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Ukip attacks ‘immoral’ FOS over lack of financial qualifications

Ukip financial services spokesman and MEP Godfrey Bloom has launched a blistering attack on the Financial Ombudsman Service for not making its staff hold financial qualifications.

Speaking to Money Marketing ahead of the Ukip annual conference in London today, Bloom called for FOS staff to be as qualified as the people they are adjudicating and branded the lack of financial qualifications at the FOS as “immoral”.

He is calling for FOS staff to be as qualified as the people they are adjudicating.

The MEP for Yorkshire and Humber says he has regularly written to FOS chief executive Natalie Ceeney in a bid to boost FOS staff qualifications.

He says: “Small advisers’ livelihoods depend on an investigative ombudsman and audit service. It is entirely immoral that advisers are regarded to be in breach of law if they are not properly qualified to give advice but they can be adjudicated on by people without those same qualifications.

“Anybody who is adjudicating or auditing should not only be as qualified as the people they are inspecting, they should also have at least five years of practising experience.”

Bloom called for Ceeney herself look to achieve QCF Level 4 qualifications. 

He says: “The problem we have is even through she is articulate and intelligent, Ceeney has no financial experience of any sort so to be in charge of a financial ombudsman is quite wrong.

“It is not right. You would expect the head of the British Medical Association to be a doctor, the head of an accountant’s body to be an accountant or the head of the Law Society to be a lawyer. I don’t think financial services is any different, it is not a game for amateurs.”

In a recent Money Marketing interview Ceeney said getting all staff financial qualifications would lead to a quadrupling of the case fee to £2,000.

The FOS is hiring 1,000 staff this year to deal with the deluge of payment protection insurance claims. Ceeney says staff are qualified as adjudicators and the costs of financial qualifications could not be justified. 

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Comments

There are 30 comments at the moment, we would love to hear your opinion too.

  1. It pains me to say it but I do agree with Mr Bloom, any regulator should have industry experience. The point about: “British Medical Association to be a doctor, the head of an accountant’s body to be an accountant or the head of the Law Society to be a lawyer” is very well put.

  2. Having dealt with this organisation, I can suite you Godfrey is 100% right and also to add that FOS has no policy for screening fraudulent claims. In fact they advertise to encourage complaints. Something set up by government should not be allowed to do this. Because of its flawed system, the place needs a full audit for fraudulent cases lodged with the FOS. We can guess the results!

  3. In a recent Money Marketing interview Ceeney said getting all staff financial qualifications would lead to a quadrupling of the case fee to £2,000.

    To avoid this fee increase all they need to do is employ people with the qualifications.

  4. Beg to differ – the comment made was

    “It is entirely immoral that advisers are regarded to be in breach of law if they are not properly qualified to give advice but they can be adjudicated on by people without those same qualifications.”

    A complaint is any expression of disatisfaction with a service whether justified or not.

    As someone who has set up, or put right (failing) complaints operations, I can confirm that not all complaints are about advice, many are infact about service delivery.

    Therefore, there is no requirement for an adjudicator to be qualified on how to give ADVICE in order to assess all complaints.

    The qualification exists to ensure that those people who earn their living by giving advice are fit and properly trained to do so.

    Would you expect a policeman to go and learn how to drive a lorry, in order to judge whether it is being driven correctly – of course not.

    This is just another UKIP little-englander trying to raise his profile. Perhaps he should focus his attention on the arena he has been elected to, ie Europe, rather than dabble in UK domestic politics.

  5. Tom I think you will find that a police officer has to have knowledge of road traffic legislation in order to decide if an offence has been committed. He doesn’t need knowledge about double shifting, if it still exists, but rather if an road traffic offence has occurred.

    Otherwise solicitors like ‘Mr Loophole’ are able to get their clients off with driving offences.

  6. Whilst being totally in sympathy with the first three comments, I do agree with Tom O’Connor to some degree, that service issues do not really require this, but with the proviso that any ADVICE issues should be adjudicated by an experienced person with a suitable financial qualification. The main issue advisers have is fabricated complaints and that has nothing to do with qualifications anyway. If someone fabricates “Evidence”, be it the complainant or a CMC, then this is a criminal offence (Fraud by False Representation) and the FOS should report it to the Police as such. To paraphrase Tom’s approach, I do not have to be a lawyer to know that someone robbing a bank needs to be reported, so why should FOS continue to be complicit in criminal activity?

  7. To do this job you must have a feel for it. Without knowledge of the industry and the way things are done, conventions etc. I can see that it would be difficult to adjudicate.
    Most of the FOS staff are not up to the jobs and the wonderful salaries they are paid.
    This is my opinion.

  8. I am qualified to level 4 and have many other qualifications to add, but no one offered to pay for this on my behalf. I had to buy the literature, spend my own time revising and take time off to take the exams.

    Why is it assumed that when someone is employed, that the employer has to foot the bill….ah yes, it must be because they are civil servants and employed by the state.

    Whilst I agree with the article I also agree with many other comments but it is a very WEAK and poor argument to simply suggest that the FOS case size would quadruple and could not be justified.

    Most employers would look to take on staff who are suitably qualified at outset (whatever the qualifications deemed appropriate). Isn’t that logical ?

    You wouldn’t appoint a Judge with no legal back ground, experience or qualifications, would you Stuart ?

    Tom please, the police are highly trained over many years on all matters relating to the highway, driving standards and the laws of the road etc….and are more than qualified to judge whether a lorry driver is safe or not. Many complaints to the FOS are about suitability of advice, not service. So the judicator needs to understand the complexities of the advice in depth before commenting. hence the need for experience and knowledge.

  9. Tom is utterly wrong in this diatribe to separate advice from service. I would never try to pass judgement on a service if provided by a different culture in a different language. I appreciate I am taking this point to the extreme but if an adjudicator has no experience of the processes involved, language used or guidelines set out by regulators, how can they reasonably judge anything.
    No one has ever been held accountable for huge areas of waste and bad judgement at the FSA or FOS. Nevertheless, these same people continue to destroy an industry through ignorance and a lack of personal face to face experience. It is always right to walk a mile in someone’s shoes before passing judgement, irrespective of how superior you may choose to present yourself.

  10. To T O’Connor. This is why the industry is in a mess because of shortsighted comments like the policeman analogy. If a police officer deems the lorry driver is not driving the lorry, the lorry driver has an appeal system called a ‘court’ where he can challenge the policeman’s judgement. If the lorry driver produces evidence to show the policeman’s incompetence then the court will stand in favour of the lorry driver. There is no such appeal system with the FOS and therefore the argument is even stronger that FOS employees should be even more highly qualified than normal.

    The main problem most people overlook if that the FOS suit the government as they are a vote winner against the big bad insurers, banks and advisers. One has to look a bit deeper, but posts on website allow shallow comments.

  11. I’d say increasing the case fee to £2,000 could be worthwhile – if that’s really what it would take (accepting that cases about service / admin could easily be resolved by smeone without such qualifications).
    Firstly, the vast majority of adviser firms do not pay a case fee because the cases fall within your “free limit”.
    Secondly, even if you were invited to pay a case fee would it be worth it to have your work assessed by someone who knew what they were reading and what you were being accused of??
    I don’t know – but maybe it’s worth FOS doing a proper Cost Benefit Analysis and then putting it to advisers to decide … being given the choice would be a real treat!!

  12. Ahem! Before we start to overemphasise the qualification issue; have a look at how many Senior figures and Top Executives in the Banking world are actually professionally qualified in their field.

    There is an argument that the financial mess we are in is due , in part, to the import of such people over many years, and I suppose that supports the argument that FOS should set a different course and employ the right people. But we should be careful about adopting a ‘holier than thou’ approach when so many of our own industry leaders don’t make the grade!

  13. It is not unreasonable to expect that the quality of the investigators be at least as high as that of the advisers they will sit in judgement on.

    Judges are ex solicitors or QCs and the accused can have confidence that judgement is being extended by qualified an competent individuals.

    Currently I am aware of a case where a 1989 pension transfer/opt-out is being investigated by a 26 year old chap who came over from South Africa 18 months ago. Regardless of his common-sense or otherwise the fact is he cannot possibly understand the situation back in 1989 regarding the pension rules, the economic landscape or the lack of pension protection at that time. the fact that the FOS is also using temporary adjudicators and temporary Ombudsmen is also worrying.

    If justice comes at a price let’s pay that price and not suffer capricious and dodgy judgements at the hands of part-timers, temps and otherwise unqualified well-meaners.

  14. If I may I will respond to each of my critics in turn:

    Sean – taking your point: you are correct to state that the police officer requires knowledge of the law in order to determine if an offence has been committed. He does not need to have a driving license to do this, which is in effect what your qualification amounts to, ie a license to practice.

    Smartoneha – Prior to 2011, the majority of complaints were not around suitability (about 74% now are thanks to PPI) and after PPI the next highest issues are credit cards, current accounts and mortgages. Please refer to link:

    http://www.financial-ombudsman.org.uk/publications/ar13/about.html#product

    Also, as can be seen from the complaints data the spectrum of areas of complaints are so wide, that simply insisting that all FOS adjudicators obtain qualifications to advise is facile.

    Steven Balmer – Possibly due to your role in the industry, you perceive ADVICE to be synonymous with good service, but fail to appreciate that once the application is processed and the funds released, the account continues to be serviced for many years after and it is in this wider context that I use the word “SERVICE” as many complaints arise out of the misadministration of a mortgage account.

    John Adviser – Referring back to your analogy, indeed the case would go to court; and unless the case was a major offence, it would firstly appear in a Magistrates Court, which is in effect a tribunal of three lay people, who are supported by legal staff who give them technical advice. Therefore, so long as the adjudicators have the ability to refer to similar experts, the model which the FOS appears to follow is consistent and does not require everyone to be an expert.

    Tom

  15. For the benefit of the editing team – please inform your developers that I am not happy that I am having to type my comments at least twice; before they are getting sent on.

    Alan – I can assure you that they are not the part-timers, temps and otherwise unqualified well-meaners, which you describe them as. For the most part they are usually sourced from recruitment agencies who have extensively vet these people and come (for the most part) with legal and/or regulatory compliance experience.

    The reason for this influx is largely due to the impact of PPI cases, which now account for over three quarters of the cases heard and have singlehandedly contributed to a three-fold increase in as many years.

    Insofar as the need for your 26 year old South African to know the in’s and out’s of transfer/opt out rules in the late 1980’s, or the fact that there were some unscrupulous individuals who were persuading public sector workers to come out of their pensions at that time, is neither here nor there. If the individual is trained to the necessary standards to assess and adjudicate the case, then we should not be insisting that they are not qualified to do the job.

    If I can draw a parallel. About a year ago I was being interviewed for a role with the Nursing and Midwifery Council, which is the body for upholding the standards in those professions and is the equivalent of the GMC for GPs. Their Head of Conduct told me that the majority of her case managers were not former nurses or midwives; she herself was a barrister, whilst many of her team came from legal and other regulatory bodies.

    At the end of the day, the adjudicator will not simply be making a judgement off their own back. They will have a Tariff for guidance and there will be a verification and sign off process followed before a decision is made. As with magistrates and higher courts, there may be cases where there is a departure from the “Tariff”, but where these do happen, there is usually a valid reason given.

  16. For the benefit of the editing team – please inform your developers that I am not happy that I am having to type my comments at least twice; before they are getting sent on.

    Alan – I can assure you that they are not the part-timers, temps and otherwise unqualified well-meaners, which you describe them as. For the most part they are usually sourced from recruitment agencies who have extensively vet these people and come (for the most part) with legal and/or regulatory compliance experience.

    The reason for this influx is largely due to the impact of PPI cases, which now account for over three quarters of the cases heard and have singlehandedly contributed to a three-fold increase in as many years.

    Insofar as the need for your 26 year old South African to know the in’s and out’s of transfer/opt out rules in the late 1980’s, or the fact that there were some unscrupulous individuals who were persuading public sector workers to come out of their pensions at that time, is neither here nor there. If the individual is trained to the necessary standards to assess and adjudicate the case, then we should not be insisting that they are not qualified to do the job.

    If I can draw a parallel. About a year ago I was being interviewed for a role with the Nursing and Midwifery Council, which is the body for upholding the standards in those professions and is the equivalent of the GMC for GPs. Their Head of Conduct told me that the majority of her case managers were not former nurses or midwives; she herself was a barrister, whilst many of her team came from legal and other regulatory bodies.

    At the end of the day, the adjudicator will not simply be making a judgement off their own back. They will have a Tariff for guidance and there will be a verification and sign off process followed before a decision is made. As with magistrates and the higher courts, there may be cases where there is a departure from the “Tariff”, but where these do happen, there is usually a valid reason given.

  17. Here we go. UKIP currying favour wherever they can. Their words are just hot air. If they think their pronouncements will make a difference they must be living in Bongo-Bongo Land.

  18. I’ve just realised that this is the man who made reference to “Bongo-Bongo Land” and has just been, ie within the past hour, hauled over the coals for referring to women who do not clean behind their fridges as “sluts” at the UKIP party conference…….

    If this is the type of person being paraded by UKIP as one of their spokesmen, should we be having this discussion in the first place?

  19. Is it also immoral to refer to a room full of women as ‘sluts’, Mr Bloom? http://news.sky.com/story/1144453/ukip-mep-godfrey-bloom-calls-women-sluts

    Whilst I agree with his view that FOS staff should be suitably qualified, I don’t think any of us want to be too closely aligning ourselves with this particular bigot.

  20. Would you expect a High Court judge to have relevant qualifications?

  21. Just a quick thought – an increase from £500 to £2,000. How many paying cases does an adjudicator deal with each year – 100? I would guess more, I don’t know. But taking that number (which it would be lovely to have corrected) that implies a cost of getting to level 4 of £150,000 PER ANNUM PER INVESTIGATOR. Which seems a little high to me. I am not sure of many IFAs who paid that much towards the process of gaining their level 4 qualification.

    So I call BS on Natalie Ceeney unless a much higher proportion of cases are freebies than I guess. Or level 4 is a lot more complicated than I remember. Or FOS staff are barely literate and need more support than I’d expect (no comments please).

  22. @Tom O’Connor: “At the end of the day, the adjudicator will not simply be making a judgement off their own back. They will have a Tariff for guidance and there will be a verification and sign off process followed before a decision is made. As with magistrates and higher courts, there may be cases where there is a departure from the “Tariff”, but where these do happen, there is usually a valid reason given.”

    It would be wonderful if FOS worked like that,Tom! Sadly, they still charge case fees even when a complaint is spurious and vexatious on the basis that “There must be something wrong for the client to complain”. They miss the point in that much of this is criminal activity that is conducted by CMCs and supported by the attitudes displayed by Natalie Ceeney and her colleagues.

    I do not get free cases because I am in a network, but do you think that I should pay £550 just because someone wants to try their luck with a fraudulant complaint?

  23. @Exasperated Me : when she said they were judges not financial experts it caused me to check – and even a judge has to get qualifications just to be a judge … on top of the other knowledge they had to acquire before being a judge in the first place …
    @Stuart Duncan : a firm only pays case fees when it has more than 25 complaints in a year – so quite apart from FOS claims that they don’t allow spurious claims to proceed to being ‘real’ cases, the vast majority of adviser firms won’t ever pay as the vast majority of adviser firms never get anywhere near the 25 case free limit.

  24. @ Stuart Duncan: It may surprise you to know that I am not so niaive or unworldly enough to not appreciate that there are some people who will take a complaint all the way to the FOS in order to see if they can squeeze a bit more compensation. Sad to say this is a feature of the society we live in today.

    That said, the FOS will examine all cases put before it, as it is mandated to do.

    However, it may interest you to know that, after stripping out the PPI cases, which as I have previously mentioned, are casting a long shadow over the FOS and accounting for nearly two-thirds of cases presented, that between one-third and a half of the remaining cases are found for the consumer (for more information please refer to http://www.ombudsman-complaints-data.org.uk/ and click on the “Resolved” tab).

    So at the macro-level, the data would appear to contradict the rhetoric being echoed in this debate and support the argument that the FOS do not automatically find in favour of the consumer, no matter how tenuous the complaint is.

    Another interesting statistic which you will see is that approximately 90% of the case load comes from 150 firms and for the remaining 10% each firm has fewer than 30 complaints per year.

    The reason I mention this is that those firms who have the fewest may be the smaller firms and the ones least familiar with the FOS process. As a result their cases may be least prepared and/or lack the vital records which might cause a case to be found for the complainant. In which case, it is up to the firm’s compliance team to ensure that the proper controls and rigour is adhered to.

    At the end of the day we should also bear in mind that this whole debate was sparked by the comments of a close-market, neo-mercantilistic dinosaur, with mysogynistic tendencies who is current staring at the end of his political career for a series of crass statements in recent months.

    Perhaps we should throw this little debate into his political grave too!

  25. “Whilst I agree with his view that FOS staff should be suitably qualified, I don’t think any of us want to be too closely aligning ourselves with this particular bigot.”

    That ship sailed when we aligned ourselves with Gorgeous George Galloway. At least all Bloom has done is to let his unfunny barracks-room humour slip out into public life.

  26. @ Gill Cardy

    I should have said: “Would you expect a High Court judge to have relevant qualifications in whichever occupation the defendant is engaged if the claim is about the advice provided”.

    A claim should be dealt with in a fair and reasonable manner, if you face a court claim you have recourse to appeal, in financial services you could be bankrupted by someone who simply didn’t like your tone of face.

    However, my recent experience has shown that the regulators FCA, FOS and FSCS are not so erratic or pedantic or vindictive, they are more amenable, they listen. I can only conclude that the new faces have made a difference and that since John Tiney and a dozen others have left there has been some improvement.

  27. Apart from disregarding the legal protection of a longstop, I’ve heard stories of FOS adjudicators reopening cases that have already been closed by another adjudicator in favour of the intermediary and then ruling in favour of the complainant. If that isn’t a malicious abuse of power, I don’t know what is.

  28. @ Julian Stevens

    You may have heard stories but have you seen the hard evidence? I doubt it.

    There has been a story going round where adjudicators were deemed to have “gone native” and left the premises after being found out and then all their cases were revisited.

    Personally I think it is an urban myth.

  29. @ Julian Stevens & @ Exasperated Me:

    I have also heard of PPI cases which have previously been closed and then are reopened, usually following a decision on a case which has gone to FOS and been lost.

    I don’t necessarily think that these are as a result of FOS intervention, so much as the firms themselves (or their appointed outsourced s166 “skilled person”) in order to re-review any similar cases under TCF principles.

  30. A few years back a disgruntled FOS adjudicator left having become sick of how they ignored the precepts of UK law and did whatever they wanted to.

    She also exposed the fact that post-it notes were used on files where information was deemed too contentious to be allowed within the official files.

    Walter Merricks stated that the FOS unashamedly made new law and likened the adjudication process to a match where one side was playing uphill.

    We hear apocryphal stories about MI6 running wild and breaking all manner of laws yet here we have an organisation that ignores fact and places as much emphasis on the eroded memories of people whose interests are best served by the precise recollection of 15 year old events.

    The FOS is a travesty inasmuch as it pretends to find justice whilst applying an arbitrary mechanism that is neither consistent nor reliable.

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