From Ros Altmann:economist and pensions,
    investment and retirement policy expert

  • pensionsandsavings.com

    Shocking failings at Financial Ombudsman uncovered

    Shocking failings at Financial Ombudsman uncovered

    •  Shocking failings uncovered at Financial Ombudsman.
    •  Channel 4 Dispatches undercover investigation finds major flaws in Ombudsman operation.
    •  FOS staff who don’t understand financial products, are pressured to turn down complaints and side with banks or financial providers.
    •  Urgent action needed to ensure financial customers have proper system of fair redress.

    Tonight at 8pm a Channel4 Dispatches programme will show shocking evidence of failings at the Financial Ombudsman Service (FOS).

    Members of the public are told to complain to the Ombudsman Service if they are unhappy with financial products or services. This is often the only way they can achieve some redress from banks or other firms who have behaved wrongly. It is vital that they are treated fairly and their complaints are taken seriously.

    However, an undercover Channel4 Dispatches reporter joined FOS as a ‘trainee’ in November 2017 and discovered that staff often did not understand the products they were supposed to assess complaints on, were not trained properly to carry out their investigations, were told they had to complete a certain number of cases irrespective of how much paperwork was involved in each one and were encouraged to refuse as many complaints as possible so that they did not pass too many on to the more senior staff.

    Such practices are all detrimental to consumers and suggest insufficient care and concern for the stress and distress many people suffer at the hands of financial firms.

    Customers who complain often spend huge amounts of time putting together their cases and would be horrified to learn that their efforts can be dismissed by someone who either does not have time to read it all, or does not even understand the products they are complaining about.

    It seems that too much attention is being paid to minimising costs of the service and ‘efficiency’ targets for numbers of cases to be dealt with. These targets ignore the complexity and length of each case, obviously incentivising staff to spend too little time on the detailed work that is often needed.

    This Dispatches programme should be an important wake-up call to the industry. To restore confidence in financial products and providers, we need to be sure that poor practice and customer complaints are dealt with fairly, so people achieve proper redress. If the Ombudsman Service is so stretched, the public are denied a fair hearing. The industry may need to ensure the FOS has more resources so that its staff deal with complaints thoroughly, rather than being incentivised to cut corners and ignore customers’ problems.

    This is vitally important and may be worthy of a more thorough investigation by Parliament, to ensure the public are properly protected in future.

    9 thoughts on “Shocking failings at Financial Ombudsman uncovered

    1. I am not surprised. I went to an open day and was appalled by what I saw. It seemed little more than a call centre with telephone calls taken targets being paramount. No knowledge of the industry required. Could have been cold-calling for double glazing just as easily.

    2. Ah, but will anything be done? It’s all well and good identifying these shortcomings (for those that didn’t know they existed) but will anything actually happen…in our lifetime I mean?

    3. Dear Ros
      It was good to see both you and James Daley pushing for the government to take these shortcomings seriously, perhaps by encouraging the Treasury Select Committee to hold an inquiry. However, the programme did not say that, very often, the FOS and other official bodies (for example the FSCS) have to process claims that are poorly written, lack the necessary information and require significant further work, which inevitably holds up the decision. This is the fault of myriad claims management companies and law firms who do not do their clients justice.

      Technology has moved on in recent years, and there are now one or two companieS that have invested in high quality LegalTech processes to deliver comprehensive report that include a measure of the quantum. These reports will hugely improve the ability of the FOS to make the right decisions and ensure claimants get the redress they deserve.

    4. Ros: the programme only touched on the issue. Advisers have the same in reverse. Decisions made that ignore evidence. FOS IS a major issue in the provision professional indemnity insurance.

      Failure to stick to common law principles means there is no base to the decisions. I have advisers that have had 2 identical cases. One rejected one upheld.

      Garry Heath. Libertatem

    5. I have been a CF10 and CF11 and I advised my brother to complain when i discovered the cover up perpetrated by an agent of L&G. Despite the lies told by the agent that could be disproved by my brothers job, his bank statements and the fact find supplied by L&G dated 6 YEARS AFTER the application they found there was no case to answer.
      On a previous case I tried to contact the independent assessor only to find that the ombudsman had already been in contact and i was advised to accept the FOS terms or else face reporting to the FSA by the assessor – which i had originally but because the Ombudsman gave my firm instructions on how to calculate a claim which gave the client not as much benefit as they wanted to, they changed the basis of the calculation.
      So I have seen it both ways and each time unjustly served, especially as the first one was fraudulent information and the second one a fraudulent claim that they supported.

    6. FOS is supposed to be an impartial adjudicator and NOT a consumer champion. FOS’s problem is the sheer volume of complaints which is an easy fix. Merely levy a nominal charge of between say £100 and £250 depending on size of claim, waive it for those on benefits and refund the successful. Make claims firms pay double on the same terms. Less volume = more time which hopefully means more considered & equitable solutions.

    7. This is only the tipoff the iceberg. The idea that Ombudsmen services are there to help the public is farcical

      Perhaps it is time for other Ombudsman’s services to be closely looked at too.

      Starting with the Pensions Ombudsman, who has no regulator and is absolute in its decisions, and are not required to explain or answer any questions.

    8. FOS breaches article 6 & 7 of the ECHR. FOS is a quasi judicial body, exempt from rules of evidence, the right to an impartial tribunal and worst of all denial of a right of appeal, a right that it does not deny to the plaintiff/consumer. If that right of appeal was granted to the adviser and to the courts, then at a stroke FOS would become apply just and balanced judgment …. but only because the courts would insist.

    9. I have telephone calls in my possession accidentally disclosed to me by FOS with regard to my complaint to FOS that show a parallel universe at FOS distinct from what they actually document which is a fraud on the public and indicates a public office that is not fit for purpose.

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