A total of 9,000 complaints to the Financial Ombudsman Service would have been time-barred in 2007/08 if a 15-year long stop had been in place.
After a Freedom of Information request by the IFA Defence Union, the FOS has revealed that of the 9,000 complaints that would have been time-barred, 7,000 relate to mortgage endowments. The FOS had a total of 123,000 complaints for the year.
The FSA’s retail distribution review interim report said 2,000 complaints would be time-barred each year under a 15-year long stop but the FOS says this figure excludes mortgage endowment complaints as they are expected to fall rapidly over the next few years.
The FOS says 10 per cent of whole-of-life complaints and 20 per cent of pension complaints – both between 200 and 300 cases a year – would be time-barred under a 15-year long stop. It adds that 99 per cent of its caseload on Serps involves advice given before 1992.
Defence Union chairman Evan Owen says: “To have unlimited liability for ever is ridiculous. We are told to destroy files after six years, so how can you defend yourself against cases if you have not got the records you need? In those cases, it is presumed that the IFA is at fault.”
He says the FOS should disclose how many complaints that would be time-barred relate to advice given by IFAs.
An FOS spokesman says: Lord Hunt’s recent review of the ombudsman service concluded the introduction of a 15-year long stop would be untenable in terms of treating customers fairly. This reflects the FSA’s and the ombudsman’s view of the law and its operation.”
Evolve Financial Planning director Jason Witcombe says: “Any information that helps to clarify where complaints come from and what products they relate to can only help to differentiate good advisers from bad.”