The Financial Ombudsman Service wants YOU

Adam’s look at the FOS considers its decisions, how they are enforced, and why making a complaint can be really worthwhile

By Adam Bernstein |

Published:  30 March, 2020

Part two

The Financial Ombudsman Service (FOS) exists to help individuals and SMEs seek redress against financial organisations such as banks, insurers, pension providers and investment firms.
    
There is a distinct process for making a complaint, free of charge, and it’s time limited. Of course, decisions can go against the complainant. When this happens, it’s possible to appeal to the Ombudsman itself. Beyond that, if the decision is still held in favour of the institution, it’s possible move the matter to the courts. But if the decision is accepted there is no further recourse. Either way, the decision is binding on the institution.
    
One thing to note, the FOS is designed to be simple to use and informal. There is no need to hire representation. That said, if the matter is complex or large sums are involved, it may be worthwhile seeking legal advice to see if a court, rather than the FOS, is the better option. Complainants should note that the FOS cannot take on the case if the matter has already been through the courts.

Decisions
When investigating, the FOS will make contact with the institution, seeking their side of the story. If the decision goes in the complainant’s favour the FOS can require the institution to either apologise, pay an award to cover loss, refund fees and charges, or pay compensation.
    
Since 1 April 2019, the FOS gained new powers to help more businesses (see last issue), so the limits on compensation rose. Complaints made before 1 April were limited to £150,000. But complaints relating to periods before 1 April but referred to the FOS after 1 April are limited to £160,000. However, complaints relating to periods after 1 April have an upper limit of £350,000. Beyond those limits the FOS can only recommend that the institutions pay more. On top of those limits – which only relate to compensation - are costs and interest.
    
Where a decision is made in the complainant’s favour and the FOS has made a costs or compensation award, the institution will be told what and who to pay. The decision is legally enforceable by the courts.
    
But what if the institution refuses to comply? In this instance it’ll be necessary to begin enforcement proceedings. Location of courts and enforcement offices can be found online in England and Wales at hmcourts-service.gov.uk, in Scotland at scotscourts.gov.uk, and in Northern Ireland, at courtsni.gov.uk.
    
The case must be brought in the name of the person or business on the final decision document from the FOS – exactly as it written. The FOS says that non-compliance is rare and so offers guidance to pass to court officials on its website under the heading of enforcing an ombudsman’s decision in court; they may not be aware of the process.
    
Where the institution cannot pay – it’s gone out of business or is about to – the claim can be sent to the Financial Services Compensation Scheme (FSCS) as a last option. Online at fscs.org.uk, the FSCS takes information from the FOS and progresses the claim under its separate rules.

In summary
While fighting a large financial institution puts a complainant in a David and Goliath situation, the FOS can level the playing field. There are time limits and a process to follow. But anyone or business with a decent case should actively pursue their rights.

Make contact
complaint.info@financial-ombudsman.org.uk or 0800 023 4567 (open 8am to 8pm Monday to Friday, 9am to 1pm on Saturdays).


Complaints data
Every six months the FOS updates its complaints data page. For the period 1 July to 31 December 2018, ten firms accounted for 96,854 complaints which were made up of 31,844 cases related to banking and credit, 2,694 to mortgages, 984 to insurance, 1,032 to investments and just 162 for pensions. But a whopping 60,174 related to PPI claims.

Stripping out the effect of the PPI claims which fell away at the end of August, it’s clear that the FOS has a heavy workload which is costing the institutions a fortune – some £53.1m – in case fees.

It’s just as interesting that those institutions that lost the most cases were TSB Bank (89% in favour of the complainant), DSG Retail (81%), Equifax (81%), GE Money Consumer Lending (81%), and Virgin Media Mobile Finance (71%).

Taking time to make a complaint can be worthwhile.
 


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