has been asked to write a report on the effectiveness of ombudsmen by a group of cross-party MPs seeking recommendations on how consumers' rights could be better served.

At its annual general meeting this morning, the All Party Parliamentary Group (APPG) on Consumer Protection outlined a future programme of work including an MSE report set to be used to launch a broader inquiry into the capability and clout of ombudsmen.

An ombudsman is an official appointed free of charge to investigate complaints against a company or organisation.

There are various different groups of ombudsmen that focus on separate areas of business – from the Financial Ombudsman Service (FOS), which deals with banking complaints, to the Consumer Ombudsman, which handles issues with retailers.

However, ombudsmen wield varying levels of power and the scale of protection that is given to the consumer will largely depend on which ombudsman they're dealing with.

Check out our Consumer Rights guide for full info on how to protect your pocket.

'It's time to get stronger rules'

MSE founder Martin Lewis says: "The word ombudsman has real power – many people believe that it's a Government-backed organisation that can replace the courts. In fact different ombudsmen have vastly different powers, authority and even, potentially, legitimacy.

"At the top end there's the FOS; set up by statute, with its rulings that are automatically binding on banks, insurers and financial firms.

"Yet it seems some ombudsmen are set up by individuals that ply their trade, even though they have no power to force companies to even talk to them; in reality they're just an alternative dispute resolution process that's only useful if both parties agree.

"It's time to set stronger rules limiting who can be an ombudsman and guidance to consumers on what they can expect. We hope this report will help the APPG to conduct its important inquiry into the effectiveness of ombudsmen, to bring about better protection for consumers when something goes wrong."

What's MSE's report likely to cover?

Martin initially offered his services in conducting a report on the effectiveness of ombudsmen and Richard Arkless MP, who chairs the APPG on Consumer Protection, today accepted that offer.

This is the first time MSE has been asked to carry out a report of this nature by an APPG. In a nutshell, our report is likely to cover:

  • An outline of the current ombudsmen environment
  • An explanation of what ombudsmen do
  • Recommendations to achieve better outcomes for consumers

What does the APPG say?

Arkless says: "Today's meeting was very successful and the plan we have unanimously agreed on is to use the upcoming MSE report to launch a formal inquiry into ombudsmen. There has been a range of stakeholder interest and we anticipate that there will be lots to discuss in the coming months."

He adds: "In addition to the group's work on ombudsmen, we hope to launch more initiatives raising awareness of consumer issues."