Not only do they offer a solution to intractable problems. They also flush out traders who try to evade their responsibilities, by banking on customers' reluctance to use the courts. But most important of all, they encourage all firms to take complaints more seriously. My thirty years in the aluminium business taught me that the best approach for firms is to settle complaints promptly, fairly and amicably. That way not only the customer benefits.
Firms benefit too from increased customer loyalty and word of mouth advertising.
And they avoid the cost, distraction and potential damage to their public image and investor confidence, which protracted disputes can lead to. Of course sectors which had an effective redress system would also enjoy increased consumer confidence. The numbers using them certainly indicate that ombudsmen are more popular with consumers than independent arbitration sponsored by trade associations. The benefits consumers perceive are that ombudsmen are free, have the capability to investigate as well as adjudicate, and are seen as more independent. Some consumer bodies also feel that arbitration has an off-putting feel of legal confrontation about it.