Independent Review of the Financial Ombudsman Service

Independent Review of the Financial Ombudsman Service

Following the airing of an episode of Channel 4’s Dispatches documentary series in March 2018 which focused on the activities within the Financial Ombudsman Service, the independent review into the allegations has now been published.

The documentary, as we previously reported, involved an undercover reporter being recruited into FOS and interviewing staff about the practices in place. Amongst the allegations revealed were claims that cases were often resolved in favour of companies over individuals as it was quicker and easier and that staff were improperly trained and were ill-prepared to consider complaints about complex financial products.

In response to the program, Richard Lloyd, former head of consumer group Which?, was appointed in April 2018 to carry out a review of FOS to include its cases, staff, training and structure. Although the report is to be scrutinised by MPs of the Treasury Select Committee, who will also hear evidence from Mr Lloyd as well as head of FOS, Caroline Wayman, many will note the speed with which this report has been completed. Unlike many other such reviews which often meet with extensive delays, this was completed in just 4 months. Although the report does highlight some areas that should be the subject of more detailed investigations, many will no doubt question the thoroughness of the work that has been completed to date.

Overall, the review appears to be generally favourable for FOS. Most notably the more severe allegation about deciding cases against consumers raised within the Dispatches show have not been found to have been backed up by the evidence examined. As stated within the report, “there is no evidence of systemic bias”.

In relation to training, the report makes reference to several internal sets of reference materials that are made available to staff. These are designed to offer guidance based on the current state of the law and ombudsman practice. It is also highlighted that over the past nine months, an “academy” system has been put in place through which new staff are provided with an initial six months of on the job training. FOS has been nonetheless recommended to review this process on an ongoing basis to ensure that required standards are met.

Commenting on the report, Nicky Morgan, chairwoman of the Treasury Select Committee, is quoted by the Financial Times as saying, “trust in the FOS has been damaged. The report makes a series of recommendations for the board to consider in order to improve confidence in the quality of the FOS’ work and, in turn, in the financial services industry. The board must demonstrate they are up to this job.”

Given the upcoming scrutiny of the report this week, this is likely to be a story that sees a lot more coverage over the coming weeks and the investigations into FOS are unlikely to stop here.

View the published report here. 

If you have been affected by any form of banking misconduct or have already referred a case to the Financial Ombudsman Service, we would like to hear from you. Seneca Banking Consultants are experts in assisting clients with pursuing complaints against banks through any avenues available.