Review of the Financial Ombudsman Service

gt94sss2

The government had announced a review of the Financial Ombudsman Service and is seeking views of their proposed changes

https://www.gov.uk/government/consultations/fs-sector-strategy-review-of-the-financial-ombudsman-service

At a quick glance, several of the changes may lead to less favourable outcomes for customers.

Section62

I like the idea that the parties could request a referral to FCA for clarification in relation to a rule. Also (but probably not robust enough) the idea that cases with a potential wider impact could have a referral.

I'm puzzled by the assertions that FOS has become a quasi-regulator.  In my experience their emphasis is excessively towards "we aren't here to regulate", but maybe that is just down to the types of complaint I've had an involvement in.

If it is being made clearer that FOS aren't there to regulate, then something needs to be done to clarify when and how individuals can make reports/complaints to FCA as the regulator.  In my view it would be better to have a one-stop-shop where consumer regulatory reports/complaints could be made to FOS with a separation between those and the more conventional 'complaints' were the consumer has suffered loss.

Also, something needs to be done to improve the FOS internal complaints process.  Previously service complaints were handled by a separate team, but now they are dealt with by the manager of the caseworker involved.  It feels like there is a bit too much 'marking your own homework' with that arrangement.  There's also no easy method of complaining about an ombudsman's final decision - even where the decision is clearly not made on the basis of facts.  Stumping up for a judicial review is the only - and wholly disproportionate - way of challenging an ombudsman decision.

That could be addressed by changing the role of the Independent Assessor to include assessing the outcome of a case in the same way a judge would in a judicial review.  But that said, although the Independent Assessor says "I am independent of the service and form my own view without influence", the reality is they are supported by caseworkers of whom some appear to be former FOS staff - which in my own view does bring into question exactly how this independence could be demonstrated.

boingy

It's no surprise, given that the banks have been lobbying for years to water down the FOS remit.

There are at least two things wrong with the current system:

1. The "triage" underling person who seems to be there to put you off progressing a complaint (I insisted on proceeding and "won", so he was wrong).

2. On a different complaint, the FOS said that they had been advised by the bank I was complaining about that the complaint was outside the scope for FOS complaints. Surely it's for the FOS to decide that, not the bank. That's like a criminal telling the CPS they can't prosecute.

gt94sss2

They are also reducing the 8% interest rate used to calculate interest on compensation to base rate + 1%