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Topics: BIBA| Lloyds Banking Group| ABI| Barclays Bank| blog| Bank of Scotland| FOS
Last week, the financial ombudsman (FOS) published, for only the second time, the number of complaints against authorised firms referred to its office.
It revealed – predictably given their sheer scale – that banks suffer a near-monopoly on consumer grievances.
In fact a third of complaints – almost 30,000 – referred to the FOS in the second half of 2009 were against just three high street banks: Lloyds TSB, Barclays and the Bank of Scotland.
The only financial advice firms to appear on its list were – surprise, surprise – among the largest out there. But even they paled into insignificance compared to the banks.
Sesame, for example, an appointed representative network boasting some 3,000 advisers, had fewer than 100 complaints against it referred to the ombudsman.
As well as publishing the number of new complaints, the FOS also revealed the percentage of those complaints later found in favour of the consumer.
Again, banks dominated - Barclays, for instance, which had almost 10,000 complaints referred, was found to be in the wrong in 65% of cases.
All this, one might conclude, would be welcomed by the financial services community.
After all, what does the data show? It shows banks are swamped with complaints and IFAs, even taking into account their comparative size, are not.
But it seems the FOS's publication of complaints data have simply presented another opportunity to criticise the ombudsman.
From where did the disapproval stem this time? The way the ombudsman presents its statistics.
Trade bodies the ABI and BIBA said the format of the data – which does not include complaint per product type per provider – was ambiguous and does little to help consumers. The ABI even started singing the praises of its own complaints charter.
Advisers got involved too. One said: “After 25 years of regulation, one would expect meaningful stats!” Another added: “The FOS is the worst of the three F-Pack organisations. It is also the largest politically-correct ‘ambulance chaser’ in the UK.”
At least the advisers have a point. After all, the FOS charges £500 fee per case even if no wrongdoing is identified. It may grant three free cases per year, but AIFA, among others, say it simply is not enough.
But the ABI hasn’t a leg to stand on. Not only was it on the consultative team tasked with coming up with a clear way of communicating the statistics, but it has completely misread the FOS’s intention.
The ombudsman says the purpose of its complaints work is not to inform consumers, but to encourage businesses to handle complaints better and treat their customers fairly by publishing their grievance records.
It will come as no surprise to readers that advisers still do not like the FOS. But its work on complaints should be applauded, not vilified.
Scott Sinclair, news editor, Professional Adviser
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| Comment | From the Editor: In defence of the FOS |
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FoS not consistent or accurate
Im sorry I have to disagree. Ive seen firsthand the results of the FOS work although thankfully not as a defendant. Alas none of the claims went in favour of the indidviduals despite overwhelming evidence in their favour. A perfect example was a case where an elderly lady had inherited a significant amount of money off her husband, it was in writing that she wished to give a large chunk of it to her children immediately as a gift. The adviser in question convinced her it would be more tax efficient to invest it into a bond using a discretionary trust and give them the money after 7 years instead when it was free from IHT. On top of this the illustrations post dated the application and the brochure contained out of date tax information for trusts. Oh did I mention the adviser took £30,000 in commission for the case. The shortened final FOS response: "shes wealthy enough to know what she was doing". Ive also seen the exact opposite where the adviser has done everything correctly, it was good advice, the paperwork was correct but the FOS has found against them on a minor technicality that couldn't possibly be forseen or avoided. Please tell me on this sort of basis how the FOS are doing a good job?
Posted by: Kev S
Without the law
there is no certainty and the FOS is NOT an alternative dispute resolution servic (ADR), they apepar to be an inconsistent judge jury and executioner who uses no precent other than what is convenient to the F-packs political masters at teh time of the claim and NOT at the time the advice was given. If we do not have a right to defences under the law, we are outlaws and outlaws respond as such. Give us TRUE ADR i.e. an adult discussion with mediationby the ADR so both parties can come to an acceptable agrement withou accepting fault OR should tehy wish, decline to submit to ADR and proceed to court but be prepared for a much bigger bill if you loose and possibley an "I told you so" traaing development plan enforced if you loose IN LAW. The only complaints I have been involved with which have gone to FOS have NOT been about my firm, they have been about Banks and insurers and in LAW, the client's probably WOULD win and yet the FOS seem incapable of understanding even basic duties of care on the part of the Banks and Insurers. The one complaint I have had in 12 years, the solicitor who introduced me to the client in thr first olace now thinks the client was an accident waiting to happen and we BOTH wish we'd just walked away in the first place and not tried to HELP. It's not gone to FOS and the client still has 3 months to should they wish, but I now doubt they will having supplied a recording of the mettings with the client on which you can hear her making statements which totally contradict what has been said in the letter of complaint. In any other circumstances, one would think it enough to say, right "see you in court", but not with the FOS who are just as likely to dig and dig until tehy find a procerdurally error which was NOT material to the advice and end up supporting the client getting away with FRAUD..........
Posted by: Phil Castle
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Sorry but to suggest that the FOS is only publishing this data "to encourage firms to improve complaint handling" is utter nonsense. How about the irresponsibility of misleading the public by publishing it without context. IT is not the Job of the FOS to police industry complaint handling - That is the job of the FSA. The sooner the FOS start to concentrate on their core job (ie to mediate and adjudicate on complaints FAIRLY) the better.......
Posted by: complaints manager