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FOS: £50 complaint fee ‘unaffordable’ for consumers

The Financial Ombudsman Service has rejected the suggestion that it should charge consumers a complaint fee of £50 to £100, claiming this would prevent those suffering hardship from using its service.

In its latest newsletter this week, the FOS says it hears from many businesses that it should charge consumers “a nominal fee” of £50 to £100 in order to deter spurious complaints.

The FOS says: “We understand the strength of feeling that exists about this issue – particularly among smaller businesses, who might be worried about the prospect of being charged a case fee.

“But Parliament decided that a free ombudsman service underpins confidence in financial services.

“And like many other public services, the fact that our service is ‘free at the point of use’ recognises that some of the people most in need of help might not be in a position to pay for it. So our view on charging customers is very unlikely to change.”

The FOS says that for someone missing or making only minimum payments on high-interest debt, a £50 fee is “clearly far from nominal”, and is higher than many standard charges applied by financial businesses.

It says: “So the result of charging a £50 fee could be that people wanting to question small amounts of money see no economic sense in taking things further.

“And other people couldn’t afford to ask for our help – because they don’t have £50 to cover the basics of everyday life, let alone to cover a ‘complaining fee’. If they had £50 to spare, they might not have had a problem in the first place.”


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There are 67 comments at the moment, we would love to hear your opinion too.

  1. But its not free is it? Free for consumers to use, but not free to run!

    Certain types of complainant may not be able to afford to pay a charge (debt-related insurances, etc.) but its hard to see that an investment or pension consumer cannot muster £50 to argue their case. Still, one size fits all hey?

  2. can they afford to do the lottery, buy cigarettes, have sky TV, tax a car?
    I only do one of those things and even that one I would rather walk to wok and often do.
    If you understand the strength of feeling, don’t just ignore us, suggest an alternative, I suggested 50, but even 15 would put off many spurious complains. don’t forget the consumer must complain to the firm FIRST, the complaint can be upheld by the firm without ever needing the FOS.

  3. On what basis is the FOS assuming that that anyone wishing to complain about having been mis-sold a financial product is also burdened with payments on high-interest debt? How many people who’ve had to resort to high interest borrowing are likely to have invested money in a financial product that’s performed contrary to expectations or gone kaput? Evidently the FOS is completely oblivious to the rampant claim-for-gain culture so enthusiastically promoted by CMC’s.

  4. Hmmm.. public services like the NHS and Education are free at point of use because we want healthy and educated people… making it “free” to complain is decidely unhelpful and plainly naive. The cost of handling a complaint for an adviser or advice firm is high in time cost, let alone emotionally draining, so I would welcome anything that is more likely to result in genunine complaints rather than those that simply decide to “try it on” because money is involved. If the complainant genuinely cannot afford £50 then one has to wonder what sort of financial advice they have had…

  5. I understand where FOS are coming from but they must be able to find a solution to this issue, if they really want to. Maybe complainants could provide debit card details on the understanding that, should the complaint be deemed clearly spurious or drastically inaccurate, that the “Complainant” is then liable to a fee. That, at least, may put off those who seek to defraud whilst providing a free service to those with reasonable cause for concern.

    Anything less risks accusations that FOS is self-serving, particularly when they seem to be under the misapprehension that this is a “Free Public Service” when it is largely funded by industry case fees. They MUST see enough bare-faced fraud to understand why this is a serious problem and to grasp why, in many cases, the case fee equates to the victim funding the crime!

  6. Ok. Let it be free at the point of use but also include the caveat that should the complaint not be upheld then there will be an administration charge of £50.00 to cover the use of the service (even if that was to be paid to FOS).
    There has to be some sort of check to make any complainant think that if the complaint is not genuine there is likely to be a cost involved.
    It would also mean that the “ambulance chasers” would have to include this in their process which currently is completely lacking and even encourages spurious complaints.

  7. Saying that every claimant smokes, drinks and claims benefits (apart from being incredibly small-minded) is a bit like saying that every adviser who receives a complaint will handle it properly and that there are no poor advisers in the industry. It is funny that the word fraud is being used to describe the complaints when this yet another set of advisers are being jailed for just such an offence.

    The problem isn’t that the FOS is free but how it is funded and whether the splits between sectors is equitable.

  8. Charging CMCs at least £50.00 per complaint would be a good start. If the complaint were to be successful they could add the £50.00 to their success fee; if not they could afford to take the hit. Surely a large proportion of spurious complaints are submitted by CMCs. They should, and could easily afford to, bear some of the cost

  9. Like so many of the articles relating to complaints and industry ill feeling this piece does not seem to relate to the readers of MM – many commentators are quick to defend the IFA role and many are quicker to point out that they have never, or at least had very few complaints, and some are even quicker to point out that the IFA sector make up just a tiny proportion of complaints made.

    With this in mind surely it is is a good thing to have a ‘free’ service for complaints, without it we may see a decrease in those that are complaining against payday lenders and banks and building societies and the like.

  10. A compromise is that assessment by an adjudicator is free at point of use, but referral to an Ombudsman is chargeable.

    While spurious complaints are a growing issue, it is exacerbated by these complaints going through multiple layers of assessment at a completely unnecessary cost to the industry. Some of the complaints published by the Ombudsman have absolutely no substance, but even when dismissed by both the firm and the adjudicator the complainant is still able to refer this to a highly-paid Ombudsman to assess, which the firm will need to dedicate the resource to defend.

    One free assessment is enough. Two free assessments are an unnecessary cost. By this point the complaint will already have been rejected twice (by the firm and adjudicator). If your complaint has been rejected twice, it is not unreasonable to expect you to start paying if you want to pursue it any further.

  11. Stuart Duncan and others make a point about hom much lying and fraud there is from the public when making their claims and why this seems to be tolerated by the FOS. I was surprised to find that when a friend faced a landlord’s claim for non-existent damages in which the landlord submitted demonstrably fake cheque stubs (no perforations on them because paper had been placed over the unpresented cheque when photocopying) and faked invoices for expenses (which the dodgy traders agreed they had faked for him when threatened with being reported to the VAT man), it was discovered that a rule of the small claims court was that fraudulent evidence would neither be disregarded, nor would the fraudster be subsequently prosecuted.

    So if you think that the likes of the FOS represents anything approaching justice, think again.

  12. Fortunately I don’t have experience of this, not having had a complaint. I don’t want to appear holier than thou because a vexatious claim could arrive at any time. I am particularly conscious of the PPI scandal. I was not involved in this apart from being given unwanted PPI by one of my credit cards which I promptly cancelled. The real scandal is that so many people have decided this was not appropriate to them or could not be bothered to check their bank statements and have received compensation. A lot have received compensation when they never had the product! There may be faults on the part of some advisers but the general public are very quick to jump on a bandwagon. As my builder said to me ” there are a lot of crooked builders but there are also a lot of crooks taking advantage of builders”. It does seem that nobody wants to take responsibility for their own actions these days and when a problem arises it is somebody else’s fault. So a commitment fee payable on lodging a claim may be appropriate.

  13. Obvious solution: Complaints re Wonga loans (defined as any loan with interest over 50% APR) are free of charge. Complaints re everything else are £50 each. Too simple?

    Anyone who has a pension or qualified for a mortgage can scrape together £50.

  14. @ Bert Poppins
    “It is funny that the word fraud is being used to describe the complaints ……”

    Not funny at all. When someone fabricates evidence to deprive someone of funds, then that is a criminal offence (fraud by misrepresentation) and should be treated as such. I am not claiming that all complaints are fraudulent at all and many are not, but you should not defend those that are. A fraud perpetrated through FOS is still a fraud.

  15. If you can identify those who should benefit from free prescriptions then I think there might be a method for identifying those who cannot afford a complaint fee? Alternatively, similar to how free pension guidance is being funded, perhaps those who benefit most should pay an upfront complaint fee i.e. the firms that permanently badger the public to make complaints?

  16. I have a solution (I think) which is broadly very similar to some of the other proposals already submitted.

    If it’s an individual making the complaint then fair enough, don’t charge them.

    If it’s one of the bottom-feeding so-called ‘claims management’ companies out there making the complaint of behalf of a ‘client’ then charge them, say £500 per claim which would be non-refundable if the claim is rejected. This must be paid on submission of the complaint to the FOS by said claims management company.

    I feel that this way would reduce the number of spurious claims submitted by these lot on the off-chance that they might get a result.

    I don’t know about anyone else, but I get a call from a claim company most days (and usually a text on a Sunday) trying to get me to complain about something, and quite frankly I’ve got to the stage now where I’m becoming rather impolite when telling them I’m not interested for the umpteenth time.

    Anyone with an ounce of intelligence can make a claim without their ‘help’, and as an IFA I’d happily assist (and have done this year) a client with making a claim against mis-selling if this was the right course of action.

    Oh, and I never charged anything either. I did, however invest the £6K compensation he got back and took a standard fee on that when I did so.

  17. Public service? Are they admitting that they are a government department and should therefore be funded by the tax payer?

  18. Alternatively – the FOS case fee should be set at a level that encourages Financial Businesses to deal with complaints properly but payable only on complaints found in favour of the consumer. A move to a system where the first 10 upheld complaints are free (to allow for some of FOS more questionable decision), the next 90 are chargeable at £1,000 an upheld case, the next 900 at £10,000 a case and any company with more than 1000 upheld cases is charged £50,000 a case thereafter. This would focus the minds of the management of larger organisations (and also their shareholders) into substantial improvements in the currently unacceptably poor complaint handling whilst benefitting those firms with no upheld complaints.

    I would add, that whilst I categorically disagree agree with consumers being asked to pay to raise complaints I would have no issue with CMC’s being asked to pay a fee for each case, refundable when the case is upheld. If this reduces spurious complaints, it increases resources for those customers who have been poorly treated by firms within Financial Services. Anything that drives up standards across the board can only be seen as a good thing.

  19. They want to deter people from making ‘spurious’ complaints. Who decides what’s ‘spurious’ does that just mean complaints they don’t like? This would be the thin end of the wedge and the beginning transforming the FOS into as pointless a complaints system as that at the FCA. Perhaps that’s the agenda.

  20. FOS cannot expect any degree of respect whilst unfair determinations continue.

    Additionally, there has to be an independent appeals procedure because the FOS reviewing the FOS is a joke.

    Further, without the finality of a longstop to ward off stale claims we, the unwilling participants of the service must remain fully liable for any latent complaint whether fair or fraudulent.

    The FOS has always made noises about wanting to reduce claims yet its antics show that like most quango’s it is self-serving and like most quango’s empire-building is the name of the game.

  21. what a load of cods wallop, pehaps if they had to deal with spurious claims out of their own pocket/annual bonus they may have a different perspective.

    £50 quid ! its 6 packets of fags!

  22. @CMC Manager – A good and workable suggestion, especially if balance with Mr Hudson about adjudications being free, but NOT Ombudsman.

  23. E L Wisty (an only twin) 9th December 2014 at 3:46 pm

    A client recently took my firm to the FOS, claiming financial loss caused poor advice – on the face of it, a legitimate complaint.

    Fortunately, I was able to evidence that the client had, in fact, made money (and had significantly outperformed a comparable benchmark), at a risk level that was comparable to their ATR and capacity for loss. Prior to the client referring the matter to the FOS, I had refuted the original complaint for the above reasons.

    However, notwithstanding the clear absence of any loss, the FOS would not treat the matter as a vexatious complaint. Following the investigation, the FOS dismissed the complaint, although the client then tried to bring another similar complaint.

    I am supportive of the need for an independent ombudsman, however, such cases demonstrate the need for a client charge.

  24. Now this does finally prove that the FOS doesn’t live in the real world. Refer to Phil Castle’s post. Now look at the football terraces and work out attendance cost. Look round your local eateries on a Saturday. I’ve seen people spend £5 in MacDonalds and that takes some doing!

    The public can’t afford £50. This is absolute balderdash. What are the products they are complaining about, how much did they cost and what was the loss?

  25. @Peter Lihou

    FOS already has the ability to class a complaint as “spurious and vexatious” i..e. nonsensical or fabricated, but they rarely use it and, even then, the only outcome is that no case fee is charged to the victim (us) but we have still had to spend many man-hours answering the complaint and disproving the allegations. The “Complainant” walks away scot-free as things stand, even when his/her allegations are completely false and therefore fraudulent

    An example is one where a list of about 10 allegations on a mortgage claim were all proved to be false but we still had to pay a case fee. So no; it is not whether we like the complaint or not. It is subjective not objective and our attitude is positive, not negative, as it is essential to discourage false claims in order to facilitate fair claims. This is where FOS is failing the industry but also failing consumers with legitimate grievances.

  26. @Phil Castle

    The two stage (three stage for PPI) system always strikes me as an unnecessary one. For PPI cases once an adjudication is made, if either party objects, the case goes to a second adjudicator, who appears to use the same tick sheet to rubber stamp the first adjudication irrespective of additional points that either party raises. Either party can then object and the case goes to an ombudsman who in most (but not all) cases rubberstamps that of the adjudicator.

    Perhaps a combination of my suggestion, Mick Hudson’s and Alan Lakey’s would work best. i.e higher case fees for lost cases, free to consumers (but not paid representatives) with a single stage process at FOS where qualified staff reach a decision on all cases.

    If either party is unhappy with the outcome it can be escalated to a small claims / tribunal level body which makes a decision that follows basic legal principles.

  27. The fact that complaints may be spurious or not makes little difference, it is a simple

    We now live in a society that complaining is the norm ! expertly fuelled by CMC’s who will move from one area to another cleaning up along the way, it makes little odds to them whether its PPI, pension, savings, or I slipped on some ice blah blah blah !!!

    For us in the financial services industry its simple, more complaints = more staff, more staff = more money, either way we again pay !!

    From a CMC point of view “you can only phish for so long before you have to throw a stick of dynamite in to get the results you want”

    On a final note FOS is NOT “FREE” !!! MAS is not “FREE”, FSCS is not “FREE” they are paid for by the FS industry and more importantly its clients !!! if anything it is sponsored by good to pay for the bad, incompetent or feckless !!

    Personally I don’t think people should be charged for complaining, its the whole complaints culture which is wrong and it needs to be reviewed.

  28. @ DH

    You have my vote. We have imported the whinge culture from the USA. Fuelled by lawyers and now the CMC. For years I have been advocating that Aug-12th be changed from shooting grouse to shooting lawyers.

    It’s always someone else’s fault. The State is now Nanny McPhee and Mary Poppins rolled into one. Incessantly wiping noses and changing nappies – for 16 year olds – as it were!

  29. @Stuart Duncan

    That is the price of being accountable Stuart and it’s your job to spend many hours investigating complaints!
    If the FS industry was better regulated you might not have so many to investigate but as things stand consumers need recourse. It’s indefensible for any organisation to charge people, most of whom have already suffered losses or poor service, for the privalidge of wasting more of their time to seek a just outcome. People don’t complain for the fun of it or because they’ve nothing better to do with their time, so no, they shouldn’t charge anything but should lobby to ensure the industry they are dealing has less to complain about.

  30. @Peter Lihou, your comment seems at odds with your one of 6th May 2014.

  31. @Pete Lihou

    Not sure which world you inhabit but people DO complain for “the fun of it”. I`m not for one minute suggesting that every complaint is like this, but many people do “try it on” comfortable in the knowledge that there are absolutely no consequences if it fails.Just like many people inflate insurance claims – they believe these things are victimless and why not give it a go. Of course we all know that the end user pays the consequences in the final analysis, as these “costs” have to be passed on.

  32. @Peter Lihou
    My job is to obtain optimum mortgage and protection arrangements for my clients and, as long as I do that, I should not have to worry about complaints. When I make a rare mistake that disadvantages a client, I compensate them immediately and without argument.

    If, as seems apparent, you are suggesting that it is somehow acceptable that I have to spend time dealing with attempted fraud, then you do indeed inhabit another planet.

    Steve Barrett is wrong to say that people complain for the fun of it. His subsequent comments are correct though. They are trying to cheat money out of their victims and you are letting yourself down if you support that kind of behaviour.

  33. Steve Barrett, has a very good point

    Its called obtaining monies by deception !!

    Now if the FOS started to really dig within the flood of claims from CMC’s and or their clients I don’t think it would be long before you started to get some major inconsistences.

    To be fair FOS is to easy, if they started challenge and ask those searching questions in the evidence presented ( you don’t need me to spell out what may or may not be evidenced/disclosed on the claim forms) the FOS can then take the matter further, even legal proceedings ?

    You cant tell me every PPI, etc etc etc etc was miss-sold !!! that’s just not true ?

  34. You’re not suggesting every complaint is made for the fun of it (big of you) so roughly what proportion – 90%, 50% 1%? I would certainly conceed that very occassionally a nutter complains ‘for the fun of it’ but if we are arguing intelligently, we both know that by far the majority of complaints are from people who feel agrieved and if you think otherwise I pity you in the world you inhabit.

  35. @Pete Lihou
    Unfortunately, you are not arguing intelligently as you clearly have little or no knowledge of reality when it comes to FOS complaints.

    Of seven complaints to our four-man firm in recent years, all but one were rejected because they were simply untrue e.g. an ex-client claiming that he had been sold “Compulsory” LUMP SUM PPI when he had voluntarily taken out monthly premium sickness & redundancy cover on his mortgage at a time when he had no employer sick pay and his industry was under pressure in terms of job cuts. The CMC who presented the complaint even claimed that the product was unsuitable because he was employed. By the way, the “Lump Sum” was definitely not a mistake on his part; it was a deliberate lie.

    I have spoken to one small firm who have received dozens of PPI complaints when they have never sold a PPI policy and yet some of them have still gone to FOS. I also attended a meeting with several MPs who have concerns about the prevalence of fabricated complaints and the random texting and cold-calling tactics of the CMCs who try and persuade consumer to make false complaints.

    It is a national disgrace and you are just plain wrong.

    I make that over 85% and one aspect of the seventh claim was upheld on

  36. @ Peter Lihou. Unfortunatley, I must disagree as Im in the same world as DH, the majority of claims i’ve dealt with are from people who are generally all out to get some thing for nothing and have no recollection of the actual facts or events that took place upon entering into the transaction.

    They all feel very agrieved and want full reimbursment & costs + interest @ 8% for their distorted and manufactured losses. All based on their current circumstances having completly forgotton the actual facts and their circumstances and position at the time they entered into the transaction. In my world that accounts for aprox 90% of the claims ive dealt with.

    So who needs the pity for not having a full grasp of reality????

  37. @Pete L
    The incessant cold calling/ texting/ phoning by CMC/ PPI claims companies is testament to the fact that many claims are initiated not by the person apparently wronged but by the companies with pre scripted calls/ claims forms/ letters of complaint which have so little information about the specific complaint rather the fact the decision made was not consistent with ATR etc.
    If you have never taken such a call/ text then I am amazed and if you are an industry practitioner who has never had a complaint raised against you by such companies even more so.
    They consume valuable time away from dealing with real clients and some form of checks and balance must be introduced soon.
    Please remember that every individual has an absolute right to complain directly to the company concerned for free without using a CMC and if they have been actually wronged then there is nothing stopping them from doing so.

  38. @Pete Lihou – Thank you for your response. I had no wish whatsoever to cause offence. On reflection my initial sentence was badly chosen for which I apologise. I have worked in the Financial Services sector for over 40 years and have personal experience of dealing with vexatious claims of various hues in that time, so am aware that this type of behaviour has gone on over an extended period. I believe it has been “encouraged” in recent years by the less scrupulous CMCs, and in accord with other posters on here also believe that many PPI claims were a “try on”. It was not always mis-sold. I have personally seen attempts to claim mis-selling when the claimant has previously been ill from work, and made a successful claim over many months to cover loan repayments etc.

    I absolutely agree victims of genuine miss-selling deserve to be fully compensated, that is a given as far as I`m concerned.

    I consider myself to be an honest individual and would never ever contemplate making any sort of claim for compensation which was not genuine. I`m sure most if not all posters on here are of a like mind. Regrettably there are in this world in which we now live, individuals with no scruples whatsoever who would not hesitate to “try it on”.

    Regards, Steve Barrett

  39. @Peter L – I am very lucky, the only dealings I have had with the FOS have been on the clients side of arguments usually with the stockbroking arm of banks. But one of the only reasons my business is post pension reviw so I learnt from others problems and chose NOT to sit G60 or obtain occupational pension scheme transfers and secondly, whilst we are authorised to advise on mortgages, it has always been a very small part of our business and is only for existing clients and their families, so we don’t get time wasters and tyre kickers. We don’t advertise, don’t have a high street presence and are hard to find in our dungeon basement unless you know where to look.
    So there but for the grace of god go I with regard y it on complaints. The only one we did have was a referral from a solicitor where the complaint then came via another solicitor and we defended it using the recording (mP3 file) of all the client contacts. Most firms haven’t started recording meetings yet, but once this increases, I suspect the shoe will be on the other foot with some of the bad CMCs and hopefully those remaining will all be like the poster on here CMC Manager who seems to have the right idea. Pity he or she doesn’t;t post under their own name as I for one would be happy to point true complainents in their direction if they need more help than the FOS can give.

  40. @Pete Lihou
    Unfortunately, you are not arguing intelligently as you clearly have little or no knowledge of reality when it comes to FOS complaints.

    Of seven complaints to our four-man firm in recent years, 6 were fraudulent and their allegations disproved.

    I make that over 85% and just one aspect of the seventh claim was upheld on the basis that we couldn’t prove that the complainant was lying even though we knew that she was.

    I have spoken to one small firm who have received dozens of PPI complaints when they have never sold a PPI policy and yet some of them have still gone to FOS. I also attended a meeting with several MPs who have concerns about the prevalence of fabricated complaints and the random texting and cold-calling tactics of the CMCs who try and persuade consumer to make false complaints.

    It is a national disgrace and you are just plain wrong.

  41. @ Peter Lihou. Unfortunatley, I must disagree as Im in the same world as DH, the majority of claims i’ve dealt with are from people who are generally all out to get some thing for nothing and have no recollection of the actual facts or events that took place upon entering into the transaction.

    They all feel very agrieved and want full reimbursment & costs + interest @ 8% for their distorted and manufactured losses. All based on their current circumstances having completly forgotton the actual facts and their circumstances and position at the time they entered into the transaction. In my world that accounts for aprox 90% of the claims ive dealt with.

    So who needs the pity for not having a full grasp of reality????

  42. Let me explain that I’m a consumer here on what is supposed to be a professionals forum so my apologies if my knowledge is lacking.

    But I follow this and other dialogues where professionals are commenting because the financial services industry has cost me a large chunk of money that I hoped to rely upon in retirement and I’m trying to avoid that happening again. I have very little experience of the FOS but it seems to me the body of arguments you are all making against me relates to the work your individual firms encounter. This article is about the FOS charging consumers like me £50 if I have the audacity to complain about an industry that has lost me many thousands. Parliament reached the following conclusion.

    “But Parliament decided that a free ombudsman service underpins confidence in financial services.

    “And like many other public services, the fact that our service is ‘free at the point of use’ recognises that some of the people most in need of help might not be in a position to pay for it. So our view on charging customers is very unlikely to change.”

    It seems to me the very essence of an ombudsman service is that it should deal with complaints. Whilst I agree it is wasteful for that service to spend time on fraudulant claims, it would be wrong to charge everyone for the behaviour of some (I’m still not clear what percentage of claims or time spent in the FOS relates to fraudulant claims).

    The correct response to fraud is criminal prosecution. The correct response to honest members of the public who don’t understand the technicalities and buzz words of the financial services industry but who have lost money and feel ripped off is not to charge them, it is to investigate the complaints efficiently and with sensitivity.

  43. @Peter Lihou

    I hear what you are saying and agree completely that those with genuine complaints shouldn’t face any unnecessary bars to making that complaint and receiving redress. However, the point that myself and other industry professionals would like to make is that the process of making a complaint has become, almost, too easy and a win win situation for those willing to take a punt. The regulator should also try to protect those within the industry.

    I shall give you an example of the kind of complaints i personally have experience of –

    1. Only yesterday a guy contacted our firm to enquire as to whether his mortgage was legal. We have never dealt with him but he wanted my professional opinion as to whether Lloyds Banking Group had voided his mortgage by moving it from C&G to TSB. In his opinion he had never signed a contract with TSB and therefore had grounds not to make any more mortgage payments.

    2. During my time working within the bancassurance sector i opened a savings account for a woman aged 65, she was complaining that the bank had written to her to say that her PPI policy was being cancelled as she had reached the maximum age. She wanted to continue with the policy as she was worried about maintaining payments on her borrowing. What is the problem? She was depositing cheques that she had received through claiming PPI had been missold to her.

    As other commentators have mentioned the financial services industry is seen as fair game when it comes to making a complaint all we are asking for is a level playing field where fradulant complainers can not just walk away without having to pay.

  44. @Nick Wardle

    These are indeed good examples Nick because they demonstrate the chasm between those in the industry and ordinary consumers like me. You (quite rightly) haven’t gone into detail and I’ve no doubt that you can explain to me precisely why these two claims are inappropriate or even fraudulant but allow me to say what the ordinary man in the street would think.

    1. There are so many reports of mis-selling, bad practice and unprofessionalism many consumers might think there had been one more cock up and maybe this time they could benefit from it. If you, or any of your colleagues in the industry discovered you had a perfectly legal opportunity to save tens or perhaps hundreds of thousands of pounds, would you not explore it? You may have the expertise to know he had no case, but you can hardy blame him for asking. As for the inconvenience and cost you suffered, presumably you just told him ‘no’ and closed the call.

    2. A woman of 65 – I’m not going to be sexist or ageist but there are many in our society who are confused by this industry. I have a pretty good degree and have held senior management roles but sometimes I glaze over when being advised on financial matters that the advisor clearly thinks are very basic and simple. I can well understand the disconnect in this woman’s thinking and in my mind the only thing she’s guilty of is ignorance.

    This last sentence sums it up really, just like this whole business of providing ‘advice’ or ‘guidance’ or whatever they label it, for those with newly liberated pension funds, consumers are often terribly confused by this industry and genuinely new help. They won’t get it from this cheap automated system the Chancellor wants. If you have a business that makes money by giving advice, and you feel it’s too costly to provide simply a ‘no’ to people as in your examples, then you and those who share your view can charge them or decline their business.

    If you wish to charge £50 or however much you feel justified, that’s your business, but it isn’t the same at all as the FOS charging and the examples you have given demonstrate precisely why such a charge would be wrong.

  45. @Pete Lihou to respond to your points…………………..

    1. I would add to my first example that the guy simply didn’t want to pay his mortgage anymore and felt he had come up with a way not too. 99% of people would assume that when they take borrowing that they have to repay, in fact quite a lot of people who borrow (in my experience) see it as their responsibility to repay the borrowing.

    You state that “There are so many reports of mis-selling, bad practice and unprofessionalism many consumers might think there had been one more cock up and maybe this time they could benefit from it.” I think this sums up the problem that a lot of professionals have with the complaints culture in this country. Trying to find an opportunity to benefit from the situation when nothing has actually been miss-sold or cocked up. Contrary to being a victimless crime the ‘taking a punt and getting come compo paid out’ results in the banks having to fund it and therefore trying to recover these costs through higher charges to their remaining customers.

    2. “…………….but sometimes I glaze over when being advised on financial matters that the advisor clearly thinks are very basic and simple.” Again, this is an issue of concern for advisers. We have very complex financial products to discuss and recommend to clients and it is important to us that our clients understand what they are doing. Equally i can understand we you would “glaze” over during these dicussions. The problem is, as in the example i mentioned, that when it comes to making a claim quite a lot of what has been stated to clients is conveniently forgotten. As an industry how are we meant to approach this issue? You glaze over when we discuss the complexities of a product yet hang us out to dry when we don’t go into enough detail.

    As i mentioned before maybe some combination of charging claims companies and allowing individuals to complain for free is the best solution. I certainly wouldn’t want to stand in the way of a genuine complaint.

  46. @Nick Wardle

    Capitalism is inherently a selfish form of society and people see countless examples of politicians and bankers abusing their positions for personal gain. Can you honestly say that you would personally decline legally making a milliion pounds from the mistake made by a bank because you are concerned about the impact on fees that others will pay?

  47. The problem is that FOS do not report fraudulent claims, so they will continue to occur unless something is done by what is a quasi-governmental body. A few criminal convictions would have far more effect than a £50 complaint charge.

    Because I am in a large network, I get no free cases at all, so every fraudulent claim has the potential to cost me £550. That makes me a victim of crime and yet I have no recourse. I become even more of a victim if I have to pay compensation on a false claim, as has happened to many advisers.

  48. @Pete Lihou
    Only if I had lost a million pounds and I wouldn’t lie to obtain it because I am not a criminal.

    We get claims from people who have had no financial loss, including a mortgage claim where the clients had an excellent product and the CMC couldn’t quantify a loss because there wasn’t one. They therefore demanded that we calculate it, with interest, including a figure for pain and suffering!

    It would be laughable if it wasn’t so painful in terms of personal distress to the victim. Please understand that this is happening, Pete, and it is indefensible.

  49. @Pete Lihou

    Equally would you complain if the people impacted by that £1m mistake of the banks started suggesting that something should be in place to prevent it happening again.

    The bottom line is that the FOS is not a free service, it is funded by the financial services industry. We therefore have an interest in how it is accessed and our money spent.

    As i have said more than once, i have no issue with genuine complaints receiving fair compensation but as a financial services professional i do have issue with the industry being seen as fair game for an “it’s not my fault” culture of blame and claim.

  50. @Peter Lihou – You say ‘Can you honestly say that you would personally decline legally making a milliion pounds from the mistake made by a bank ‘Well the answer for me is provided there mistake had not already cost ME money, then no I would not use a loophole to deprive them of 1 million pounds. Its called honesty and integrity.
    I understand from your posting you are NOT an adviser. You seem to have posted on the MM website an awful lot over he years, so perhaps youd be kind enough to tell us all what your profession was/is and what firm you work/worked for?

  51. @Pete Lihou

    ‘legally making a milliion pounds’ – i think that says it all……..

  52. I have looked through these many posts and am constantly surprised. Some of you have spent time and effort interacting with a member of the public. That of course is fine. But what is not fine is that you have done it for free!

  53. Yes ‘legally’ and no I have not said that anyone should lie or mislead. I can’t quote you examples of wrong doers or question your exmples but I’m willing to bet the majority of claims are from people who genuinely have suffered or don’t understand their situation. I do think that many people, perhaps less wealthy than some of you(!), would take a million pounds gain if it was legal and above board to do so. They would put their own families first and the notion of ‘victimless crime’ as you put it is something they would ridicule when they see the salaries and bonuses of many at the top of these institutions.

    Having said this, I was encouraged (by the FCA) to make a claim against my IFA over the EEA Life Settlements affair and I declined to do so because I do not think he was at fault, the FCA themselves caused the run on redemptions. I don’t subscribe to the idea that people should take advantage of the opportunity to exploit such situations but understand why they might if it is entirely legal to do so.

    I’m not sure why you need to know my background Phil as I’m simply here as a consumer who is trying to keep abreast of what’s going on so that I don’t lose more of my money. But as you wish to know, I worked for most of my career in the ERP software industry for a firm called GEAC, formerly JBA. Rather than give you my entire CV, you can see my background on Linkedin here: I have nothing to hide.

    I sympathise with you all over the fact that the FOS is funded by you. I don’t believe it should be. Ombudsman services and regulators should be funded by central government in my view instead of being pseudo privatised institutions. However, given that we are where we are, it would be a mistake to further distance them from the public they are supposed to protect by levying a charge.

  54. And where shall I send my bill Harry? 🙂

    The link I enclosed probably didn’t work so if you do want to verify that I have never worked in or had any professional relationship with the financial services industry other than as a non-expert investor, here it is again!

  55. @Peter thank you for that.

  56. @Peter – Found you on linkedin – If you get to the opposite end of the country (Kent) were about 3 miles from the North Foreland Lighthouse, call in fr a face to face chat and we can discuss why small IFAs are making comments like this. It is highly likely having looked at your CV I have earnt less in my lifetime than you have so far, BUT I have ahd all my legal rights removed without consultation and by a slight of hand by a set of rules drafted in about 2000.
    Like many advisers, whether IFAs or restricted, I do my best for my clients and am passionate about what I do, but it does seem that the establishment is out to restrict freedom of Independent thought and that is why we have to speak up now or it will be a slippery slope. Up until about 4 years ago, instead of removing the longstop which ahs been doen to just the FS sector, Jack Straw;s ministry of injustice was discussing REDUCING the Longstop from 15 years to 10 years, which would then match NHBC building guarantees and from personal experience, you need nearly 9 years to sort out serious potentially life threatening and CRIMINAL )corporate manslaughter) issues, so a 15 year longstop is needed by both parties, not 10 years or infinity. Say what you like about the house of lords, but a 15 year longstop was thought through and reasoned, discussed ad debated, but there is NO record of the debate over its removal at either house, nor at the FSA in its minutes, an executive decision was made and not documented and we still don’t have an answer as to why.
    I have just seen APFAs very well reasoned argument for respecting the 15 year longstop in FS and IF the FCA decide to ignore it, then on their head be it.
    As I say Peter, there are two sides to every argument. So far I have only been in the middle, but I would rather the battle is fought before I am actually directly involved and at 49 , with another 20 or 30 years work ahead of me, I will make sure I do it now, rather than have to defend myself from false accusations when I am in my 80s.

  57. Just as an example, over the last 5 years, between a quarter and a third of FOS mortgage complaints were upheld and that does not include the complaints that were rejected prior to reaching FOS.

    So, statistically, the overwhelming majority of complaints in that sector do not have merit. If you drill down further into the statistics, the complaint uphold rate is drastically higher in the “Corporate” financial sector than it is in the small broker or advisor sector. And yet these are the ones most heavily damaged by frivolous complaints.

    This and associated pages have some very interesting data.

    @Harry Katz: I know you are being jokingly provocative, but the reason this is time well spent is that even a relatively well-informed consumer really does not understand the reality of fraudulent claims, so it is important to get the message out there as far as possible.

    Pete Lihou just does not understand that it is a real problem and continues to insist that most complaints are merited when it simply is not the case.

  58. @Phil

    I can’t claim to understand the issue over Longstop but I sense that this is a cause with which you are deeply concerned and I will try to educate myself on the subject.

    The cause (one of them) that deeply concerns me is the way the FCA operates and I started a blog and government epetition ( ) because I feel so agrieved about their unprofessionalism with respect to the EEA suspension.

    If I appear to have been anti-FOS this was not intended, I’ve had very little experience of dealing with them and have no reason to believe that they operate to the same low ethical standards as the regulator and complaints commissioner. But it is my experience with the FSA/FCA that makes me resist any attempt to levy charges for complaints. I (and numerous others) have made complaints over the regulator’s role in the suspension of EEA. These were rejected for various reasons which most of us considered to be unreasonable (eg you can’t complain about the regulator’s legislative functions – which covers most of what the regulator does), so if the same charging structure applied, we may have been charged £50 for our complaints. This would have added insult to injury for me, but more seriously I know of people who have lost their entire retirement incomes and are seriously broke following the FSA’s action.

    Whilst, as previously mentioned, I haven’t complained about my IFA, I have recently complained about Skandia, because I relied upon their brand, in addition to the fact that E&Y had audited the accounts since inception, the FSA approval, and the FSA as regulator, to make my decision to invest. I understood that no small firm of IFAs could possibly vet all the investment products on the market or attend the sort of top brass presentations given by the FSA in London in which they make exclusive pronouncements about the industry. My IFA, like most, would only ever be a few jumps ahead of consumers like me and would rely upon much the same sources to evaluate an offering – track record, reputation, partners, etc..

    So I would strongly support changing the these institutions so that they are no longer funded by professionals such as IFAs, even though the burden would shifted to all tax payers. Most tax payers need to know there exists a proper regulator and ombudsman service. I would also support criminal proceedings against those guilty of actual fraud, as opposed to ignorance. Having studied complexity management I would not have thought it beyond the wit of man (or woman) to devise a better system so that obviously fraudulant or speculative claims were filtered out. But I do not think the industry should charge those who make claims, there are too many genuinly agrieved who do not deserve to be treated as potential fraudsters and who have already lost money which in most cases they will never recover.

  59. @Harry Katz

    When do you start the clock for new clients? I spent 15 minutes on the phone, while there is no initial business done i am happy that someone found us through unbiased and has a positive experience of our firm despite us not being able to tell him what he would like to hear. He thanked me for my time and acknowledged that i was acting without the chance of ever receiving payment for it. How would you have dealt with it? At what point do you inform potential clients that your time costs?

    @Pete Lihou

    Anybody, whether they be industry professionals or members of the public, are welcome provided they want to engage in constructive conversation. I hope some of the comments you have read on this site have informed your views of financial services. We’re definitely not all big businesses fleecing the public.

  60. @Nick

    My views have been informed Nick and I am very sympathetic to those in the industry who aren’t fleecing the public. Equally I hope you agree that my comments represent constructive conversation.

    If there are no more contributions on this topic (at least about my comments), I have now got to spend a few hours writing a management summary on the FSA and their breach of the Human Rights Act!

  61. @Peter L – Thanks for that, now you see what we are up against with the F-pack as many refer to them or “the Leviathan at Large” I had a 4 year disagreement with the FSA & then the FCA over the fact as a Ltd company, if we go out of business, the 15 year longstop DOES apply as the FSCS abide by it unlike the FOS and therefore to be clear fair and not misleading to my clients, I wanted to point it out in our client agreements, I was threatened by the then FSA if I did so, but as it is a common law issue I drafted our contracts and sent them a copy, 4 years later they threatened me again with a defective S166 legal notice in the hope I would remove it from our contracts, I again refused and insisted on a meeting with the people who had drafted the defective legal notice. In the end, they added about 4 lines to out 2 pages of A4 document (effectively a back down on their part), but no apology or sign of contrition. It took the over a year to consider our complaint about their mishandling as they would not investigate until either they or I had backed down. When they finally started to investigate the complaint (it is an internal system) they went over their own complaint handling timescales and didn’t release their response until 1 minute to 5 before I went on holiday (they knew I was going on holiday). The complaitn was rejected in all bar one item and not even an apology. I was told that had they made an apology, it would not have come from the people who made the mistake, but the person I had been dealing with at the NON independent internal department at the FCA established to nvestigate complaints about themselves, She was very nice, but had NO powers whatsoever and even if the FCA had caused me financial lost rather than 4 years of grief (lost opportunity cost), they do not pay any kind of compensaton for their errors (I knew that before I complained) the thing which took the biscuit was when I asked if any apology would be public and they said NO and I replied well I would make it public then, they told me I would need to seek legal advice as their apology might be legally privileged or something to that effect.
    As other advisers have said, the F-pack are out of control and need reigning in which is why advisers put pressure on at the last election for the FSA to be reformed. All we got was it renamed and split in two. I wasn’t one calling for its disbandment, but am getting to that point now. They all think they are so untouchable and treat people who run their own businesses as if they are employees and yet we get no protection from redundancy (enforced for many advisers by compulsory increased qualification requirements) and defective public indemnity insurance which with no longstop puts sole trader and partnerships at risk of loosing their homes when they cant even have a defence in court and the F-pack have reserved infinite right to judgement with the benefit of hindsight.

  62. @Phil

    Without wishing to sound crass, I feel your pain Phil, which is why I set up the epetition calling precisely for reform of the FSA. They are out of control and even the Treasury states they have no power over the way they conduct themselves – at least with respect to their processes.

    One of the principle reasons they are failing is that they have no effective complaints system to kurb their excesses and ensure they follow best practice. They appoint their own complaints commissioner, he or she has no authority over them, and they reject the majority of complaints because they refuse to accept complaints about their legislative functions – which as I’ve said is a huge chunk of their workload. There is no complaints system for these whatsoever – confirmed to me following a request under the Freedom of Information Act.

    Pseudo privatisation of public departments such as this, leaves them unanswerable to those they are supposed to exist to serve.

    We’re straying just a bit from the topic (!) but I couldn’t resist the opportunity to put in a plug for the epetition again. Anyone who feels as you and I do Phil, will help the cause if they sign it.

  63. @ Pete Lihou
    I completely agree with your last post. FOS is largely controlled by the FCA, who appoints their board, and seems to share their lack of accountability. There is no appeals process if a complaint is wrongly found against an individual adviser (or an organisation). This is why we feel as though we are banging our head against a brick wall and that we are dealing with judge, jury and executioner when it comes to complaints.

  64. @Peter L – I am pleased to say I have been able to sign the petition you raised as for once (unlike a lot of e-petitions) it has been fairly succinct and to the point.

  65. Thank you Phil.

  66. it should remain free

    The industry still cannot be trusted to act in the best interests of clients and policyholders

    Until it can it requires an arbitrator to look after consumers interests

  67. @iblameblair
    What a daft post. You clearly haven’t read the other posts. The issue isn’t consumer access, but false claims which need to be discouraged in order to facilitate genuine claims.

    Why should I be paying out big case fees as a result of Banks ripping people off (including me btw)?

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