Finance News

Independent review into FOS finds "major challenges" but no systematic bias

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12th July 2018
" The report makes a series of recommendations for the Board to consider in order to improve confidence in the quality of the FOS’ work, and in turn, in the financial services industry. "

Consumer rights champion, Richard Lloyd, has published his independent review into the findings of a Dispatches programme about the Financial Ombudsman Service.

The documentary raises concers that some of its staff were not behaving appropriately, particularly around the way in which complicated casework is being done and how the FOS organises its people.

Lloyd noted "legitimate frustrations" about the speed with which the FOS resolves disputes and concerns about the quality of some casework, but argued that "this is not new: balancing fast, fair and free to the consumer has been a tension for the FOS since it was created".

Lloyd added that FOS "continues to face major challenges" as it struggles to balance the competing demands of increasing speed and quality, resolving its remaining PPI caseload and keeping costs under control.

He added that there "remain critical risks to the quality of the service’s work, including people, leadership, technology and costs", and noted that a "number of experienced staff are disengaged".

However, he concluded: "Despite this, I have found that people at the FOS have strongly-held and positive values. They believe in its mission and want to ‘do the right thing’, while recognising the need to improve.

"In summary, I have found that the FOS provides an effective and essential service for many thousands of people. It is important that more consumers use the FOS, knowing that it is not institutionally biased against them, while realistic about its limitations and aware of their right to escalate complaints. But to retain public confidence the FOS must work hard to continuously improve the service it provides for consumers and businesses."

Chief ombudsman and chief executive of FOS, Caroline Wayman, commented: “We’re grateful to Richard Lloyd for conducting such a thorough review. We’ll be considering carefully what it means for our service, keen to learn from the past so we can do things even better in the future. We will publish an update on our progress by the end of the year."

Nicky Morgan MP, Chair of the Treasury Committee, added: "Trust in the FOS has been damaged. The report makes a series of recommendations for the Board to consider in order to improve confidence in the quality of the FOS’ work, and in turn, in the financial services industry. The Board must now demonstrate that they are up to this job.

"The Committee will scrutinise the report in detail when it takes evidence from Mr Lloyd and the Chief Executive and Chair of FOS next week."

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