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MPs reject #FOS’s review plans as ‘box ticking’ exerciseThe Financial Ombudsman Service (FOS) has been rebuffed by MPs, who have strongly criticised the complaint handlers’ plans for a review of past cases.

By 22nd October 2018 January 21st, 2019 No Comments
The Financial Ombudsman Service (FOS) has been rebuffed by MPs, who have strongly criticised the complaint handlers’ plans for a review of past cases.

The review was called for in the wake of a Channel 4 documentary that embarrassed the FOS, exposing how the organisation was overwhelmed with the number of cases it was assessing, with staff lacking adequate training in the products they were assessing.

FOS chief Caroline Wayman wrote to Treasury Select committee chair Nicky Morgan in September with details of the Ombudsman’s ‘finalised’ plans for the review.

The first stage will comprise a sample review exercise to check against the relevant controls and standards, which will be undertaken by Deloitte.

The second stage will comprise a further review of any case found not to have been handled in accordance with the FOS’s controls and standards to examine the outcome, which will be undertaken by Carol Brady.

But Morgan has today responded to say the committee thinks the FOS’s plans fall short. Morgan said ‘many people’ had contacted her committee ‘with concerns that the FOS has failed to act with due diligence in their cases’ and said the FOS’s review would not address these concerns without improvements.

‘In its current form, the review places too much emphasis on process. Whilst all the correct boxes may have been ticked when a case was being processed, it doesn’t necessarily mean a correct case decision was then made.

‘It’s also concerning that cases will be tested against the “Wednesbury reasonable test”, that is, the Ombudsman’s decision would have to be considered irrational as well as unreasonable. This is an extremely high bar as decisions can be poor without necessarily being Wednesbury unreasonable.’

Morgan also responded to the FCA’s announcement earlier this week it would raise the FOS compensation limit for small businesses by £200,000.

‘The timeline originally proposed by the FCA for increasing the FOS’s remit was ambitious and, ultimately, risky. It is right that the FCA has listened to the committee’s concerns and revised its approach. The committee will examine the appropriateness of this new timeline when it publishes its report on SME finance shortly.’

this article is care of https://citywire.co.uk

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Tim Kelly

Tim Kelly

Tim is a highly qualified Independent Engineer with over 20 years experience as an Engineering Assessor of damaged vehicles.

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