FOS attacks banks handling of investment complaints
Share
The Financial Ombudsman Service has hit out at banks’ complaint-handling processes as it reveals 65 per cent of all FOS cases in 2010/11 were brought against banks.
The FOS’s annual review for the year to March 31, 2011, published this week, shows the number of bank-related complaints rose to 65.5 per cent over the year, from 61 per cent in 2009/10.
In 2010/11, banks accounted for 80 per cent of complaints about banking and credit, 77 per cent of PPI complaints and 68 per cent of mortgage complaints. Banks also accounted for 21 per cent of investment complaints and 9 per cent of pension complaints.
The FOS says financial services firms are fighting complaints more aggressively. It cites one case where a major high-street business resisted settling investment complaints without ombudsman intervention and another case where the business tried to prove the investment risk was mitigated by other factors.
The FOS says: “Disputes we have seen over the year have been characterised by the businesses involved taking entrenched positions and showing reluctance to accept what appeared to us to be clear evidence of misselling.
“The evidence of businesses taking a more legalistic approach to consumer complaints is disappointing.”
The FOS says it continues to see complaints about misleading fund descriptions, particularly involving the use of terms such as “cautious” and “cash”. The ombudsman says it is pleased the issue has been taken up by the regulator and trade associations but says this may have been overdue.
In November, the FSA labelled the use of the word “cash” in fund names as “potentially misleading” and unveiled a clampdown on money market funds.
The FOS says it is also seeing an increase in complaints from homeowners who have had applications to transfer their mortgage to another property turned down. It attributesthis rise in porting complaints to tightening lender criteria.
The FOS says: “In our experience, it is helpful if a decision on lending is clearly communicated and explained.”
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
Readers' comments (1)
Simon Mansell | 18 May 2011 11:14 am
What a daft statement: The FOS says financial services firms are fighting complaints more aggressively!
Well of course they are their PI obliges them to and after all the case only gets to the FOS because the firm has already turned down the complaint.
The other daft statement made by the FOS is that the firms are turning down complaints in spite of clear evidence of misselling. The FOS does not follow the laws of evidence. When a dispute, whether relating to a civil or criminal matter, reaches the court there will always be a number of issues which one party will have to prove in order to persuade the court to find in his or her favour.
The law must therefor ensure certain guidelines are set out in order to ensure that evidence presented to the court can be regarded as trustworthy i.e. The law of evidence.
The FOS does not follow the law of evidence or the Statute of Limitations! There is rarely an oral hearing. And there are good reasons to believe that sometimes FOS makes substantial awards in cases which would be rejected by the courts. There is no appeal on the merits.
So let us not take lesson in judicial matters from a quasi judicial body that does not operate withing the rules of evidence.
Unsuitable or offensive? Report this comment