Caroline Wayman, the Chief Ombudsman and CEO on the Financial Ombudsman Service (FOS) has resigned, saying on 10 March 2021 on LinkedIn that:
After 22 years on the provider and just about 7 years as leader government and leader ombudsman I’m stepping down from the function.
Her resignation comes the day after a extremely important article in the Daily Mail which identified:
Fraud sufferers and cheated shoppers are ready greater than two years for justice because of an extraordinary backlog on the Financial Ombudsman Service (FOS).
Criticism of FOS for a number of years
In 2016 a significant reorganisation at FOS aimed to shift extra casework to be carried out via generalist investigators relatively than specialist groups.
Backlogs of circumstances started to building up in some spaces.
A C4 Dispatches documentary in 2018 alleged that FOS workforce had insufficient coaching and figuring out of the monetary merchandise they had been making choices about.
In January 2019 Wayman used to be requested via the Treasury Select Committee about ready occasions after a whistleblower stated the time for a case to be allotted to a first-level investigator used to be ten occasions longer than earlier than the reorganisation. And that 8,000 circumstances had been in a queue for a second-level Ombudsman choice.
In November 2020, Wayman gave the impression earlier than the Treasury Select Committee once more – there’s a transcript here and a next exchange of letters between her and Mel Stride, the Committee Chair.
The have an effect on of coronavirus seems to have had a vital have an effect on at the effectiveness of the FOS, with over 56,000 circumstances open for greater than six months and over 23,000 open for greater than two years.
As the Committee expressed in our contemporary proof consultation, there are issues in regards to the FOS’ price range. It prices the FOS on reasonable £960 to unravel a case, towards the case charge of £650, and it’s investment its expenditure via its reserves.
Backlogs have reached alarming ranges
I don’t assume the transfer to generalist groups used to be a smart decision. Financial merchandise generally tend to develop ever extra sophisticated. Whether this can be a grievance about an insurance coverage fee no longer being made, a automobile being bought on unaffordable finance or a financial institution no longer refunding cash after a buyer used to be scammed, you wish to have your case to be checked out via a professional crew. Having noticed a large number of equivalent circumstances and realizing what questions to invite the company about is incessantly the important thing to getting an even choice.
But the expanding delays in resolving FOS circumstances can’t be put all the way down to this.
As I wrote in January in Lessons from Amigo – FOS grievance dealing with must be quicker there are 3 large issues of the present FOS proceedings techniques and handiest one among them is the extent of FOS staffing and its construction. The different two are:
- Firms don’t seem to be upholding proceedings consistent with FOS choices: Firms must make choices in-line with what they know FOS does – that is already a part of the FCA’s regulations however is just too incessantly left out via corporations. FOS can not trade this on its own, the FCA has to put into effect its regulations and demand that corporations trade their present practices. Then maximum proceedings would by no means have to visit FOS, which might be stored for deciding tricky or marginal proceedings
- There is a monetary incentive for corporations to head gradual on FOS circumstances: This must be got rid of. FOS must bill firstly of a grievance no longer the tip. And lenders that lengthen sending forms to FOS or lengthen responding to FOS investigator choices must need to pay a fantastic to the client.
The subsequent FOS CEO must act speedy
The newest FOS statistics, printed every week in the past, display dramatic will increase in proceedings coming even though, with Wayman pronouncing:
“Excluding PPI, new complaints are up by over 55% compared to the same period last year, with more and more people asking for our help to resolve problems with financial businesses.”
so it’s turning into increasingly more pressing to unravel this drawback.
It must be on the most sensible of the record for the incoming FOS CEO as soon as she or he is appointed.