MPs ask Financial Ombudsman Service to address reported failings

14 March 2018

The Financial Ombudsman Service (FOS) is under fire from MPs after a television investigation alleged poor training standards and decision making at the industry watchdog.

An undercover investigation by Channel 4’s Dispatches programme suggested that many of the Ombudsman’s employees had limited knowledge of the financial products they were being asked to make decisions on.

The programme claimed that in some cases, this led to decisions being reached without the case files being properly considered.

The Financial Ombudsman Service is the body which rules on disputes between customers and financial institutions. In the 2016/17 financial year, it received 321,283 new complaints from consumers.

But chair of the Treasury Committee Nicky Morgan MP has called on Caroline Wayman, chief ombudsman and chief executive of the Financial Ombudsman Service, to respond to the claims made in the programme.

The Conservative MP wants the Ombudsman to assure Parliament that the issues identified by the programme did not lead to poor decision making for customers, particularly the suggestion that in some cases decisions could have been made in favour of banks as it is easier to close a case in this way.

Mrs Morgan has also asked the Ombudsman to address the concerns over the quality of training provided to staff, and to see whether it can reopen cases which may not have been judged correctly.

“What evidence is there to assure Parliament that the problems identified in the Dispatches programme have not led to poor decision making at the Financial Ombudsman Service?,” she asked the Ombudsman.

“For example, what are the Financial Ombudsman Service’s processes to undertake quality control on previous decisions? Does the Financial Ombudsman Service have the ability to reopen cases that it feels it may not have decided correctly?” 

Rushanara Ali MP, a member of the Treasury Committee, visited the Financial Ombudsman Service in 2015 but the programme alleges that her visit was stage managed to downplay the issues facing the organisation.

Mrs Ali told the programme: “The Ombudsman needs to demonstrate that it has satisfactorily dealt with cases in the past. If it can’t do that then members of the public will want to go back and have their cases reviewed where appropriate.”

A spokesperson for the Financial Ombudsman Service says: “We’ve received the letter from the chair of the Treasury Select Committee, and will be responding in full, in time for the deadline.”

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