The Office of Rail and Road (ORR) has called on operators to make sure compensation forms are written in understandable English and for employees to be given improved training to help customers get their money back.
During its investigation the ORR found that progress was being made, with some rail providers using new technology to improve how customers get compensation.
However, it also disclosed that passengers’ knowledge of their compensation rights was not up to standard and that the information they receive needs improvement, Sky News reported.
ORR chief executive Joanna Whittington said: "We want all passengers to be able to claim the compensation they are entitled to. The information they receive needs to be better and the process must be clearer and simpler.
"Today, we have made a number of recommendations to help achieve improvements straight away.
"This is just the first step, and we will be carrying out further research and analysis and introducing a strong monitoring regime to make sure that the industry is delivering for passengers."
Richard Lloyd, executive director of the consumer group Which?, added: "The pressure is now on the train companies to show they can bring about urgently needed basic improvements for their customers."
Paul Plummer, chief executive of the Rail Delivery Group, which represents train operators, said the industry was dedicated to improving the process with measures including, extra announcements on trains, websites and social media.