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Topics: FOS| Financial Ombudsman Service| AIFA| AWD Chase de Vere| St James's Place
The Financial Ombudsman Service (FOS) is in the process of deciding how it will go about publishing its decisions, and one of the main points of contention has been whether or not it should name the firms involved.
In a recent update, it said it would almost certainly stick to its guns on the issue and name the firms, but not the complainants, involved in cases.
Most business are against the idea.
IFAonline sifted through some of the responses to the consultation to find out why most businesses are opposed to the publication of firm names in decisions.
Perhaps the key concern is that publishing the name of the firm involved will damage their reputation, even if the decision goes in their favour.
St James's Place Wealth Management said: "The publication of complaints data has already demonstrated how the media uses such data, often out of context, to the detriment of the industry as a whole.
"The learning points of the Ombudsman's decisions would not be diminished by the omission of the firm's details."
One of the key concerns is that claims management companies will use the data they mine from the publication of decisions to refine their processes and give businesses a headache.
Zurich Financial Services said: "In relation to our life business, we frequently see complaints from third party complaint companies that use a ‘scatter-gun' approach to list many potential triggers to achieve a successful complaint outcome.
"This is irrespective of the customer's true underlying complaint. In our opinion, publishing the identity of the firm alongside decisions will only help complaint companies target firms with increased complaints.
The Ombudsman is having to publish decisions as a result of the Financial Services Bill, which is currently going through Parliament, although it made no mention of naming firms.
Reynolds Porter Chamberlain said: "The FOS was always premised on being a quick and informal dispute resolution service. Naming firms will not help resolve complaints.
"The draft Financial Services Bill is silent on whether the identities of firms should be disclosed (it merely requires that the complainants' identity should not). This is a proposal being driven by FOS alone."
Even if the Ombudsman does go ahead with naming firms, as looks likely, some are urging it not to reveal the identities of the advisers involved.
AIFA said: "These individuals are not the regulated entity. They are subject to the training and competency requirements of the firm.
"Their reputation or future employment credential should not be compromised for the sake of publication. All employee names should be deleted but they could be replaced with the employee's job titles."
Professional indemnity insurance costs have already been soaring in recent years and, according to some, the Ombudsman's plans could raise them even higher.
AWD Chase de Vere said: "The FOS should make enquires to ascertain the views of PII insurers and whether the proposals will bring further challenges to an already difficult market place.
"AWD expects PII costs to increase as a result; this does not appear to have been considered in the consultation.
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| Comment | Five reasons why the FOS must not 'name and shame' |
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Balancing act
I'm sure this is a difficult thing to manage, how do you let the nation know who are the serial abusers of legitimate claimants while being fair and reasonable under the circumstances. And, how do consumers who suspect they may have a problem with the "advice" provided by a large DSF establish that they may not be alone?
Posted by: Exasperated Me
Why not protect the public and name offenders
My opinion as an investor, not an IFA: Publishment of decisions should be up to whichever of those involved is upheld: The complained about should be able to elect for the complainer to be named where a complaint is deemed unjustified The complainer should be able to elect for the complained about to be named where a complaint is deemed justified Where a complaint is deemed 'understandable' buy not upheld then it should not be published unless both complainer and complained elect for it to be published. I would consider that published complaints should be accompanied by simple statistics re the losers past actions, but showing 100 complaints about an organisation with 100000 clients and 1 against a complainer with a single investment does present a skewed view of the problems. Claim management companies will have their own records of how to word claims and who to claim against. Not publishing details means that the IFA's and small to medium sized investment organisations do not get to know how to avoid claims ---------------- Re publishing the employee post - So a manager at the FSA declared SLS's to be "Toxic" I consider that inappropriate - if a SLS based fund with USA government guaranteed policies spread over a variety of insurers is inappropriate what about an annuity backed by a single UK insurer with no government backing Seems to me that there's more likelihood of AVIVA going bust than of the entire USA insurance providers and the USA government So - would the announcement that the manager has been deemed at fault mean that all the FSA managers should be considered unreliable, and their statements suspect? Basically employers need to know if prospective employees have been found to have behaved inappropriately, and IFA's need to know if investment organisations, or their managers have behaved inappropriately and investors need to know if IFA's and/or investment organisations have been 'bad' If not, then there will be no reason for them not to behave unacceptably, resulting in more claims, more compensation, more and bigger levies and increased PII. ----------- So rather than continue to let the bad practice by the few continue to be hidden and effect the livelihoods of the majority who act responsibly. Publish, shame, and make improper actions cost those doing it!
Posted by: James Button
Sometimes deserved
I am in the process of drafting a complaint to the FOS about the way an insurance company has handled a claim. Basically, it centres around what they say is an overpayment on a pension policy, which they now blame the beneficiary for not spotting as such. If the FOS name and shame them then it will be no less than they deserve.
Posted by: Wronged
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This is so worrying...
Go to any conference or seminar attended by IFAs and the conversations over coffee always come back to the regulator. I am always impressed at the lengths many many IFAs go to to keep their knowledge fresh and learn how to run their businesses better for the benefit of their clients. It's only the FSA that calls them Customers suggesting a person off the street popping in for one-off advice. IFAs have clients and generally from my 13 yr experience, look after them. But we can never get away from the feeling of being hounded into submission no matter how many business hours we lose improving for clients. This naming and shaming is so obviously an affront and a demonstration of just how little regard the regulators have for IFAs. Sickening. By the way, we don't have newly employed kids making big decisions as the FOS has been found to have.
Posted by: Concerned