Aifa calls role of FOS into question
Share
Aifa is lobbying for a complete review of the role and accountability of the Financial Ombudsman Service.
The FSA published a consultation paper on complaint handling last week that aims to drive up industry standards. It proposes raising the limit on FOS awards from £100,000 to £150,000.
Aifa director Robert Sinclair says that while the increase will hurt other parts of the financial services industry more than intermediaries, who are responsible for less than 2 per cent of complaints to the ombudsman, the paper calls into question the role of the FOS.
He says: “This consultation does raise questions about the operation of the ombudsman. With the current changes to the regulatory architecture, there should also be a review of the FOS’s 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, it appears to act in a quasijudicial way. This is not positive either for consumers or the industry.”
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
Readers' comments (3)
Evan Owen | 8 Oct 2010 7:15 am
More "Issues of fairness" Hector?
The legal profession has an Ombudsman award limit of £30,000 when in practice, yet IFAs in retirement face awards of £150,000.
Is that "fair and reasonable", I would contend that it isn't.
The FSCS limit is far lower.
This compensation machine will become your prison, and theirs.
Unsuitable or offensive? Report this comment
Evan Owen | 8 Oct 2010 7:15 am
More "Issues of fairness" Hector?
The legal profession has an Ombudsman award limit of £30,000 when in practice, yet IFAs in retirement face awards of £150,000.
Is that "fair and reasonable", I would contend that it isn't.
The FSCS limit is far lower.
This compensation machine will become your prison, and theirs.
Unsuitable or offensive? Report this comment
Phil Castle | 8 Oct 2010 8:46 am
Well said even. The reason why the symbol fort justice is a scales is because it is supposed to be balanced.
A small consuemr challenging a large instituion needs and ADR system like the FOS, but a small consumer dealing with a single firm adviser needs true alterntaive dispute resolution, not a quasi judicial system which ignores evidence.
The only client I have involved with FOS is making a claim about a Bank, NOT me and the FOS have found it too hard to come to a decision or resolve the dispute, despite being provided with recordings of the telephone conversations with the bank which are being disputed. Is that because they find it difficult to listen to evidence when they are so used to making their decisions based on their own preheld conceptions and opinions?
Unsuitable or offensive? Report this comment