Aifa calls for FOS review
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Aifa is to lobby for a comprehensive review of the role and accountability of the Financial Ombudsman Service.
The FSA published a consultation paper on complaints handling today in order to drive up industry standards. The regulator also proposed raising the limit on awards by the FOS from £100,000 to £150,000.
Aifa director Robert Sinclair (pictured) says clearly the proposal to increase the awards limit is not good news for firms, but says advisers should bear in mind that the impact will be greater for other parts of the industry as IFAs make up less than 2 per cent of claims.
But he says: “This consultation does raise questions about the overall operation of the ombudsman. With the current changes to the regulatory architecture there should also be a complete review of the FOS’ role and accountability.”
Sinclair says the trade body will push for the review as part of its response to the Treasury consultation paper on the future of regulation.
He adds: “There has been a regulatory creep where the FOS has shifted from a dispute resolution service to an organisation that seems to act as both judge and jury.
“Its original purpose was to arbitrate to reconcile parties to an agreed solution on a fair and reasonable basis. Too often in recent times they appear to act in a quasi-judicial way. This is not a positive development for either consumers or the industry.”
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Readers' comments (15)
David Trenner - Intelligent Pensions | 30 Sep 2010 5:24 pm
“There has been a regulatory creep where the FOS has shifted from a dispute resolution service to an organisation that seems to act as both judge and jury.
“Its original purpose was to arbitrate to reconcile parties to an agreed solution on a fair and reasonable basis. Too often in recent times they appear to act in a quasi-judicial way. This is not a positive development for either consumers or the industry.”
Spot on. But who is the regulatory creep?
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Bob Donaldson | 30 Sep 2010 5:24 pm
Long overdue in my estimation. Best of luck but being a pessimist, I'll start a book now as you won't get far. You would make better progress negotiating with the Taliban
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PD Off | 30 Sep 2010 5:27 pm
Is he after an i pod for having the best complaint
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Michael Fallas | 30 Sep 2010 5:32 pm
A bit late isn't it.
What about a review of the FSA as well.
Also why don't the FSA staff pay towards the compensation schemes like the rest of us (out of their high salaries) as they have even more responsibility than we do especially after the banking crisis ?
The whole system is biased and nuts if you ask me and the nutters don't pay anything for their mistakes.
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Julian Stevens | 30 Sep 2010 5:34 pm
So 2% of the total FOS funding levy would appear to be the share which should be apportioned to the IFA sector. I don't know what the share presently apportioned to us is, but I suspect it to be very considerably greater than 2%.
Likewise, should not the same percentage be allocated to the IFA sector in respect of the total levies demanded by the FSA and by the FSCS? After all, complaints are the most fundamental indicator of the degree of risk posed to consumers and regulatory resources should surely be allocated in proportion to risk.
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Anonymous | 30 Sep 2010 5:53 pm
I had an endowment complaint that of course went to FOS as there is absolutely no cost implication for the complainant. Fearing the worst I instructed a firm of lawyers to present the case on my behalf. This entailed a bundle containing 80 items of evidence such as projections, factfinds with a 13 page covering letter pointing to each piece of evidence.
The adjudicators reply was....." as this case took place so long ago we base our judgement on what we call the balance of probablities" and upheld the complaint. In other words hard evidence was ignored and the judgement was based on personal opinion of just one individaul!!
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Evan Owen | 30 Sep 2010 8:47 pm
Sinclair says: "advisers should bear in mind that the impact will be greater for other parts of the industry as IFAs make up less than 2 per cent of claims."
Good grief, where has this man been hiding? Behind the potted plant in the corner of another parallel universe version of what people think AIFA is?
What effect would an award of £150,000 have on er... a bank? NONE
What effect would an award of £150,000 have on a sole trader, a retired one perhaps? BANKRUPTCY
The more I hear from AIFA the more I thank my lucky stars I am not one of the ones who make up the 'I' which is facing extinction.
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Anonymous | 30 Sep 2010 10:11 pm
like earlier writer we had an endowment complaint some 18 years later. We had several documents in file which any court of law would accept. But FOS adjudicator upheld complaint on issue that was not relevant. We all know FOS is above law and a sad future for UK as our reputation of excellent legal system is tarnished. MP's have become powerless to question FSA, FOS, FSCS
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Socrates | 1 Oct 2010 9:02 am
If my job title were 'Adjudicator', I would naturally assume my employer required me to adjudicate. Perhaps if FOS were to change the job title of its case handlers to 'Mediator', there would be a welcome return to the organisation's original purpose - mediation within the law.
The question is whether FOS senior management desires that outcome - or do they actually relish a quasi-judicial role?
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Pete Wildebeast | 1 Oct 2010 9:06 am
Why an increase to £150,000? Has the average sum assured increased by 50% in the last few years? No.
The FOS seem keen to ensure that everyone gets paid in a dispute - however fraudulent their disclosures are.
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