The Financial Ombudsman Service has attempted to answer some of the common ‘myths' advisers raise about the way it operates.
It believes several misconceptions have been circulating in the industry for some time, with firms arguing the Fos drives up complaints and that firms should be able to appeal ombudsman decisions.
Emma Parker, press officer at the Fos, says claims the ombudsman wants to drive up complaints are not true, as only one in six initial complaints referred to it go on to become a case it formally investigates.
She argues the consumer contact division will resolve straightforward cases or explain to consumers if it is clear the firm has treated the consumer fairly.
The Fos also has a team dedicated to working with firms to find ways to resolve complaints without the need for the case to be formally referred to it.
Parker states: “Our unit cost – how much it costs on average to deal with each case – has fallen year-on-year as firms have benefited from the economies of scale that we have been able to achieve as we have had to grow to cope with the large number of mortgage endowment cases.”
In addition, she claims there are several stages of ‘appeal’ in the complaints process and in only 7% of cases is a final review by an ombudsman requested.
“In more than nine out of 10 cases, both sides are satisfied with the recommendation made by our adjudicators and don’t want a final ombudsman’s decision,” says Parker.
There are also procedures in place for cases which might have ‘wider implications’ to be looked at by consumer and industry panels before an ombudsman makes their final decision.
Many advisers have also stated the Fos is weighted in favour of consumers and that it does not require consumers to tell the truth.
But Parker says the ombudsman finds in favour of firms in around 70% of cases, and this does not mean 70% of complaints are unjustified.
“Many of the complaints we don’t uphold would not have needed to come to us if the firm had tried to deal with the complaint in a positive manner and explained more clearly why they did not feel the complaint should be upheld,” she states.
In addition, the complaint form asks consumers to confirm the information they have given ‘is true and accurate to the best of their knowledge’ and it must be signed before the Fos looks at a case.
Another common concern among firms is consumers are increasingly using claims management companies (CMCs) in their complaints to the ombudsman.
Parker points out consumers do not need to use CMCs but can complain directly to the firm in the first instance.
She adds: “However, the way some complaints have been handled has perhaps made some consumers less inclined to complain directly to a financial firm as they do not think their complaint will be dealt with fairly. Increasingly, we are finding that in complaints about IFAs a third party is representing the consumer – and this third party is often another IFA.”
The Fos is conducting a survey later this year to find out more about what firms think of its service.
“This information will give us an insight into areas where there may be more we can do to make the ombudsman experience as positive as possible for firms,” says Parker.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
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