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Banking commission: FOS needs urgent reform on case handling fees

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The parliamentary commission on banking standards is calling on the Financial Ombudsman Service to incentivise banks to improve their complaint handling by urgently reforming case fees.

In its final report, published this week, the commission attacks banks’ “unacceptable” complaints handling processes, claiming they have contributed to a lack of trust in banks.

It says they do not take customers’ complaints seriously and calls for “significant improvement”.

The commission says if the FOS finds banks have handled an initial complaint well and dismisses it, the complaint fee should be waived as an incentive.

However, if the complaint was not handled appropriately and is upheld, banks should face a higher fee.

Facts & Figures Financial Planning managing director Simon Webster says: “It is a sensible idea in theory but practically it could be difficult to introduce. FOS could spend a lot of time deciding what is a legitimate well-handled complaint, which would push up costs.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Neil F Liversidge 19th June 2013 at 8:53 am

    Quote: The commission says if the FOS finds banks have handled an initial complaint well and dismisses it, the complaint fee should be waived as an incentive. However, if the complaint was not handled appropriately and is upheld, banks should face a higher fee. Unquote.

    This is in essence that I am on record as saying about all FOS case fees for over 10 years, along with an argument for a £50 commitment fee by the complainant, returnable if the complaint is upheld and/or the firm rejects it on valid grounds but with a poor explanation of its reasoning.

  2. Could you trust FOS to administer such a scheme when they rarely find a case to be frivolous and vexatious and even less often consider face to face meetings necessary to resolve cases.

    It would need independent assessment and even more expense.

    Scrap FOS and start again with accountability.

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