Adviser trade body Libertatem is looking to put together a “steering committee” of industry professionals to take their challenges over the increase in the Financial Ombudsman Service’s compensation limit to the FCA.
Libertatem says a meeting between itself and the FOS has been confirmed, and it is now seeking meetings with the Treasury and FCA in light of the decision to increase the maximum award the FOS can pay out from £150,000 to £350,000 from April.
The trade body says it wants to advise the regulator on the “true cost of these changes”.
In its response to the FCA’s consultation on the move, Libertatem argued that the FOS limit should be reduced to £25,000.
Libertatem director general Garry Heath says: “The regulator’s belief that the PI insurer will pick up the bill is, quite frankly, wrong. It is our understanding from a leading PI insurer in the UK market that they will only cover £160,000 of any FOS decision, with the adviser being expected to cover the excess and the rest of any amount payable.
“In the light of these issues it is almost beyond parody that the FCA has sought higher limits for the ailing FOS.”
Heath quotes one PI insurer as saying that the FOS “bend over backwards to find for the claimant”.
FOS statistics show only a third of claims go in favour of the consumer.
Heath argues that there is no right to appeal FOS decisions.
Firms can contest an initial decision from a FOS adjudicator before it is passed to an ombudsman ruling. They also are able to challenge decisions with FOS’ independent assessor, or launch a judicial review.