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FOS reopens 13 ‘final’ decisions in 5 years

The Financial Ombudsman Service has reopened 13 complaints following a final ombudsman’s decision in the past five years, Money Marketing can reveal.

The FOS caused controversy in September when it reviewed a final decision upheld against Sipp operator Berkeley Burke for failing to carry out adequate due diligence on an unregulated collective investment scheme.

The FOS said Berkeley Burke had started the judicial review process, and as a result it was considering the complaint afresh. It has yet to make a decision on the case.

In response to a series of FoI requests submitted by Highclere Financial Services partner Alan Lakey, the FOS says since January 2010 it has reopened 13 cases following an ombudsman decision.

Of these, six resulted in a change in decision, all in favour of the business.

The FOS says in one case, a claimant had begun legal action and the ombudsman had been ordered by the court to pay £8,000 towards their costs. The payment was not made, however, as the decision was reversed in favour of the firm.

In its FoI response, the FOS says: “On the rare occasion that we reconsider an ombudsman’s decision the general reason for doing so is because further information comes to light.

“Of course another reason why the FOS makes such a decision is because it wishes to avoid the costs of unnecessary litigation.”

But a FOS spokeswoman says this has been “poorly worded”.

She says: “The only reason the FOS would look at a case again after an ombudsman decision is because new information has come to light.”

The FoIs also show the FOS made payments totalling £495,954 between January 2010 and October 2014 to complainants as compensation for poor service.

The payments relate to 2,264 complaints, on issues such as failure to adhere to procedures and timeliness. 

Lakey says: “This raises a lot of questions about the way the FOS operates, and it needs to give more clarity.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Incompetent Regulators 12th February 2015 at 10:21 am

    I’m sure if the FOS had a proper independent audit, there would plenty of other reversed decisions!

  2. It might be argued that if either party failed to produce all the evidence relevant to its case before a final decision was handed down, then tough. The other side of that coin is that either party should have the right to challenge what might be argued has been a miscarriage of justice. Tricky.

  3. How many adjudications were reversed?

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