View more on these topics

FCA cleared over decision not to intervene in FOS ruling

The FCA has been absolved by the Complaints Commissioner after allegations it failed to act on a poor decision from the Financial Ombudsman Service.

A complainant argued that the FOS and its independent assessor had mistreated their case, and argued to the FCA that it had failed in its oversight of the adjudicator.

The FCA rejected the complaint that it failed to deliver on its statutory duties.

The case then went to the Complaints Commissioner, who rules on whether the FCA has followed due process.

In a judgment released today, Complaints Commissioner Anthony Townsend says that the FCA should have given the complainant a fuller explanation of why it rejected their dispute.

Townsend says: “I have some sympathy with you, since the FCA’s decision letter is so brief that it gives no indication as to how the FCA reached its conclusion that it is not persuaded that the FCA is ‘failing to deliver on its statutory responsibilities’.”

However, Townsend did not uphold the complaint against the FCA.

He says: “I have to say that, in my view, you have supplied no convincing evidence that the FCA has failed in its responsibilities – particularly bearing in mind the FCA’s legitimate discretion in the exercise of its functions, and its duty to respect the FOS’s operational independence.

“Shortcomings in the FOS’s performance in a particular case or cases, even if established, do not equate to the kind of evidence of systemic failure which might require the FCA’s intervention, or support a conclusion that the FCA had failed in its duties. By ‘systemic failure’, I mean failure of a kind which might suggest not merely that there are occasional errors in the system, but a failure which might call into question the FOS’s ability to fulfil its functions, and therefore justify FCA intervention.

“You have alleged that the FOS has breached the requirements of procedural fairness, but – even if that were established – it does not follow that that is the fault of the FCA.”

Townsend added that the FCA should look at its processes to ensure FOS exercises its responsibilities properly.

“Given that the FCA does have responsibilities for the FOS, it would have been sensible to give some further explanation. For example, a description of how the FCA board exercises its role, and on the basis of what broad categories of data, how it responds to information alleging failure by the FOS, and what steps the FCA takes to identify whether the FOS is ‘capable’ of exercising its functions, might have provided you with some degree of reassurance.

“The fact that the FOS is operationally independent from the FCA does not mean that the FCA cannot, or should not, seek assurances if significant allegations about the FOS’s practices are made.”

Responding to the decision, the FCA says: “The FCA notes that the commissioner did not uphold this complaint but has made recommendations which we have accepted and we are currently considering the appropriate next steps”

Recommended

5

FOS defends independence of service complaints adjudicator

The Financial Ombudsman Service has defended the independence of the assessor it pays to monitor its service levels. Independent assessor Amerdeep Somal considers complaints from businesses and consumers when they feel the level of service FOS has provided has been unsatisfactory. The service is paid for from FOS’s budget. While she does not rule on […]

1

FCA to launch platform competition review

The FCA is launching a market study to investigate competition between platform providers. In its business plan released this morning, improving competition in the platform space was placed as one of the regulator’s priorities in the retail investment space. The study will consider both the direct to consumer and advised platform market, as the FCA […]

2

DB transfer shouldn’t be all-or-nothing

By Steve Webb, director of policy In my recent discussions with advisers, a hot topic has been the growing number of people interested in transferring their defined benefit pension rights into a defined contribution pension scheme. With many pension schemes offering eye-watering transfer values, this is likely to be an area of increasing interest. Yet […]

US election

Capital Market Notes, November 2016 David Lafferty, chief market strategist at Natixis Global Asset Management, looks at the impact on markets and portfolios since the somewhat surprising outcome of the US election. Click here

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Could this be reglatory dogma in practice ? (just another example)

    The reglatory system (and indeed the FCA) must be seen and believed as infallible, to prove this wrong, would end up with the whole system falling to its death amongst the shattered ruins of Canary Wharf.

    Oh that would be a film worth seeing first hand !

  2. The complaints commissioner is the pet dog of the FCA, it growled at everyone and licks the hand of the FCA.
    Don’t expect anything else this is the only organization that has complete impunity. Sort of a legal Mafia.

  3. In fact, no-one regulates the FOS. Not the Courts, case law, regulator or Government – it is quite worrying really. Take a simple example – the award of interest on compensation at 8%pa as per the Law. However, the courts have been applying far lower rates for years – so complainants are improperly allowed to profit Two rates could apply – borrowers and investors, quite simple but the FOS won’t hear of it.

  4. Render unto Caesar………….

Leave a comment