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Lawyer slams watchdog&#39s cash awards for distress

The Financial Ombudsman Service should not make awards because of mental distress caused by bad advice, says a solicitor who specialises in financial services.

Bond Pearce assistant solicitor Gary Oldroyd points to repeated decisions in the courts ruling that distress has no role to play in financial contracts and says this should apply to the ombudsman.

Oldroyd, who works at the Exeter office of the national law firm, says these awards are made as a matter of routine even if the original complaint is not upheld.

While conceding the average payout is just £500 and the maximum £1,500, Oldroyd says how the awards are decided appears arbitrary and there is no benchmark.

The FOS rejects Oldroyd&#39s claims, saying it is not accurate to compare the service with the courts as the two operate in very different ways.

Head of communications David Cresswell says: “We certainly do not make awards for distress on a routine basis. It would have to be above the fact that someone has a complaint.”

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