Financial Ombudsman Service (FOS) Update

The Financial Ombudsman Service (FOS) the UK´s official expert in sorting out problems with financial services between consumers and vendors. In their own words “They were set by Parliament to sort out complaints between financial businesses and their customers, to help with most financial services – including banking, insurance PPI, loans, mortgages, pensions and investments. If somethings gone wrong, we have the power to put it right.

Unfortunate terminology, as it seems it is the FOS itself that has gone wrong and they do not seem to have the power to put it right! In fact, MP´s on the Treasury Select Committee have launched an inquiry into the Ombudsman ever since a damning programme on Channel 4, Dispatches, was shown in March 2018. Allegedly a whistleblower has told the committee that 30,000 people are still waiting to have their cases assigned to an investigator and its chief executive admitted that as many as 8000 consumers were still waiting for a decision on their cases.

The “service” was apparently revamped in 2016 and now there are three times as many cases waiting to be heard than there were before. Caroline Wayman, the Chief Executive tried to defend the backlog by stating that it has come from “mushrooming in the number of cases”. Admittedly complaints about payday loans and the collapse of Wonga, closely followed by TSB´s IT meltdown have done nothing to help them as this has added approximately 60,000 additional complaints to the pot – she unsurprisingly states that the backlog is due to getting a lot more cases!

Employees of the FOS have themselves complained about the service they have been offering, that they are being pushed to rush cases through, resulting in rulings that are in favour of the banks as it is easier than trying to persuade them to pay compensation. Others have been leaving negative reviews about the service and about the FOS as a place of employment, with them receiving 34 one-star ratings between January and April 2017. Statements have been made by employees that the service has “well and truly lost its way”.

The review is now complete, and the findings have made several recommendations unsurprisingly it recommends employees are given more support, development and training. They must focus on continued improvement to ensure employees thoroughly investigate complaints, that there is no emphasis that they must be bias towards a particular outcome and that they need to make further investment to improve their technology systems so that staff can draw appropriate conclusions. Hopefully the implementation of these new systems will give the FOS the opportunity to rebuild customer confidence and speed up their service.