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

[AuntieP]

I see mention in the forum of FOS interest rate calculations etc. Basically FOS often do not check firms calculations properly, if at all, especially if the firm has made an offer. See below my evidence to the Hunt Review of the FOS.

 

"It is FOS policy that firms which submit offers of compensation are treated differently from those which do not make an offer. Few ordinary people will be able to understand this. This policy is not made known to claimants so far as I know, yet the professional claims managers at the firms are well aware of it. All the firms must know that if they submit an offer there is a good chance that the FOS will not check the calculations, nor will the offer be compared with the FOS in-house guidelines. In the light of this, a good tactical move would be to submit a low offer and hope the FOS lets it though without checking.

A good example of the use of this policy by a firm is in the case of my Aunt. The firm proposed a reasonable offer and backed it up with its own calculations. FOS said fine, it looks reasonable, we don't need to check it. In fact the interest rate used was not reasonable ( a higher rate was available anywhere and it was 1% below the FOS recommended figure) and a tax error was not noticed resulting in an underpayment of £8000. But because the offer met the FOS's requirements to be allowed though without checking, it got though the net.

 

I know this is definite FOS policy, I have it in writing from the Service Review Team and the Independent Assessor. It is a deeply flawed policy, unfair to claimants and biased in favour of firms. FOS should review this policy."

 

To read more and see what really happens when you go to the FOS please see my full evidence to the Hunt Review at

www.financial-ombudsman-problems.co.uk

[AuntieP]

. when i said i wanted my complaint looked at again the adjudicator rang me and stated that even if i went to the ombudsman things would not change as they had already discussed my complaint with them and the ombudsman was minded to reject my complaint. surely thats not right or legal that i have a right of appeal but its just a token. .

 

FOS dont have an independent appeals procedure. They work on the basis that all 166,000 decisions made by the service last year are correct. But they do maintain that passing a case upwards to an Ombudsman is the FOS 'appeals' process. If the Ombudsmen have pre-empted this and already made their mind up then that drives a coach and horses through the 'appeals' process.

 

I suggest you ask again for an Ombudsman who has not already seen any aspects of your case to review it. If FOS refuse to allow this, complain using the complaints procedure to the Head of Casework and if necessary Independent Assessor. This will be lengthy and (in my experience) won't get you very far, but its worth a try.

 

Whatever you do dont accept the decision unless you are happy with it. Once the decision is accepted that is the end of it ...The Ombudsman's decision is final...there is no appeal.

[AuntieP]

In 2010, FOS recruited about 100 contractors (£210 per day each!) I was one of them.

 

dirk..."contractor" ??? ...were you an Adjudicator ?

 

FOS are now looking for self employed, fee paid Ombudsmen, and recent adverts for Adjudicators were for a 9 month fixed contract. Something is up...perhaps a shortage of funds as the huge number of PPI cases is bringing in no money because the cases are not 'closed' so no fees are paid by the firms.

Edited March 28, 2011 by AuntieP
remove white space hopefully, plus minor clarification

[AuntieP]

error

[AuntieP]

The Independent Assessor is appointed by the FOS board, but not from the board. Although the previous IA was a previous board member, the current IA, Linda Costelloe Baker was nothing to do with FOS before her appointment, indeed, sensitive to criticism about lack of independence, her selection board was modified to included a "public interest observer" though what this person did ( with non voting observer status only) is not known.

 

The current IA is a good person who tries hard, but she has no powers to do very much and she is SPECIFICALLY PROHIBITED from even commenting on the merits of any FOS decisions. Even if she makes a recommendation the FOS board can decide not to follow it. (Though they have never done this in 10 years). She receives a very large salary (one of the highest at FOS if it is scaled up to show her annual rate as a comparison) and spends her time assessing "service standards" and making a few small awards (£25-£1000) for poor service standards. Her last Annual Report gives one shocking example of FOS poor service, proving that she does perform a useful role and does not seem to be afraid to criticise FOS (service standards only !).

 

Although people who have suffered poor service from FOS can appeal to the IA, those who have suffered poor decisions have no appeals process. All Ombudsman's decisions are "fair and reasonable" and none of the 20,000 decisions FOS ombudsmen made last year have any mistakes. The ombudsman is always right and his decision is final so no appeals process is necessary. I can think of no other role in public life which has such powers.

 

The IA's annual report is hidden away at the very end of the FOS Annual Review ... read the case study on page 78 (Its a big download unfortunately)

http://www.financial-ombudsman.org.uk/publications/directors-report-2011-12.pdf#page=76

 

Her personal web site is here ... worth a look...

http://www.independent-assessor.org.uk/

 

Another more critical view of the role of the IA is here

http://www.financial-ombudsman-problems.co.uk/independent%20assessor.htm

 

The only hope for changing the FOS is to write to your MP. If enough of them get the message that change is needed we may get somewhere.

Edited September 7, 2012 by AuntieP
typos and minor edit

[AuntieP]

Try this site for launching a petition

http://www.change.org/en-GB?utm_medium=email&utm_source=signature_receipt&utm_campaign=new_signature