Cost of living crisis driving consumer awareness of Motor Ombudsman services

The Motor Ombudsman is experiencing a significant increase in public awareness, driven by the ongoing cost of living crisis which has made consumers more active in seeking help for their grievances.

Speaking at the Motor Ombudsman and Radius Law Automotive Business & Law Conference held in London on May 15, Charles Woodgate, dispute resolution manager at The Motor Ombudsman (TMO), reported that its annual surveys show that awareness is growing by 10% each year, reaching 58%.

That rise in consumer savvy, fuelled by financial pressures, has led to an increase in the number of cases and contacts received by the service.

Sadie Marshall, a TMO ombudsman, urged both manufacturers and dealerships to signpost customers to its service. "When disputes are resolved in-house, businesses should inform customers about our services. This ensures that those who need our help can access it," Marshall said. “Businesses should inform customers of their right to refer their case to the TMO and it should be clear that this service is free of charge.”

Woodgate attributed the rise to heightened consumer awareness and advocacy from figures like consumer champion Martin Lewis, as well as the increasing ease with which consumers can file claims.

The discussion also touched on the societal trend towards greater litigiousness where consumers are more willing to pursue disputes. As consumer behaviour shifts, with younger demographics more inclined to use social media for complaints, the TMO warns of the potential to escalate conflicts in unproductive ways.

"We need to ensure clear communication and consumer understanding to manage expectations and resolve issues effectively," Woodgate said. "Our goal is to restore customer relationships and resolve disputes early."

He added that the confusion between the roles of retailers and OEMs can easily lead to misunderstandings, with consumers often conflating the two which can complicate the resolution process.

Outlining the structure of the ombudsman service, Marshall explained that there are four TMO ombudsmen and if either party in a dispute disagrees with an adjudication, the case is escalated to one of them for a final decision.

Woodgate acknowledged the mixed perceptions among dealers regarding the impartiality of TMO decisions with many suspecting the system may favour consumers.

"There is a common misconception on both sides," Woodgate explained. "Dealers think consumers have the upper hand because we are funded by businesses while consumers believe we are their best friend. In reality, we operate with impartiality, strictly adhering to the Code of Practice and relevant laws."

"Our decisions are based on facts not on favouritism with around half of the cases resolved in favour of the dealer, the other half in favour of the consumer."

Consumers often worry about the time it takes to resolve disputes brought before the TMO. Sadie Marshall, here, reassured that the TMO’s aim is to resolve cases within 90 days. "We continuously expand our staff to handle the increasing number of cases and strive for quick resolutions," she said.

Woodgate added context to these timelines, comparing the TMO's 90-day target to the much longer waits in the legal system. "His Majesty’s Courts and Tribunals Service quotes an average wait of 53 weeks for a small claims court hearing. In comparison, our 90-day resolution period is quite efficient."

The rise in electric vehicle (EV) cases was noted as a growing trend with many complaints revolving around unrealistic range expectations, particularly with used EV battery performance. In addition, there has been a 35% increase in service and maintenance cases in the first quarter of this year alone.

Both Marshall and Woodgate acknowledged that some cases can take longer due to the complexity of evidence gathering and the need for detailed consideration. In fact, the TMO has seen a significant increase in complex cases since 2016.

"A vehicle is crucial for many consumers, impacting their daily lives," Woodgate noted. "Consumers expect swift resolutions, but it's important to understand the thorough process required to gather and evaluate evidence."

"While some cases are straightforward, others require more time due to the intricacies involved. Our ultimate goal is to resolve disputes in a way that restores trust and maintains relationships between consumers and businesses."