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FOS reports increase in complaints on deferral periods and MVRs

The Financial Ombudsman Service has seen an increase in the number of complaints on deferral periods and market value reductions.

In its latest Ombudsman News, the FOS says: “Volatile market conditions have led to an increase in the number of investment complaints referred to us by consumers who have put money in property funds and seen a decline in the value of their investment.

“We have also seen an increase in complaints from consumers who have discovered, when withdrawing money from an investment or attempting to do so, that the business has implemented a deferral period or a market value reduction.”

The FOS does not deal with complaints that relate solely to poor investment performance.

But it says complaints prompted by poor performance often reveal underlying issues that it is able to look into such as inappropriate advice and failure by a firm to disclose relevant information about risks relating to an investment.

The FOS adds: “We are not usually able to consider complaints relating solely to the timing or extent of deferral periods or market value reductions since these are matters for the commercial judgement of the business concerned.

“But we will check the possibility that the business might implement such measures was properly brought to the consumer’s attention at the time of the sale. We will also look at whether the investment was suitable for the consumer.

“The possibility that an investment could be subject to deferral periods or market value reductions might be an important factor if, for example, the consumer’s circumstances meant they required easy and immediate access to their money.”

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