Communications provider Entanet, which supplies broadband services to a number of ISPs in the UK, has controversially suggested that Ofcom’s official consumer complaint schemes should force customers to “pay for the costs” if their complaint against an internet provider is rejected.
Today’s criticism stems from Ofcom’s recent introduction of several vague new “decision making principles”, which are designed to help its two Alternative Dispute Resolution schemes reach “better outcomes” and fair compensation awards for customers affected by poor broadband ISP or phone service (here).
The regulator requires all ISPs to be members of an approved ADR, which consumers can use after a dispute has gone unresolved for 8 weeks (sooner if you’ve been able to get a deadlock letter from your ISP). But some ISPs have frequently complained that the system is open to abuse (example), with others privately using the word “blackmail“.
The reason for this, as Entanet’s Product Manager (Paul Heritage-Redpath) explains, is because ISPs are, “forced to pay the costs of the ADR scheme even when a customer’s dispute is rejected“. This can amount to several hundred pounds and meanwhile the ADR “service will remain completely free of charge to the end user“.
Paul Heritage-Redpath added (blog):
“Elsewhere in English law it is commonplace that the losing party pays for the costs and we believe this would be a more appropriate solution. Once again it seems that Ofcom have the best of intentions but have provided little in the way of detail.
Ofcom must recognise that strong guidelines MUST be given in order to unify the two schemes to achieve a level of consistency. Not doing so shows Ofcom to be rather toothless in this area, leaving the schemes to potentially diverge further from Ofcom’s wishes.”
Entanet fears that Ofcom’s plan to unify the ADR schemes, “will fail if they do not add some detail to their aims, outlining the definitive process to be followed and providing at least guideline figures for claims“. But, despite the strong criticism, Entanet still claims to “fully support the need for ADR schemes” and admits that their solution is “highly unlikely” to be adopted.
Meanwhile Ofcom remains “satisfied that both Schemes continue to meet the approval criteria” and believes that the cost of working with an ADR should be taken as a natural part of the ISPs regulatory compliance.
ISPreview.co.uk isn’t convinced that the solution to this problem is one best served by potentially threatening heavy charges against end-users. ADR’s exist to protect consumers because some ISPs (especially big providers) don’t play fair, yet it should not be forgotten that internet provision can be a technically complex service to understand, which gives rise to confusion and sometimes mistakes are made. At the same time the concerns raised by ISPs cannot be dismissed.
A greater degree of respect for the ISPs contract terms and some common sense oversight, imposed by Ofcom, might thus provide a better structure for halting potentially frivolous disputes before they even begin. Easier said than done. It should also be stressed that this problem, according to Ofcom, is only very small but then it would only take a few such incidents to start costing smaller ISPs a bucket load of cash.
The Director of AAISP, Adrian Kennard, has praised Entanet for echoing his own “serious doubts” about the ADR process and warnings over the danger from an “obvious blackmail scenario” with the current system.
Adrian Kennard said (blog):
“I appreciate that consumers do not want to be put off making valid complaints. They should not be. There are, indeed, many cases where ISPs and telcos make mistakes. Even we make mistakes, though we always aim to rectify them fairly and promptly if we do.
I agree with Enta, failed ADR should have a cost, even if not the full cost, so that consumers only take real cases forward. They should not be put off, but even if they have to spend £50 up front, that would screen out the people taking the ****. Of course, as soon as you do this, then why on earth do we need ADR anyway when the county courts do such a good job for such a reasonable price in the first place. What we need is the courts to be less scary for people, not ADR at all.”
Kennard, whom rarely shy’s away from controversy, claims that the small claims court is a potentially better approach, yet he rightly points out that courts can sometimes appear “scary” to ordinary consumers and resolving this could be one of the solutions.