Ombudsman criteria for judging miss-selling cases

DBV

In a recent case I took to the Financial Ombudsman, I noticed that their criteria for judging miss-selling cases appear to have changed.

Referring to Caroline Wayman's presentation (link deleted) entitled "Resolving complaints about the mis-selling of financial products", slide 15 gives the two main considerations that can often be applied - in this case to PPI products.

if the Bank gave advice or made a recommendation, did it take adequate steps to ensure that the product recommended was suitable for the consumer's needs?
if the Bank did not give advice or make a recommendation, did the Bank give information that was clear, fair and not misleading (allowing the consumer to make an informed choice)?
In our case for miss-selling of another financial product, the Ombudsman explained what she had to decide was whether the Bank’s actions "caused financial loss.” The Caroline Wayman criteria were clearly not met, and the Bank’s subsequent charges were not counted as financial loss.

Does this signal a new, tougher line by the Ombudsman on bank miss-selling claims?

dunstonh

Does this signal a new, tougher line by the Ombudsman on bank miss-selling claims?

No. Seems to be the normal position.

Advice cases have a higher criteria for checking suitability.

roonaldo

Nothing has changed or different, the suitability should be checked for an advised sale. And consequential lossess should always have been looked at since DISP was introduced.

DBV

Thank you dunstonh. I think the criteria the Ombudsman uses for deciding these cases is critical to whether you get a favourable outcome or not.
You say advice cases have a higher criteria. Does that mean when they are selling some products they have to meet higher professional standards? In our case, they ignored forms we signed to close an account and left it open without telling me. I guess that's ok if the only result is additional bank charges.

dunstonh

You say advice cases have a higher criteria. Does that mean when they are selling some products they have to meet higher professional standards?

Yes. Advised cases would be expected to have a better audit trail including a shortfall or needs analysis.

I think the criteria the Ombudsman uses for deciding these cases is critical to whether you get a favourable outcome or not.

It should be noted that adviser cases of PPI only account for around 1% of complaints at the FOS and most are rejected. Some non-advised sales by non-advisers get turned into advised sales due to poor wording by the lender and they often go on to get upheld because they lack the audit trail and there is a problem. However, lacking the audit trail is not reason for uphold by itself. There still has to be a failure in eligibility or suitability in those cases. You dont win a complaint because a piece of paper is missing if the product is both suitable and needed financially.

So, whilst the way a complaint is viewed on advised cases or non advised cases is different, there isnt a significant volume of advised cases. Advised cases have to check for financial need, suitability, eligibility and affordability. Non advised don't need to go that far. Just whether the information supplied was suitable to make an informed choice.