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MPs back Martin's call for an overhaul of ombudsmen

An influential group of MPs has backed Martin Lewis's call for the broken ombudsmen system to be reformed, in a huge step forward for's campaign to overhaul the complaints system.

The All-Party Parliamentary Group (APPG) on Consumer Protection – a cross-party group of politicians which includes MPs and a peer from the House of Lords – has today published a new report calling for the issue of ombudsmen reform to be referred to the Law Commission, which is an independent body that reviews and recommends reforms to laws.

And the MPs have made a number of recommendations for change which could be made in the meantime, including new requirements that all ombudsman schemes have mandatory membership, are able to enforce their decisions and are directly answerable to Parliament via select committees.

MoneySavingExpert provided the APPG with funding for the inquiry costs, and its independent report today is a follow-up to MSE's report Sharper Teeth: The Consumer Need For Ombudsman Reformwhich was commissioned by the group of MPs in 2017. MoneySavingExpert backs the calls made by the APPG today.

Read the APPG's report in full here.

 Martin: 'Ombudsmen should be the gold standard in independent dispute resolution'

Martin Lewis, founder and chair of, said: "Ombudsmen should be the gold standard in independent dispute resolution, with the ability to force all players in their sector to comply with rulings. Yet not all ombudsmen are equal. Some are little more than opt-in trade bodies that firms can ignore with impunity, and are about as useful to consumers as a chocolate teapot.

"We exposed these problems in our Sharper Teeth report in 2017, and the All-Party Parliamentary Group on Consumer Protection has agreed with many of the recommendations we made and asked the Government to refer the whole mess to the Law Commission.

"To be called an ombudsman, you should have the statutory powers needed to enforce decisions and be under proper scrutiny, so consumers have confidence they'll get a fair hearing. Plus we need to change the antiquated pre-digital rule that means consumers have to wait a ridiculous eight weeks to escalate a problem to an ombudsman after complaining."

What does the report recommend?

The APPG issued a call for evidence on the ombudsmen landscape in April 2018 amidst long-standing concerns about the wide variation in the standards of complaints handling and reports of consumer confusion, flagged by MoneySavingExpert in its Sharper Teeth report in 2017.

The report recommends that in the long term, the Government should refer wholesale reform of the ombudsman sector to the Law Commission, recommending one ombudsman for each sector with compulsory membership.

But in the short and intermediate term, it recommends:

  • Ombudsman schemes that do not have mandatory membership and/or cannot enforce their decisions should be stripped of the right to use the word 'ombudsman' in their title.

  • Complainants should only have to wait four weeks before passing their case to an ombudsman.

  • All ombudsmen should be required to give evidence to Parliament via the appropriate select committee.

  • All ombudsman schemes should publish annual reports, including anonymised examples of complaints.

  • There should be commitment to research into the viability of a 'single portal' for all consumer complaints.

  • Ombudsman schemes should commit greater resources to their websites and communications, with the aim of improving signposting and keeping complainants better informed. 

  • There should be a form of 'fit and proper' approved persons test for people in senior roles in ombudsmen, with the Department for Business, Energy and Industrial Strategy approving appointments.

  • Ombudsmen should commit to cooperating with all stakeholders to put the needs of consumers first.

What does the APPG say?

Yvonne Fovargue MP, chair of the APPG, said: "We make a number of suggestions for improvement that could be quickly implemented. But ultimately, we would like to see the ombudsman system overhauled by the Law Commission, who are best able to consolidate and extend the current statutory landscape.

"The ombudsman system has the potential to be the 'gold standard' of alternative dispute resolution if the standards of the rest can be brought up to the standards of the best."

A spokesperson from the Department for Business, Energy and Industrial Strategy said: "It is vital that consumers have access to an effective, accessible and transparent system of redress. Our review of the alternative dispute resolution landscape is looking at how the ombudsman system can be improved, and we expect to publish a white paper later this year. We will study the recommendations of the APPG with interest."

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