Financial Ombudsman Service Failings Exposed

Positioning itself as an independent adjudicator, the Financial Ombudsman Service (FOS) steps in when an issue arises between a bank or other financial institution and one of its customers.

The FOS is free and claims to be an unbiased, open and transparent organisation that, according to its website, offers ‘Financial dispute resolution that’s fair and impartial’.

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Approximately one million people a year complain to the FOS about financial institutions that have fallen short of customer expectations in a variety of ways. The following is taken from the FOS website, published on 11th September 2019 regarding their previous 6-month review:

“Today we’ve published data showing how many complaints we received about individual businesses between January to June 2019. The data shows that we received 161,390 total complaints – an average of over 6,000 a week. PPI remains the most complained about product, with over 70,000 new complaints received in the first half of 2019. On average, we upheld 29% of complaints in the consumers’ favour – and, excluding PPI, the average uphold rate is 39%”.

Channel 4, in Spring 2018, aired its program ‘Dispatches’, which highlighted significant flaws within the FOS organisation, including:

  • Ill equiped staff – according to instructors, whilst certain staff members had financial backgrounds, others were ‘ill equipped’ to deal with complex cases, even admitting that some staff members had been ‘thrown in’ with no training at all.
  • a lack of empathy towards customers, with ‘insiders’ confirming that unrealistic targets, complaint backlogs and pressure were resulting in the service siding with the financial institutions, as generally, this made their lives easier.
  • staff having to ‘Google’ various financial product information due their lack of training and knowledge.
  • an admission that legitimate claims were being missed and a huge backlog had developed, even when customers were about to lose their homes!
  • accusations being made at the public for ‘latching on’ to published decisions.
  • no account being made for the facts, nor how the product was sold.

Rushanara Ali, the Treasury Select Committee member, was told by staff when she visited the FOS that pre-selected, rehearsed cases were used as an executive attempt’ to make the service seem more professional, hiding the fact that some staff members didn’t know what they were doing.

The former Minister of State for the Department for Work and Pensions, Baroness Ross Altmann described the findings as truly shocking’, ‘utterly unacceptable’ and ‘deeply worrying’. She also described distress and inconvenience payments made to customers as ‘woefully low’.

Towards the end of the Channel 4 program, a customer summarises her overall experience by saying…”If you’re an ordinary person and you try to take on a big powerful institution like a bank, it’s like kicking a battleship, you just don’t make any impression on them at all, and they just sail on regardless. I thought that the FOS was there to represent the individual, the ordinary person, to challenge the bank”. 

Our thoughts:

Money & Me Solicitors felt it was significant that members of staff didn’t feel comfortable exposing their identity, instead, opting to remain anonymous, portraying their experience through actors. The implication being that there may be a culture of fear within the organisation, one that is not conducive to adopting a fair and impartial service! 

You can read Channel 4’s own summary of the program here

The trust between banks and customers may have been lost a long time ago, so following the issues highlighted in the Dispatches program, the question now is, “can you trust the Financial Ombudsmen Service to deal with your complaint fairly and in a timely, unbiased and sympathetic manner”?

Unfortunately, over two years on from this disparaging report, we are disappointed to find that, in our experience, it’s ‘business as usual’ over at the FOS. Clients are often waiting over two years for their claim to be finalised… sometimes much longer!

Lastly, the employee forum website, ‘Glass Door’, provides the reader with a useful insight into how employees feel working at the FOS and their jobs. One recent post by a disgruntled employee reads, Advice to Management; Ever since the restructuring in 2016 the question of “What’s the right thing to do here?” has too often been replaced with “How quickly can I close this case regardless of what happens?”

This comment, and other comments like it, should raise grave concerns to anyone considering using the services of the FOS and whose future financial security may depend on the quality of service they receive. This is especially the case when it is unclear how staff are incentivised, what the key performance indicators are (and who decides these) and how well the FOS itself is regulated.

It’s not all bad though; there are several, much more positive reviews than the above and we would encourage you to read them and decide for yourself whether the Financial Ombudsmen Service is ‘fair and impartial’.

We believe it is crucial that you are able to make an educated and balanced decision as to whether ‘going it alone’, or appointing professional assistance is the best way forward for you and your financial claim, particularly claims related to final salary pensions, which are often extremely complex.

Money and Me Solicitors are working hard to represent the individual and ensure they get the financial justice they deserve. If you would like to find out more about our service and how we can help, please complete the contact form below and a member of the team will get in touch. Alternatively, we can be contacted on 01925 859625.


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