Treasury Economic Secretary Ed Balls has weighed into the debate on time bars, saying endowment providers have a duty to consider complaints regardless of the time-barring rules.
In a letter to Conservative MP Andrew Mitchell, Balls said the time-barring rules only apply to the ability of the Financial Ombudsman Service to examine the complaint and FSA rules require firms to consider complaints irrespective of time bars.
The letter said: “FSA rules impose a duty on firms to consider complaints and this duty is not affected by time-barring.”
Compliance expert Adam Samuel says Balls is right to draw this distinction due to the “disconnection” between rules laid out under Disp 1 and Disp 2.
Samuel says the FSA is well aware of the fact that time-bar provisions only apply to the FOS rather than firms but has chosen not to enforce some of the Disp rules.
He says under Newcob, some of these inconsistencies will be remedied – as it will allow firms to reject complaints without considering its merits – but he believes attention should instead be given to changes to the time-bar rules themselves.
In September, FOS chief ombudsman Walter Merricks warned of “the understandable sense of grievance” that the issue is likely to generate and a number of claim management companies are lining up to challenge the rules.
FSA spokesman Robin Gordon Walker says: “We require all firms to consider the way that they are treating customers whether or not time-bar rules have been enforced to ensure that the whole process is properly handled by the firm.”
FOS spokeswoman Emma Parker says: “We cannot look at cases if we determine a time bar applies but it makes good business sense for a firm to consider the complaints against it.”