Review carried out into FOS
May 12, 2008
An influential report has recently been released following a six month review of the Financial Ombudsman Service in the UK, with a number of changes recommended as a result of the review. The report was released by Lord Hunt of Wirral, and highlights a number of recommended changes picked up as part of the review into the FOS. Over seventy recommendations were made, all aimed at making the service more accessible and more transparent.
One of the major recommendations was that the service should focus more on helping low income consumers who are suffering severe debt problems. It was also suggested that the service change its name to something more welcoming and friendly, such as the Financial Complaints Service. He said that many people were wary of using the service because it came across ‘like a middle-class service for middle-class people’.
Lord Hunt said: ‘If my conclusions are accepted and my recommendations implemented, I believe the demographic profile of those using the FOS should, must and will broaden, as the organisation thinks not only in terms of its traditional areas of activity – dealing with matters such as mortgages, insurance and pensions products – but also in terms of the problems that typically afflict our less affluent citizens.’
He added: ‘Difficulties with debt management are only likely to increase in scale and numbers as the current economic difficulties mount. In many instances the sums of money involved will be on the low side by FOS standards, but the human misery attendant upon them can be devastating. Accessibility is no abstract concept.’
Referring to the recommendations an official from consumer group Which? said: ‘It is great news that the review has agreed that FOS should remain free to consumers. Introducing charges would inevitably discourage some people from using the service, particularly those in financial hardship. We also agree that a time-consuming and expensive appeals process would only mimic the courts - it’s very important that the service remains a quick form of consumer redress. FOS is the unsung hero of UK financial services regulation and helps to maintain consumer confidence in the industry.’
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