Money and Tax
This section describes the ADR options available for complaints and disputes about money, tax and financial services.
More information is given below on:
Debt
Financial services
Tax
For ADR options for consumer problems generally, see Consumer Affairs.
For ADR options for disputes about social security benefits and tax credits, see Benefits.
For more about debt and money problems, see Advicenow. From this site you can search for the best websites giving information and advice on debt and other money problems. You can also download free leaflets on problems such as tax credit overpayments, bailiffs and debt collection, or identity theft.
If you need personal advice on dealing with debt, National Debtline runs a free helpline on debt problems on 0808 808 4000.
Another source of free advice on debt is the Consumer Credit Counselling Service.
Debt
If you are in debt, or if you are owed money, there may be two types of problem:
- there is no dispute about liability for the debt, but you need to sort out how and when the debts will be paid
- there is a dispute about whether the money is owed or not
If you have the first type of problem, then ADR is not likely to be particularly helpful. If you owe money, then you or your adviser can negotiate repayments with your creditor. If someone owes you money, you can either negotiate with them, or use the small claims court (for a debt of under £5000) to try to reclaim what you are owed.
If there is a dispute about whether money is owed or not, then some form of ADR may well be an option to think about. For example, if a consumer is unhappy about a product or service, and so refuses to pay the full amount, or to pay at all, then it could be helpful to use mediation to try to sort out a solution that both parties can accept.
Another area of dispute is that of the way debt is collected. The Financial Ombudsman Service (FOS) can consider complaints involving debt collection businesses acting on behalf of consumer credit lenders - including banks and credit card companies. Even if FOS finds in favour of a complainant, however, they are unlikely to recommend a full write-off of the debt as a remedy.
Mediation
No mediation providers offer a service specifically for debt problems. Providers of mediation in Civil and commercial disputes may be able to help, but unless the debt is very large, the cost will probably be disproportionate. All courts in England and Wales offer a free Small claims mediation scheme once an application has been made to the small claims court.
Whether or not mediation may help in your case can be difficult to decide. Many money advisers believe that penalising creditors who refuse to negotiate settlements is likely to be far more effective than mediation. However, if negotiation is stalled, or if court is threatened, mediation could be an option. Courts will also expect you to consider mediation before making a court application, and can impose cost penalties if you refuse. The case of The Burchell v Bullard case 2005 is about a dispute between a couple and their builder over the quality of his building work, and whether his bill should be paid in full. In this case, the judge was very critical of both parties for running up high court costs, and not using mediation to sort out their disagreement.
Some of the reasons to consider mediation are that:
- negotiation though a money adviser has not so far resulted in a settlement
- the value of the claim exceeds the limit of the small claims procedure
- it is important to preserve an amicable relationship between the parties
- the parties want to keep their dispute and settlement private
- there is the possibility of a quicker resolution of the dispute
Other debt problems
Unresolved complaints about the Inland Revenue go to the Adjudicator .
Complaints about social security benefits need to go to the relevant body (see Benefits). An ombudsman such as the Parliamentary Ombudsman or the Local Government Ombudsman can consider complaints about mistakes in the administration of benefits, such as Housing Benefit, which can lead to arrears.
Complaints about child maintenance can go to the Child Support Agency and, if unresolved, to the Independent Case Examiner .
Complaints about a debt arising from an unpaid bill from a telephone or internet service provider can go to either the Office of the Telecommunications Ombudsman (Ombudsman Services - Communications) or the Communications and Internet Service Adjudication Scheme (CISAS).
Complaints about debt arising from a gas or electricity bill can be taken to the Energy Ombudsman.
Disputes over disputed estate agents charges can go to the Estate Agents - two ombudsman schemes.
Generally ombudsmen ask complainants to pay any undisputed part of a bill, and ask companies to hold off on any debt collection of the disputed part of the bill, until the ombudsman's investigation is completed.
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Financial services
There are a number of ADR schemes available for resolving disputes about financial services such as bank accounts, mortgages, insurance, pensions, loans and credit. Most companies offering these financial products come under the Financial Ombudsman Service (FOS) scheme.
There are a few other similar schemes dealing with disputes with financial services providers not covered by the FOS, such as:
The Finance & Leasing Association Conciliation and Arbitration Scheme (details on the Finance and Leasing Association website)
The Pensions Advisory Service
The Pensions Ombudsman
Ombudsmen
The Financial Ombudsman Service (FOS) was set up in 2001 to bring together the work of a number of bodies that had previously handled complaints about financial services, such as the Banking Ombudsman, Insurance Ombudsman and Building Societies Ombudsman. All firms that are regulated by the Financial Services Authority (FSA) are required to be members of the scheme and must comply with the ombudsman's decisions. The FOS is free to the consumer. Consumers also retain the right to take the case to court if they are not happy with the FOS outcome.
In 2008-09 the largest categories of cases dealt with by the FOS were about payment-protection insurance and credit cards. The FOS has a well-resourced consumer helpline which will advise you on your complaint – you can contact the FOS directly on 0845 080 1800. Nine out of ten complaints are settled informally by what the FOS calls ‘guided mediation’, where one of the FOS advisers speaks to the person complaining and to the financial service provider, and tries to help them negotiate an agreement about the dispute. Where this doesn’t work, a formal adjudication can be given.
Since November 2009 the FOS has been able to consider complaints about money-transfer operators.
The Pensions Ombudsman handles complaints about occupational and personal pension schemes. Its decisions are binding on both the consumer and the pension provider.
Arbitration or Adjudication
Arbitration or Adjudication is an option for some financial services disputes, particularly where the providers are currently outside the scope of the FOS. A number of independent arbitration schemes are run by the Independent Dispute Resolution Service IDRS which is the dispute resolution arm of the Chartered Institute of Arbitrators. These schemes tend to be a low-cost and relatively quick route to resolving a dispute, but there is little information available about typical outcomes. Also, unlike the Financial Ombudsman Service's decisions, arbitration awards are binding on both the consumer and the company, so using arbitration means giving up the right to take the case to court if you are not happy with the outcome. Detailed information about each scheme can be found on the IDRS website.
Most of these schemes do not involve attending a hearing. Arbitrators and adjudicators make their awards on the basis of documents submitted by the parties.
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Tax
Complaints about HM Revenue & Customs (HMRC) can go to the Adjudicator . HMRC deals with income tax, national insurance contributions, child benefit and tax credits.
Like many similar bodies, the Adjudicator's role is to ensure that the proper procedures were followed in handling a complainant's case. The Adjudicator cannot consider complaints about the actual amount of tax a complainant has been asked to pay.
If you are still not happy with the way a complaint has been resolved after it has gone to the Adjudicator's Office, you can complain, via a Member of Parliament, to the Parliamentary Ombudsman.
For disputes between charities and HMRC (or other central and local government bodies), mediation is available from the Compact scheme operated by the Centre for Effective Dispute Resolution (details on the CEDR website).
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Revised January 2010
