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MSE News: Financial Ombudsman Service shake-up plans revealed – but Martin warns of 'protection gap'
Plans to reform the Financial Ombudsman Service, which settles disputes between financial firms and consumers, have been revealed by the Government and the regulator today (Monday 16 March). But MoneySavingExpert.com founder Martin Lewis has warned that the overhaul could create a "protection gap", with diminished trust and disengagement from consumers…
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Comments
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Fairly unbalanced reporting, the existing setup has a "gap" that our elected politicians who set the UK legislation can be overruled by the Ombudsman because they dont think it's "fair". Our democracy already has the checks and balances on legislation without needing an ombudsman who can choose to ignore it.
The FOS is an alternative to courts but their statements that they arent bound to find the same outcome as the courts has always jarred especially as you can ask for a court order based on an Ombudsman's decision without the courts consideration of the matter.
Will be interesting to see if the FCA decides to adopt some of the ABI guidelines that the FOS have previously applied to non-ABI members as "industry norms"
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Rather than mess with FOS, how about make all the fly by night claim companies be regulated.
Life in the slow lane0 -
The FOS is hardly impartial at the moment - I've overturned decisions by issuing county court claims. Ombudsmen aren't even legally qualified. They make unreliable and legally questionable decisions which of course benefit the financial firms who pay the FOS case fee. I use them purely to flush out the arguments and evidence from the financial firm and then use that in the subsequent court claim.
The other ombudsman bodies are no better, e.g. Legal Ombudsman, Ombudsman Services, CEDR/CISAS, to name a few… all side with the companies who fund them.
Don't believe me? Look up their Trustpilot and Google reviews… all those consumer reviews can't be wrong.
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You are aware that FOS is not a court, as such has no legal powers?
Life in the slow lane1 -
They arent supposed to be legally trained or a court of law, indeed many of their decisions point out at they arent a court of law and are legally bound to find "fair" outcomes not what a court would find.
In practice is fairly universally agreed that means they are more biased towards consumers than the courts because they frequently give something to a consumer to be "fair" which there is no chance in hell a court ever would have.
As to trustpilot, the soundbites people post give no way the level of detail to understand what the case is, what the rational for the decision was etc for anyone to judge if they are reasonably aggrieved or were totally in the wrong.
Would love to know any of the DR references of the cases you say you have successfully litigated on and had a different outcome. All the cases I've ever seen went to judicial review meaning it had to go to the High Court and I have only seen a single case where the customer initiated the review and won. I know a couple of cases where the insurer won, though that didnt overturn the decisions in question but impacts future decisions.
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Don't believe me? Look up their Trustpilot and Google reviews… all those consumer reviews can't be wrong
Yes they can…. people on the internet as very frequently wrong. Very obviously so once you consider survivorship bias - anyone who takes a complaint as far as FOS obviously thinks they are correct. That they complain when their claims aren't upheld doesn't indicate that their claims were valid, it just means that they thought they were - which is a given. Their opinions can hardly be described as unbiased in that regard.
Funding coming from FIs also doesn't indicate a bias given that the FIs have to fund the FOS - it's not some lobby funded by voluntary donations. They can't withhold funding if decisions don't go their way, it's a legal requirement.
If you wish to demonstrate bias in FOS decisions, you need a review of their decisions made by a panel of experts. Without that all you have is the hearsay of people who are upset things didn't go their way.
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Looking at TrustPilot and Google reviews, you realise that the vast majority of reviews are either bots or total idiots?
The majority of FOS complaints are either partially or fully upheld, even with all the spurious claims submitted toi them. When people say that they think the FOS is biased, what they usually mean is that they did not rule in their favour to their nonsensical claim.
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If you believe me/don't believe me, I'm not bothered either way. I have won County Court Judgments against firms where the FOS didn't uphold the complaint. It's important that members of the public start speaking up about what isn't working properly so they know the FOS does get it wrong to the benefit of the financial corporations who fund the service.
34% of FOS complaints were upheld according to their own site. Not quite the majority.
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Im not doubting you just saying you are the first person who claims to have done so and as such would be interesting to see the cases hence the request for the DRN reference. Naturally the refusal to provide a couple does then start to raise questions of the reality.
As I'm sure you know all decisions made by an ombudsman at the Ombudsman are published on their website.
The uphold rate varies significantly across products, there are some where the majority are upheld and some where very few are. The overall average tends to be around 34% since PPI is behind us. Its fairly logical that the uphold rate would not be the majority, after all this isnt a question of if the majority of complaints overall are upheld but only those where the FS company have already considered the complaint, sometimes more than once, and the customer has rejected the outcome.
The Ombudsman is a no lose option for a customer, it doesnt cost them to use the service and worst case in most cases is the status quo is maintained. There are hundreds of cases on this site each month where the poster is simply wrong but they are recommended to go to the ombudsman anyway
You also see the industry changing practices based on decisions. The majority of Home insurance policies dont include matching set cover so if you have 6 dining chairs that arent made any more, you break one traditionally the insurer would pay you the value of 1 chair and if you didnt have matching set coverage the fact you can't buy a replacement is your problem, if you did pay for matching set cover they would pay you the value of 6 chairs.
For reasons beyond comprehension the FOS decided that was "unfair", despite the customer having chosen the cheaper coverage, and so routinely was saying the insurer should pay 50% towards the undamaged items too. These days most policies now state under matching sets that they will make a 50% contribution.
It will be interesting to see if we go back to a more legal approach rather than "fair" if insurers go back to the old wording given there was no legal basis to force them to pay out on a coverage the customer chose not to have.
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