAS awards on average £173 compensation in cases where an award is made while OS averages £103 per award. OS tends to make a larger number of smaller compensation awards than the alternative scheme, the group said, while current CISAS policy is to only consider complaints by consumers who have specifically requested compensation. In its statement, Ofcom said that CISAS would begin to consider awards beyond the amount requested by the consumer to "ensure that there is no constraint on the making of appropriate compensation awards".
Ofcom noted that, during the review period, both schemes had introduced a number of improvements designed to make their procedures more accessible and efficient. More consumers than ever before were now using the schemes, it said, with the most recent figures showing a 56% annual increase in the number of complaints referred to CISAS and a 17% rise in complaints referred to OS.
The new principles, supported by the majority of respondents to a consultation on the issue by Ofcom in May, would not likely have much of an impact on costs and compensation levels, the regulator said.