Building societies are pushing for an appeal process to challenge Financial Ombudsman Service decisions.
Speaking in a BBC Radio 4 interview on the Money Box programme last week, Building Societies' Association director general Adrian Coles said society chief executives are pushing the Government for a change to the appeal process.
The BSA wants a process that would allow an appeal against a decision if it could be proved that one complainant's case could apply to several thousand customers and cost a company millions of pounds.
Coles says an institution should be able to appeal against any possible precedents established by FOS decisions while not challenging the decisions.
Nationwide Building Society commercial director Stuart Bernau, who was also interviewed on the programme,said the result of one decision made against a society can have a significant impact on its financial stability.
Bernau admitted that Nationwide's decision in 2001 to compensate customers on dual variable-rate mortgages had cost it £160m — around £70m more than anticipated.
Coles said: “Not only does the ombudsman decide the rules, determine the penalty and determine the outcome of the cases he is court, judge, jury, executioner and everything else. The consumer has a significant advantage in dealing with the ombudsman. The consumer is not bound by a decision of the ombudsman, the firm is.”
Consumers' Association senior policy adviser Mick McAteer says he is very concerned about the societies' move. He says it could mean that only the first person to spot a problem and complain would be compensated.
Scottish Widows Investment Partnership has rolled out an aggressive UK opportunities fund after a revamp of its UK equity portfolio.
UK equities investment director David Urch has repositioned the £38m fund, which became part of Swip's Oeic range in October 2002, to suit a best ideas' approach. He will seek 30-40 stocks of any market cap that looks cheap over the longer term with good earnings' potential.
His main targets will be recovery stocks and firms with growth prospects although he is keen to dodge particular sectors – such as pharmaceuticals – which he considers uninteresting. The fund will be aimed primarily at discretionary managers and fund of funds providers. Minimum investment is £25,000. Charges are 1.5 per cent annual and 5 per cent initial. Commission is 3 per cent.
Bestinvest fund analyst James Calder says: “David does not really have a identifiable track record and none of Swip's funds is that exciting. Our reaction is lukewarm at best.”