Sure, this may be industry jargon as many product providers and advisers use that term as they consider it a game but it is not a game and they are dealing with consumer and taxpayer money and, most important, trust.
Money Marketing’s comment piece refers to “vexatious” claims but who is to determine what is or what is not justifiably vexatious?
It has taken nearly three years for one particular client to be dealt with by the FOS and it is still not over. Is this vexatious? It has been in the hands of three FOS adjudicators, plus lightly touched by two other adjudicators and now finally it will make its way to the ombudsman. So could this effectively be regarded as an appeal?
Apparently, Lord Hunt wants to make the FOS more user-friendly (so that “lower-class” complainants will also use the service) but has he fully considered the implications?
Recently, we were told that there are 500 adjudicators and about 30 ombudsmen. Whether or not this figure is accurate, we feel sure that the recruitment of FOS staff is difficult and we wonder how many more employees Lord Hunt would like to see there.
If product providers (subject of the complaint) were forced to act more impartially, many comp-laints would not need to be referred to the FOS but as ever they seem to play the game of wearing the complainant down in the hope that they will go away, hence the need for third-party informed help.
Just imagine, if Lord Hunt drums up more business for the FOS from consumers with even less knowledge, the service would probably grind to a halt.
The question about the financial expertise of claim handlers often arises but this could have easily been dealt with when they became regulated by the Ministry of Justice.
All that should have been required is that a claim-handler should have passed at least the qualification that would have been required to sell (advise upon) the product in question.
What about the calibre of FOS adjudicators? Are many of them failed advisers or perhaps ex-advisers that have a more ethical streak and do not want to be coerced into selling products as opposed to advising?
Well, we certainly feel there is a hidden agenda by the hierarchy – to rid the UK financial world of third-party claim-handlers. That said, as they are now regulated, surely they should be allowed to claim their fees back from the offending product provider or adviser if a claim is upheld? This is allowable for personal injury claims so the clients get 100 per cent of the compensation.
Now that claim-handlers have to be regulated and pay registration fees, they have been put on a professional basis so it is illogical that third-party fees cannot be claimed from the offending product provider/ adviser. Is that not a human rights question?
Claim-handlers have all been tarred with the same brush and we get the feeling that the pink papers are anti them as well. If this is true, we hope those views are not held because of vested interests (advertising revenues, etc).
Take the MM headline, Chaser sets sights on whole-of-life, with some inane comment about claim companies not having the skills, etc. If they brought in the qualifications rule that we mentioned earlier, you may find that so-called chasing will become a worthy profession but do not forget that there would be nothing to chase if this was a decent business.
We are surprised that nobody has previously targeted the appalling way in which many unit-linked whole-of-life policies have been sold and even more surprised that the selling of school fees plans appears to have escaped scrutiny.
Perhaps we should not mention payment protection insurance without offering and explaining the difference of income protection.
It seems to us that the FOS is indirectly funded by commission (generated to pay the levy) and we feel that this may test its impartial stance.
This business needs to hold its hands up and all IFAs should immediately work on fees only, the onus being on them to not only recommend a product (if indeed a product is a best advice solution) but also advise the client from where that product may be bought most cheaply.
Lord Hunt does not seem to have included the Pensions Advisory Service in his report and this should be integrated with the FOS.
For the record, we do not currently advise clients with regard to such claims which goes to prove that the hierarchy’s “gagging” objective seems to be working.