Consumer Power: Want to ask the Financial Ombudsman a question?

magpiecottage

mikejharvey wrote: »

Whilst trying to argue for more compensation for a mis-sold endowment mortgage, (Under £400), my mother became seriously ill and subsequently died. When I got back on the case I was told that I was now outside the 6 month time limit to complain to the FO. Is that true, can't you still look at it?

As a GENERAL principle because, as Equaliser123 rightly says, this is NOT about individual cases, you MIGHT be able to argue exceptional circumstances in this situation - though you would probably need the medical evidence to support this.

You can insist that a ruling on jurisdiction is itself made by an Ombudsman. If that happens then if the Ombudsman decides he has no jurisdiction that will be the end. If he decides he does have jurisdiction it will go back to an adjudicator to consider its merits and if either side disagrees with the adjudicator, it will go back to an Ombudsman (which need not be the one who ruled on jurisdiction).

di3004

I understand that the FOS does not have to look at calculations following redress, but if asked they are willing to forward these on to get them checked.

Not all FOS upheld cases are given/shown the amounts due but are informed they will receive full redress on for example ppi paid, plus interest etc, so due to this its accepted, but when paid out the bank doesn't send a detailed written breakdown, therefore how would we know for definate if the right amount was paid out?

Not everyone are good at working out calculations, so with the claim being resolved and upheld by the FOS - some customers will ask for the calculations to be checked.

For this I am aware that the FOS calculations team have to ask for more information of the calculations from the bank or company and this have been known to take some time.

Some have been waiting up to about 6 months since being paid out and requested for calculations to be checked and have asked the banks to re-assess.

Is there a certain timescale on this matter?

Thanks.

roonaldo

letdown wrote: »

why do the FOS take no action against Banks that fail to comply with the Banking Code and pursue non-existant arrears for six years, act contrary to the Law or good business practice.

why will the FOS not answer this direct question - why do they think it is equitable that a Bank be allowed to debit an innocent customers account with all the Bank Costs incurred in pursuing non-existant arrears ?

point 1 is more relevent to the FSA not FOS. FOS deal with complaints, FSA do regulation.

roonaldo

Why do FOS pay their own staff £23,500 pa, yet hire 200 contractors earning £50,000 pa (£210 per day)??

Wol2

Without going into too much detail, I am trying to recover financial losses incurred as direct result of the way my house insurance claim for flooding was misassessed and subsequently rather poorly administered by the insurance company and more specifically their agents including the loss adjusting firm.

QUESTION 1
I realise adjudicators need to be impartial but what are the guidelines (if any) issued to them about what they can and can't say to someone like myself in order to assist with evidence gathering and aid/speed up the decision-making process? Are they permitted to request further evidence of a particular nature during the adjudication process in order to reach their decision or do they just purely rely purely on what you the complainant decide to submit?I ask because the adjudicator handling my complaint just says "send me anything you think is relevant or want us to take into account" and will not confirm or deny receipt of the original file of evidence that accompanied my complaint to the insurance company and which I was told the adjudicator would request from the insurance company as part of the adjudication procedure. I am not a solicitor - and I have no wish to bombard the FOS with reams of what may be unecessary paper thus lengthening the process even further. Surely if the FOS is meant to be consumer friendly then some sort of guided request for information should be forthcoming?

QUESTION 2
Clarification from the Chief Ombudsman please about jurisdiction -all the information on their website (and the advice from the numerous discussions with their call centre staff about my case prior to referring my complaint to FOS) indicated FOS was the right way to pursue this and the complaint fell within FOS jurisdiction. The last adjudicator to receive my case in May this year informed me in a telephone call I had made to progress the complaint that if I wanted remedy for the majority of my complaint then I should be pursuing the insurance company in court for breach of contract However this "verbal advice" was not included in the final adjudication which instead stated that consquential losses were not covered under the terms and conditions of the insurance policy. What powers do the FOS have to make adjudications for breach of contract if any or is court the only remedy?

QUESTION 3
The adjucation document setting out the findings does not provide any information or justification as to why the adjudicator has reached the decision they have on the majority of the claim. Yet the first section relating to small itemised costs was dealt with in great detail. Most importantly in my case - on what basis/point of law has the adjudicator deemed the costs I am claiming for as "consequential losses" when from my understanding these are essentially damages for breach of contract. I would like to ask why the adjudication document does not give the reasons behind this part of the adjudication and ask how someone like myself can "submit any relevant evidence" for the review I have requested if i do not know the reasons behind the decision?

P-G_2

The Saturday 2nd October edition of The Times has a long article on the first page of the Money section about FOS problems and issues. Two separate cases described in some detail.
Several questions there for the MSE list, like " Why dont FOS experts check calculations ? Ordinary consumers cannot do these sums ".
I am not allowed to post links but its a Times article by journalist Mark Atherton

anthonyfca

technical forum note: as a new poster I have had to disable links with a space after each h of http, copy and paste the links into your browser and delete the space and the links will work. Last tested yesterday.
A s new user I have sought to meet posting rules so please pm me if I need to alter aspects of my presentation. I wrote this article for a different audience, but the opportunity offered here is excellent. I hope it reads acceptably.
=====================================================

To the Ombudsman:

Can a shareholder claim against the company's bank?

If not, would it be right that they should be able to?
What if the shareholder is a consumer?
Can the shareholder be a consumer?


Ombudsman Service h ttp://en.wikipedia.org/wiki/Ombudsman

INTRODUCTION

This is about small company shareholders who find their shares have been devalued by the maladministration of a bank or other institution, being able to seek redress through the Financial Ombudsman Service.

What is maladministration?
h ttp://en.wikipedia.org/wiki/Maladministration

Maladministration is a political term which describes actions which can be seen as causing an injustice.

The law in the United Kingdom says Ombudsman must investigate ‘maladministration’. The definition of maladministration is wide and can include:

Delay, Incorrect action or failure to take any action, Failure to follow procedures or the law, Failure to provide information, Inadequate record-keeping, Failure to investigate, Failure to reply, Misleading or inaccurate statements, Inadequate liaison, Inadequate consultation,Broken promises.

My discussion in support of the following statements (1) and (2) is presented below, based on the definition here:

h ttp://fsahandbook.info/FSA/glossary-html/handbook/Glossary/C?definition=G210),

(1) "Company officers, consultants and employees are all excluded for acting for purposes inside their trade, business or profession per the FSA glossary for "consumer" whereas this not the case for every shareholder".

(2) "In addition, a consumer is unique in being eligible to make a complaint where the relationship is indirect. Privity of contract is suspended in the definition of a consumer."

A note about "Privity of Contract"

Within (2) above I mention "privity of contract". This concept underpins contract law everywhere. I have added this section to emphasise how fundamental an alteration to our normal understanding of the application of our laws is effected by allowing complaints to cover indirectly affected consumers. Such an alteration means that our standard evaluations and assumptions require careful re-examination in these cases.

h ttp://en.wikipedia.org/wiki/Privity_of_contract


AUTHORITIES - from the online FSA Handbook.

DISP(ute) 2.7 Is the complainant eligible?

h ttp://fsahandbook.info/FSA/html/handbook/DISP/2/7

Throughout the manual there is a distinction between a "natural person,(and) a legal person...". The word "person" is used to include both, whereas "natural person" means a human being; so the distinction clearly appears to be intended by the draughts-people. Definitions are always hyper text linked, so where there is no special definition, the general English language can reasonably be assumed to apply. The link to "person" is here:

h ttp://fsahandbook.info/FSA/glossary-html/handbook/Glossary/P?definition=G869

Interestingly, "maladministration" itself is not defined, which leaves it open for banks and institutions to invent as many methods of bad administration as they wish.

THE RULES

2.7.6 States that the complaint must arise from 1 or more of 14 types of relationship with the bank or other institution or department (respondent). Relationship Type no 2 within 2.7.6 states that the bank (respondent) must be a potential payment service provider or potential supplier, to the complainant. Direct debits are included as payment services here:

h ttp://fsahandbook.info/FSA/glossary-html/handbook/Glossary/P?definition=G2617

2.7.6 uses the word "complainant" in each of the 14 relationships. It occurs to me that the undefined word “complainant” encompasses every conceivable category of complainant including both "ineligible complainant" and "eligible complainant", 2.7.6 is NOT concerned with whether or not the complainant is otherwise eligible, but purely with the type of the relationship. For the record I can not offer suggestions for possible types of complainant beyond eligible or ineligible. If the type of relationship is not listed, then an eligible complainant becomes ineligible. However, the complainant is as defined elsewhere, including consumers and indeed others.

2.7.3 States that a consumer is an eligible complainant provided they are not engaged in the relationship in any business capacity, which is worded as: “any natural person acting for purposes outside his trade, business or profession.” Simple enough.

2.7.3 also states at para 2 “a person” at para 2b “ who has rights or interests which are derived from, or are otherwise attributable to the use of, any such services by another person; “. NOTE “person” includes a company. This so states that the link between the consumer and the respondent does not have to be direct, it means the consumer can be a person who has rights or interests derived from or otherwise attributable to the use of services by another person. See "privity of contract" section above for why this is fundamental.

PUBLIC INTEREST

My understanding is that the complainant is, or can be, the consumer and not necessarily the "person" in the middle. The point being that the complaint has life through the consumer regardless of the existence or otherwise of "another person" (including company) in between.

So if a bank effectively unfairly disadvantages a consumer shareholder by causing unfair disadvantag to the "other person" then there is proper accountability to the consumer. Which one might consider is as it should be, banks should be accountable and take responsibility for their actions just like everyone else, and not be able to hide behind the fact that for example the intermediary person (i.e. a company) no longer exists especially when that ceasing to exist was caused by the bank. Allowing this would be to allow banks to cover their tracks by bankrupting their customers.

It occurs to me that bank maladministration in these circumstances is rare and therefore this issue could be unique in the life of the FOS to date. I say "rare" because one would hope that banks usually have perfectly good reasons for the closure of businesses and are not the cause of it through maladministration: in this case agreeing one thing and then doing the opposite.

REVIEW

The glossary uses the verb "to act" in the phrase "acting for purposes". Given the legal persona of a company, shareholders are clearly neither employees and officers nor acting by virtue of being a shareholder within any trade, business or profession. Of course a shareholder can be any of these, but that is not the same thing. In life we all act in many different capacities. So for example acting as a stockbroker or other trader in securities could be for purposes inside their trade or profession etc, but that requires skills for the trading of shares.

A shareholder does not, indeed can not "act" other than in general meetings of members of a company where they exercise oversight of their investment. Outside that investor act (being none of trade, profession, business, vocation, employment or office) a natural person shareholder simply exists as a consumer. I do not believe shareholder meetings would/should be categorised as acting within a trade, profession, business, vocation, employment or office because they are enacting oversight of their investment, which is not a trade, profession, business, vocation, employment or office. Again a professional exercising their profession would be different and make that shareholder not a consumer.

Attendance at any company AGM will show the presence of large numbers of consumers side by side with the professionals. Clearly consumer shareholders have rights and interests (per the glossary of defined terms) because that is the very nature of shares, and this does not amount to acting in business (to save repeating the list again). Clearly the professionals are expected to know what they are doing and consumer protection is not extended to them. Most consumers being unaware will not be persuaded by the actions of a bank and so this situation will arise rarely, indeed taken with that, the banks one hopes do not often maladminister things (which includes making mistakes).

CONCLUSION

Seeing a shareholder as a consumer may be intuitive for the general public and perhaps the only real issue in such a case. I cannot, however, find anywhere any text that excludes shareholders impliedly or expressly by definition, including a short review of Financial Ombudsman Service Ltd newsletters. Ordinary shareholders are not in business, they are investors, which statutes expressly distinguish from trading in business, professions, vocations or employments or offices. Case law abounds with argument about the distinguishing features. The FSA exists to regulate financial services surrounding financial instruments and no one is suggesting that buying a financial instrument including shares, is sufficient to stop a consumer being a consumer.
From the above my conclusion is that if the shareholder can indeed be properly classified as a consumer, then a consumer complaint can be available to pursue via the indirect link of "another person".

Anthony Mellor F.C.A.
Chartered Accountant
Working to Professional Standards
T +44 (0) 121 314 4750
E forum @ mellor.co.uk

INSPIRING CONFIDENCE

Regulated by:
The Institute of Chartered Accountants in England and Wales (ICAEW), Chartered Accountants' Hall, Moorgate Place, London, EC2R 6EA

UK Business Superbrand 2010

anthonyfca

I should have ended with a question, or asked the Ombudsman to respond with their opinion please.

So now I ask the Ombudsman, what do you think of the above post please? Is my conclusion correct? Does it have merit? Is it in the public interest? Are shareholders capable of being consumers in some circumstances in your view?

Kind regards

Anthony Mellor

MichaelAig

It would appear that quite a few insurance companies who are regulated by the FSO, use the FSO lable more as an advertisement to assure customer that they are a good compan, rather than following the rules set down by the FSO.
I refer to one insurance company that made a point of stating to me and the CAB representative, acting on my behalf, that if we were not satisfied with the way they were dealing with my complaint we could take up the case with the FSO.
They repeateadily made us aware they had eight weeks in which to resolve my issue.
Isn't this way to long especially when individual circumstances are reviewed and this eight weeks is added to the number of weeks the 'customer' has to endure/exhaust the insurance companies own internal process as recommended by the FSO.

wealdroam

MichaelAig wrote: »

It would appear that quite a few insurance companies who are regulated by the FSO, use the FSO lable more as an advertisement to assure customer that they are a good compan, rather than following the rules set down by the FSO.
I refer to one insurance company that made a point of stating to me and the CAB representative, acting on my behalf, that if we were not satisfied with the way they were dealing with my complaint we could take up the case with the FSO.
They repeateadily made us aware they had eight weeks in which to resolve my issue.
Isn't this way to long especially when individual circumstances are reviewed and this eight weeks is added to the number of weeks the 'customer' has to endure/exhaust the insurance companies own internal process as recommended by the FSO.

I thought the eight weeks were the time the insurance company had to investigate the complaint before the FSO could get involved.