Who do you turn to when a firm won't listen to your grievance?

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The Independent Online
Are you a complainer? Thousands of people are likely to end up seeking compensation from holiday companies this summer, and many thousands get into fights with financial companies every year.

The offending company should be your first point of complaint. But what if you don't get satisfaction? There is a range of ombudsmen and arbitration services that offer a cheap or free financial chance of redress with companies in these - and other - industries. And since the beginning of the year going to the courts has also been an option for more people. The maximum size of a small claim through the county courts has been raised to pounds 3,000. To make a claim costs between pounds 10 and pounds 65, according to size.

Small-claims hearings have been an undoubted success since they were introduced in 1973 - when the claim limit was pounds 75. They are relatively friendly and cheap. Citizens Advice Bureaux will help make claims.

But going to court can be stressful. "There is no uniformity of county courts," warns Keith Richards, a senior lawyer at the Consumers' Association. "Some are friendly, some give no help. The association recommends instead going to an ombudsman, where one exists. The good thing is that their decisions are not [generally] binding on consumers, so they can still choose to go to court afterwards." Using an ombudsman is also usually free.

But the National Association of Citizens' Advice Bureaux (Nacab) warns that some ombudsmen are better than others. It praises the work of the Insurance Ombudsman, is less happy with the Banking and Building Societies Ombudsmen, and says the Legal Services Ombudsman has too few powers. In addition, some of the ombudsmen schemes have a voluntary membership and a narrow remit. The estate agents ombudsman only covers a minority of agents.

Consumers' organisations have more qualms about other - non-ombudsmen - arbitration schemes as a means of resolving disputes. For one thing, complainants forego their right to take a case to court if they do not like the outcome - both sides commit themselves to accepting the arbitrator's decision.

A study conducted by the Consumers' Association found that the outcomes from both routes were similar, so worries seem to be unfounded that arbitration can unduly favour the trader, who is paying the bulk of the costs. But Nacab takes a more critical view of arbitration, and recommends using the courts unless someone wants to avoid the stress.

Arbitration is normally conducted on a document-only basis. Complainants are required to pay towards the costs of arbitration to avoid vexatious claims, but compensation awards are likely to repay these costs. The most commonly used scheme, that of the Association of British Travel Agents (Abta) costs between pounds 20 and pounds 50.

But how can consumers choose between an often overlapping and confusing array of channels for redress? Holiday makers, for example, may have access to arbitration from either Abta or the International Air Transport Association (Iata). "The rule of thumb," says Marlene Winfield, senior policy officer at the National Consumers' Council, "is to start off with the least adversarial way possible, which is usually the ombudsman. But you do need to check on the powers of enforcement." Ms Winfield adds that arbitration depends on the quality of the individual scheme.

Arbitration is likely to be gradually phased out in favour of increasing numbers of ombudsmen. An inquiry into improving access to justice by Lord Woolf concluded last summer that ombudsmen who oversee the financial services industry should be replicated for retail complaints. His report said: "[Arbitration schemes] are not widely used, except for disputes involving the motor trade and package holidays. Lack of publicity and a perceived lack of openness and independence appear to be the main reasons for the relatively low take-up."

Pressure of parliamentary business means it could be a long time before these proposals become law, but eventually most consumer grievances could be resolved through an ombudsman.

Banking Ombudsman, 0171-404 9944 Building Societies Ombudsman, 0171- 931 0044 Corporate Estate Agents Ombudsman, 01722 333306 Insurance Ombudsman, 0171-928 7600 Investment Ombudsman, 0171-796 3065 Legal Services Ombudsman, 0161-236 9532 Pensions Ombudsman, 0171-834 9144. The Chartered Institute of Arbitrators (0171-837 4483) can provide details of the approximately 100 arbitration schemes it arranges.