Financial ombudsman comes under fire as insider reveals litany of bad practices

[mightymouse_69]

So how do you think it should be funded?

[parity4all]

seem to remember someone (on another website) suggesting ombudsman should chase after the money, rather than trying to gloss over complaints. i.e Ombudsman becoming poachers as opposed to gamekeepers.

 

I would add that there would need to be a right of appeal to a Court(s) of any Ombudsman decision. This way, there's a strong check on each and every Ombudsman decision.

 

The FOS did run a consultation on reforming the funding model back in January 2012, with the intention to change the case fee structure. Have a gander: http://www.financial-ombudsman.org.uk/news/pdf/Case-fees-feedback-statement.pdf

 

The gist of it is that they suggested, increasing the number of free cases from 3 to 25, while businesses that generate the most of FOS work (businesses most complained about) pay case fees based on the work generated. FOS says it

 

means that a business that produced 10% of our work should expect to contribute around 10% of our costs.

 

I think the free cases figure is now 25 (starting April 2013), apart from this I don't know what else has changed. The previous idea about gamekeepers turning to poachers sounds promising though.

Edited November 1, 2016 by parity4all
added detail

[mightymouse_69]

 

I would add that there would need to be a right of appeal to a Court(s) of any Ombudsman decision. This way, there's a strong check on each and every Ombudsman decision.

 

The gist of it is that they suggested, increasing the number of free cases from 3 to 25, while businesses that generate the most of FOS work (businesses most complained about) pay case fees based on the work generated. FOS says it

 

Those proposals were implemented - so you do have group charging for the bigger businesses.

 

As for right of appeal to a court. That would run totally against the idea of having an Ombudsman service. The idea is that they are an alternative dispute resolution provider. The very crux of that is that they are an alternative means of resolving disputes.

 

If people want to go to court, then they can do so. A lot decide not to - because an Ombudsman offers a less formal, free and normally quicker alternative.

[parity4all]

Those proposals were implemented - so you do have group charging for the bigger businesses.

 

As for right of appeal to a court. That would run totally against the idea of having an Ombudsman service. The idea is that they are an alternative dispute resolution provider. The very crux of that is that they are an alternative means of resolving disputes.

 

If people want to go to court, then they can do so. A lot decide not to - because an Ombudsman offers a less formal, free and normally quicker alternative.

 

 

Soon after posting, realized that there has been another consultation in 2015/16:

 

http://www.financial-ombudsman.org.uk/publications/PB-2016-17-consultation.pdf

 

About the right of appeal to court. I'm not suggesting using the Courts in place of an Ombudsman. Just being able to appeal a decision of the Ombudsman to a Court, will be enough. Not many people will do it, due to cost, the complexity of the legal system etc. But I think having the ability to challenge a decision of the ombudsman will make the FOS take more care with their decisions. Decisions will soon stop being based on hearsay evidence (of banks), evidence produced by customers will start being taken in to consideration etc.

 

See this article, and especially the comment:

 

You will never get justice until you have a separation of powers. In the case of FOS this would mean a right of appeal to the courts. At a stroke FOS will be dragged into the rules of natural justice, precedent - both binding i.e. from a higher court or persuasive from a lower court. Rules of evidence would need to apply and hearsay would not be accepted. FOS would then need to have an eye to the rejection by the courts of their decisions on appeal. This is of course the reason why FOS would fight to retain their lack of appeal procedure for the adviser but are happy to keep it for the client. The system is wrong, unjust and bias towards the consumer. If one is ever asked to justify fees - ask what fee one needs to command in order to compensate for the exclusion of advisers rights to natural justice?

Edited November 2, 2016 by parity4all
fix typos, added detail

[Old Cogger]

FOS adjudication not binding if you refuse to be binded by it, as far as court cases they refuse to comment on case thru courts saying it is for courts to decide, and will not stipulate fact. but guidelines not fact.

 

been there wrote the book and wrote report and read it utter waste of time and the courts have ignored facts proven. ( i.e. the dirty debtor) in Judges cases they have mis directed themselves when challenged in Appeal cases. on many occasions if you can afford the fees to go that far.

 

 

collusion all round.

[mightymouse_69]

At a stroke FOS will be dragged into the rules of natural justice, precedent - both binding i.e. from a higher court or persuasive from a lower court. Rules of evidence would need to apply and hearsay would not be accepted.

 

In some of your post, you talk about the consumer not getting a fair deal. However the quote you gave me (above) is from a business saying that FOS is skewed in favour of the consumer.

 

But say you get what you want - and a court can have a final say. What effect would this have? Well, currently, the FOS considers the following when making a decision:

 

"fair and reasonable in the circumstances of each individual case. We take into account the law, rules, codes and good practice"

 

But, if what is mentioned in the above quote happens, you get rid of the fair and reasonable part. Instead it comes down o the letter of the law.

 

That's puts ordinary consumers at a huge disadvantage. Looking at a well known scandal - PPI - you'd have seen very few complaints upheld. Businesses normally did what was required of them when selling these policies. It is the Ombudsman's ability to look at what is 'fair and reasonable' in a certain case which allows many of these complaints to be upheld.

 

So while you've said that you wouldn't replace the Ombudsman with a court - your suggestion would effectively do just that.

 

Not many people will do it, due to cost, the complexity of the legal system etc. But I think having the ability to challenge a decision of the ombudsman will make the FOS take more care with their decisions. Decisions will soon stop being based on hearsay evidence (of banks), evidence produced by customers will start being taken in to consideration etc.

 

And here's a massive issue. The part in bold that is. What's to stop businesses pushing the case to court - effectively forcing those who don't want to deal with the complexity of courts or who can afford to do so have to drop their case.

 

Also - customer evidence is taken into account. It's just that often, the evidence provided by customers just isn't as good as they think it is.

 

To me, the current situation is just fine. If you want to have you case dealt with by a court you can. If you want to go to the Ombudsman you can. If you want to go to the Ombudsman and then to court if you don't get the answer you want - you can.