Time to scrap 8-week ombudsman rule and drag it into 21st Century
The UK's biggest consumer website MoneySavingExpert.com (MSE) is urgently calling for a radical change to an outdated and archaic rule, which forces consumers to wait 8 weeks before they can escalate a complaint to an ombudsman.
Ombudsmen play a crucial role in consumer protection. For more than two years, MSE has campaigned for the 8-week wait time to be slashed by at least half, and is today revealing new online research which proves once and for all that consumers need and want this change too.
What is the 8-week rule?
Ombudsmen resolve disputes by acting as a final referee between a consumer and a company when they're unable to settle a complaint between themselves. For some, they are a viable, free alternative to court action across a range of services and products – including finance, energy, telecoms, legal services, healthcare and housing.
A consumer must first complain to the firm (eg, their bank), which then has 8 weeks to handle their case before an ombudsman will consider the complaint.
Ombudsmen should be the 'gold standard' in consumer complaints resolution, but this rule is a relic of a bygone, non-digital era. Now, we can buy travel insurance online in seconds, switch energy at the click of a mouse, and get near-instant lending decisions – and 8 weeks is simply too long. If the wait leaves someone in problem debt or marks their credit file, for example, a consumer could be left in crisis. These are just two of the comments made by people in response to MSE's survey:
"Had to wait far too long before I could involve the Energy Ombudsman. By which time my energy company had taken two months of money from my account, which was significantly over the amount they should have taken. The energy firm simply did not respond and took the money by direct debit and I could do nothing to stop them."
"There is too much time between making the initial complaint to the company and being able to ask the assistance of the ombudsman. This is frustrating and you start to forget important details."
The case for a 2-4 week wait time
Since MSE presented its 2017 report ‘Sharper Teeth’ in Parliament, recommending that the wait should be reduced to around 2-4 weeks, the site has now gathered evidence of widespread consumer support for tearing up the rule and what the wait time should be. In its new report, 'Justice Delayed' (1), the research found that:
- 89% of surveyed consumers said the 8-week period should be at least slashed in half to 28 days, or even less.
- 50% said firms should have no more than 14 days to deal with their complaints before they have the right to take them to an ombudsman.
- Just 1% of respondents thought the current 8-week process was the best timeframe.
The rule is clearly no longer fit for purpose, and is leaving consumers frustrated, disappointed and out in the cold. MSE is now calling on the Government, regulators and the ombudsman sector to urgently slash it, ideally to two weeks, but no more than four weeks, and make it compulsory and consistent across all industries. It also asks that exceptions are made, allowing people in crisis to escalate their complaint immediately to stop things getting worse.
Martin Lewis, founder of MoneySavingExpert.com, said: "We live in a fast-paced, digital world of instant communications and payments. Yet ombudsmen aren't quick. They weren't designed to be – they evolved in a bygone age. And within their operations was a rule stating that consumers can only go to an ombudsman with a complaint after the firm has had at least eight weeks to try and deal with it.
"It's now abundantly clear that this rule is no longer fit for purpose. Things happen so much quicker. It allows bad situations in our rapid world to snowball out of control, having the potential to destroy people's finances and wellbeing before an ombudsman can even start looking at what's going on.
"It's time for change. The 8-week rule is outdated, outmoded and should be out of here. Today's report explains why change is needed and how it should be enacted, with robust support from the stakeholders that matter, including the ombudsmen themselves, politicians, policy makers, regulators and other consumer organisations.
"The Government, ombudsmen and regulators need to urgently act on our findings. It's time for a change in the time to complain."
Yvonne Fovargue MP, Chair of the All-Party Parliamentary Group on Consumer Protection, said: "The 8-week rule was created in a pre-digital age. Since we now have the ability to transfer information far more freely and quickly, a waiting time somewhere between two and four weeks should be more than ample. I am not surprised that MoneySavingExpert's research so clearly backs this up."
Caroline Wayman, Chief Ombudsman and Chief Executive of the Financial Ombudsman Service, said: "We welcome the publication of this report and the insight it provides into customer expectations on how businesses deal with their complaints. From the hundreds of thousands of complaints against financial businesses that we deal with every year, we know it is really important that complaints are dealt with as soon as possible, especially when consumers are vulnerable."
Matthew Vickers, Chief Executive at the Energy Ombudsman, said: “For many consumers 8 weeks is a long time to wait to have a complaint heard and resolved, especially if there are financial implications and impacts. Ombudsman Services agree that it’s time the 8 week rule was reviewed. We live in a modern age where consumers don’t just want speed of service, but expect speed of service and make buying decisions based on the “how fast can I..?
“Companies are required to notify consumers of the right to come to the ombudsman; that’s not in question. It’s how long before an independent party can get involved which needs reviewing, for the benefit of all parties involved. If 2 to 4 weeks helps reduce complaints, helps rebuild the relationship between the provider and the consumer and avoids further customer detriment, then we are all for a change in the rule.”
Notes to editors
- You can read MSE's latest report 'Justice delayed: the case for shortening the 8-week rule' online. For the report, MSE instructed YouGov to carry out qualitative and quantitative online research in the form of a nationally representative YouGov sample of 2,069 adults (aged 18+) in Great Britain. This ran from 31 July to 1 August 2019.
You can read MSE’s 2017 report, ‘Sharper teeth: the consumer need for ombudsman reform’ for further information and background on the campaign.