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27|07|05

Ofcom Annual Review of Industry Dispute Resolution processes

Ofcom today published its annual review of the current existing Alternate Dispute Resolution (ADR) schemes in the telecommunications sector.

Section 52 of the Communications Act 2003 requires Ofcom to ensure that residential or small business customers have access to a prompt, independent and effective resolution when they are in a dispute with their communications provider.

Ofcom has approved two schemes: the Office of the Telecommunications Ombudsman (Otelo) and the Communications and Internet Services Adjudication Scheme (CISAS).

Ofcom’s ADR review includes results of research into the performance of Otelo, CISAS and their members. This research shows that communications providers can do more to ensure that customer complaints are handled fairly and promptly. Based on these findings, Ofcom is consulting on recommendations to ensure that communications providers deal with customer complaints more effectively.

Ofcom's research found that:

• A majority of major communications providers (309 in total) are now members of an approved ADR scheme. CISAS membership has increased from 49 to 144. Otelo membership has grown from 7 to 165;
• Complaints form only one aspect of overall customer contact with providers. However the research included detailed interviews with over 100 customers who had complaints. More than two-thirds of those interviewed were not satisfied with the way their communications provider handed the complaint;
• Customer awareness of the ADR process is low. The research suggests that communications providers often fail to escalate complaints satisfactorily or keep complainants informed of progress;
• Very few complaints are referred to ADR. Of one million complaints received by a random sample of 50 ADR members, less than 5,000 were referred to ADR;
• Where a customer complaint is investigated by an ADR scheme, the majority of complainants (around 80%) accept the final decision.

In May 2005 Ofcom published new guidelines for communications providers on handling complaints. To help improve complaint handling across the industry, Ofcom will work with Otelo and CISAS to develop further best practice guidelines for providers.

Ofcom is also consulting on recommendations that communications providers should:

• Improve the procedures they use to handle complaints. For example, providers need to make customers aware of their complaints Code of Practice. This should be accessible via company websites and / or on customer invoices;
• Ensure that staff who deal with customers are trained to handle complaints and to apply those procedures;
• Make customers more aware of the role that ADR schemes can play in dealing with unresolved complaints;
• Record any expression of dissatisfaction as a complaint, regardless of how it was communicated and whether or not the provider thinks it is justified.

Ofcom’s proposals also recommend that ADR schemes should:

• Publish Key Performance Indicators on how quickly complaints are dealt with and whether customers are satisfied with the handling of complaints;
• Consider using an independent third party to handle complaints about their own investigation process;
• Take action against providers who fail to comply with their rules, which may include exclusion from the scheme. Communications providers must be members of an Ofcom-approved ADR scheme to secure the regulator's approval for their customer complaints and disputes Code of Practice. This is required under Sections 52-54 of the Communications Act 2003 (General Condition 14).

Ofcom’s proposals seek to strengthen the role of ADR schemes to ensure better and more effective treatment of complaints. Subject to the consultation, Ofcom will work with ADR schemes to implement recommendations that are agreed.

The full consultation document is available at www.ofcom.org.uk. The closing date for responses is 5 October 2005.

Ends.

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