Action group pressures FOS over ‘vested interest’Consumer say FOS sides with financial institutions

article care of professional adviser http://www.professionaladviser.com/professional-adviser/news/2463836/action-group-pressures-fos-over-vested-interest#

A consumer action group plans to petition the government to launch a review into the Financial Ombudsman Service (FOS), saying the body had vested interests in the “institutions that fund it”.
FOS Action Group said ombudsman decisions were biased towards the financial services industry and unfair on consumers.
The FOS also failed to adhere to common law but its decisions were often relied on in court disputes, creating further unfairness for consumers, the group said.

it has asked the Department for Business, Innovation and Skills to complete a study into the current Alternative Resolution Directive system and legal facility available to consumers in disputes.
It said it also wants other consumers to urge their local MPs to raise the issue in Parliament, while it will launch a further petition for a government review into the FOS.
The group formed early this year and is made up of consumers who believe they have been treated unfairly by the FOS in their dispute with banks.
Conversely, advisers have long bemoaned a perceived bias in the FOS’ decision making towards consumers. They alleged the service often veered away from the regulator’s own interpretation of its rules, making it difficult to know what to follow.

​However, despite continued adviser misgivings, a call-out by Professional Adviser for evidence of inconsistencies last July produced few responses (except one).

It had followed a similar initiative by FCA technical specialist Rory Percival, which, he said, also did not receive any response.

FOS was created by the Financial Services and Markets Act 2000 as an alternative to settling disputes in court.

In March, the Financial Advice Market Review (FAMR) recommended the Financial Conduct Authority (FCA) and Treasury look at improving the transparency of the processes and decisions of the FOS to help advisers manage liability.

The move came on the back of a refusal to implement an adviser long-stop to limit the time period in which claims can be brought against advice firms, which is currently unlimited.

Among other measures, FAMR recommended the FOS appoint an Independent Assessor to include a more in-depth analysis of the cases the body considers in its reports and to identify potential areas for process improvement.

FOS Action Group spokesman Tony Gentiloni said: “Our stance is that the current alternative resolution and ombudsman facility available to consumers in the form of the FOS is fundamentally compromised. Our end goal using various levers is that a truly impartial ombudsman is created with no vested interest in protecting financial institutions.

“One of the things I hear over and over is, ‘how impartial can the FOS be when they are funded by the banks’. This issue ferments into the internal processes of the FOS when dealing with complaints lodged by consumers about a bank or financial organisation.

“The way the financial ombudsman just processes complaints is being deemed as bias in favour of banks.”