Rise in UK Telecoms Firms Choosing to Compensate Consumers

A new study by Servion, which requested data from the Financial Ombudsman and Ombudsman Services (ADR), has claimed that the percentage of complaints that resulted in financial awards has risen over the past year by 15% for UK comms providers (mobile, broadband and phone etc.).

Overall it’s stated that 82% of complaints, related to communications service, resulted in the provider (ISP) paying out compensation. The communications sector was also said to have seen a large rise in complaints, which were allegedly up 132% on 2016 (growing from 12,715 to 29,503). The most common financial remuneration given out in all three years examined was found to be around £50.

However, a few of the firm’s statistics appear to stem from OS’s 2017 Consumer Action Monitor (CAM), which was published in February 2017 (here). In that report the figure of 29,503 is actually said to reflect the total number of communications complaints that had been “resolved“. The original CAM study noted that UK people made 55 million complaints during 2016 and 13% (6.9 million) were telecoms related.

Shashi Nirale, SVP and GM for Servion (EMEA), said:

“Consumers will no longer accept a poor customer experience, hidden costs, or sub-standard services – and organisations that aren’t keeping up are paying a heavy price. Paying out for the majority of customer complaints is simply not sustainable.

As this data from the Ombudsmen services shows, companies that continue to offer a substandard customer experience are making a costly mistake. Not only are their finances suffering, but their reputations are taking a similar nosedive.”

As you’d expect Servion, which is a customer experience specialist, has a vested interest in trying to sell the latest solutions to improve customer support (i.e. take what they say with the usual pinch of salt). Put another way, the company is perhaps more focused upon making related support systems more efficient than actually improving national broadband and mobile network infrastructure, which is a much more complex problem.

At the same time we shouldn’t forget that financial compensation is often not the goal of complaints and indeed most consumers would rather just have their problem fixed, or to know they will have a better experience in the future (an apology wouldn’t hurt either).

Ofcom have recently set out a new system for Automatic Compensation (here), which will force ISPs to compensate UK consumers for a total loss of broadband connectivity; albeit only under certain circumstances (e.g. the outage must last longer than 2 working days). Missed engineer appointments and delayed installs will also apply.

However the complexity of introducing this new system means that it won’t be enforced until early 2019.