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LibDem MP backs IFA over FOS fine appeal

Liberal Democrat MP Nick Harvey is fighting the corner of a constituent IFA&#39s firm which faces closure if the fine levied against it by the Financial Ombudsman Service is not quashed.

Harvey is demanding that the Treasury redraft legislation to allow IFAs the right of appeal retrospectively against FOS decisions. He says a partner in an IFA, who lives in his North Devon constituency, has found new evidence that he believes would absolve his firm but is unable to appeal against the decision on a pension transfer case and is facing a bill of around £40,000.

The only route of appeal for firms is through judicial review which solicitors Drummond Miller say costs around £25,000 and is beyond the means of most IFA businesses.

Harvey believes the FOS has become too powerful and is “making case law” beyond the remit of the regulator. He welcomes the current Treasury review of the FSA but wants to see action taken to help firms without recourse to appeal against FOS decisions.

Harvey says: “Parliament is particularly squeamish about looking retrospectively. But it is not completely unknown to go back over old ground. All sorts of prosecutions can be revisited if it can be proved that a miscarriage of justice occurred. At the moment, all we can do is shame the ombudsman and demonstrate the injustice of what has gone on.”

FOS communications manager Alison Hoyland says: “We do have an independent assessor which looks at the decision process if a consumer or firm believes their complaint has been mishandled. But I doubt whether the Treasury review, which includes looking at the wider implications of the FOS for industry and individual firms, will look retrospectively.”

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