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ISPA UK Calls for Changes to Tackle Vexatious Consumer ISP Complaints

Thursday, March 13th, 2014 (8:06 am) - Score 627

The UK Internet Service Providers Association has called for changes to the Alternative Dispute Resolution (ADR) process that could address the problem of “vexatious” consumer complaints and, in relation to that, situations where broadband ISPs pay hundreds of pounds in ADR fees despite winning their case.

The communications regulator, Ofcom, requires all ISPs to be members of an approved ADR scheme like CISAS or Ombudsman Services, which are both designed to supplement (not replace) the providers own internal complaints procedures and are only used after a dispute has gone unresolved for 8 weeks (the “Deadlock Letter” stage).

The process is designed to be free for consumers to use but ISPs, win or lose, often still have to pay up to around £350 +vat in fees to the ADR provider. The cost is extremely high, especially if you’re a small ISP selling a cheap package to home consumers. Needless to say that some providers believe ADRs may end up being commercially motivated to take on questionable complaints.

However others regard it as a necessary cost of doing business in the market and Ofcom states that the right of customers to seek ADR (free of charge) has been enshrined in statute by Parliament, with their own General Condition 15 14 requiring that “the complaints handling and dispute resolution procedures are ‘easy to use, transparent and effective“.

But over the past couple of years we’ve seen a number of examples (e.g. here and here) where ISPs believe that the process can be used incorrectly or to help some customers get out of paying their unpaid bills, sometimes even when the service itself has already been delivered correctly and according to the contractual terms. Ofcom has attempted to tighten their guidelines (here) but some ISPs say this has not done enough to tackle the problems.

ISPA Statement on ADR Complaints Handling

The UK has one of the world’s most competitive telecoms market, with increasing speeds and more varied services matched by decreasing prices making broadband the cheapest utility for households. However with the huge growth we’ve seen in broadband, there are sometimes unfortunate incidents where ADR is required. We support ADR as it provides peace of mind to both consumers and ISPs and the sector has led the way in using ADR.

ISPA members feel the current scheme could be improved, and we will outline these improvements in the consultation. Currently, ISPs need to pay a case fee regardless of whether they win the case or not and there is little to dissuade vexatious claims from clogging up the system and creating delays. ISPA members also don’t feel there’s a level playing field, with ISPs unable to go beyond the ADR ruling, but complainants being able to take it further.

ISPA will be working with its members on ADR with Ofcom and CISAS through a workshop for members to discuss these concerns.

The comment directly relates to the Government’s (Department for Business, Innovation and Skills) new consultation on Alternative Dispute Resolution procedures, which forms part of Europe’s wider directive to introduce similar schemes.

Some recent suggestions for change include a call by Entanet for consumers to pay the costs of the process if their complaint fails (here), while others believe that Ofcom itself should take charge of individual complaints (here) or that it might be better if ISPs weren’t charged for such complaints until they racked up a certain number of ADRs.

ISPreview.co.uk have also heard others suggesting that the ADR process should act like a Small Claims Court, where consumers pay a small fee to have their case escalated, although others fear that this would create a barrier to both legitimate and illegitimate complaints.

However it’s important to remember that the ADR process exists because some ISPs simply don’t play fair with their customers and a few get it wrong more often than others. On the whole they are a good thing but that’s not to say that the system wouldn’t benefit from some improvement.

ISPs might not like ADRs but then few consumers enjoy the stress of having to take their complaint that far. In theory if an ISP keeps their customers happy then they should never have anything to worry about, although recent examples suggest that some consumers (unwittingly or not) can make questionable complaints.

On the other hand broadband provision is a technically complex beast with many points of potential failure, including inside the customers own home, and identifying who is to blame is rarely simple. For example, we’ve seen some ADRs raised against ISPs for problems that have actually been caused by parts of BTOpenreach’s infrastructure which the ISP itself cannot control, although it’s only the ISP that pays for the ADR and not Openreach.

In an ideal world the ADR itself should be competent enough to decide but clearly that approach doesn’t always work as well as it should.

Leave a Comment
3 Responses
  1. Avatar DTMark says:

    I still completely fail to see the point of this scheme. Broadband is sold as a “best efforts” / “no efforts” service.

    The price is fixed, and that’s about all. Aside from business level SLAs there are no speed guarantees, no uptime guarantees, nothing. What is being “policed” here? How slow does it have to be, how often does it have to go offline, for that to be “unacceptable”?

    For example if I sign up with an ISP based on a line forecast and it turns out to be rubbish, I’d cancel it, stop any more payment and pursue a “charge back” on the upfront payment to recover my money if the ISP refuses to supply the forecasted line speeds. Virgin Media gives you 28 days, is it, to do the same.

    I guess in the ISP’s case, the ISP loses the money having already paid some upfront to Openreach who then pocket that as a reward for their poor or non existent performance.

    That’s the ISP’s problem. Which you’d have thought would lead to ISPs trying to lean on OFCOM to get that sorted and/or opening disputes with Openreach (thinking of AAISP here). Doesn’t appear to have anything to do with this, though.

    Can anyone give me an example of the type of complaint that was successfully handled – which could not have been resolved, by, say a small claim in the court, thus validating the point its existence?

  2. Avatar boggits says:

    FULL DISCLOSURE – I am an ISPA council member

    Define successfully handled…

    There have been a number of cases where ISPs have been told they have to pay a consumer £X because the ADR decided they had to even where under the contract there is no reason for the payment (I have a list but its not public for various reasons, see disclosure)

    See AAISP’s pains – http://revk.www.me.uk/2012/03/farce.html as someone who has gone public

    For a non-AAISP one…

    End users modem is damaged by lightning and needs a replacement, its the end users device not provided by the ISP. ISP sends them a loan device (actually walks round to them in another building on the same business park). End users replacement modem is then struck again. End user takes ISP to ADR because they wont replace the loan unit (and doesn’t even chase the end user for any monies for the original loaner). ADR awards £500 to end user, plus the cost of a new modem…and the ISP has to pay ADR costs.

    1. Avatar DTMark says:

      Some really very odd stuff there.

      Surely almost every complaint is vexatious?

      “It has been down for three weeks now” = There is no SLA.
      “It is really slow” = There is no SLA.

      The answer to just about everything is surely “There is no SLA”.

      The OFCOM Speed code means if you sign up and the ISP fails to deliver to the estimate, the customer can cancel without penalty anyway. No ADR needed, no court needed.

      In the case of something like a mistake “a dispute” – say overbilling – if the customer knows they are right they attempt to resolve it and if all else fails, they invite the ISP to sue them. Off to court. Maybe. No ADR needed.

      Modem fails – check the contract – whose equipment is it? Was I sold it, do I lease it? Who pays for replacement? Ah, I do. Maybe I should have thought about that earlier.

      As with anything else, it would seem to be “all about the contracts” and it appears that this ADR scheme can walk all over the basics of contract law. I am not sure to whose advantage this could possibly be.

      What happens to the ISP if they refuse to work with this ADR and/or refuse to be bound by the outcome?

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