The FOS was set up to provide the final stop for consumer complaints about financial firms. The organisation designed to be an important and impartial service to both customers and financial firms, is now at the center of an enquiry by MP´s on the Treasury Select Committee following the airing of the television programme, Dispatches, shown on Channel 4 in March 2018.
A whistleblower from the FOS has revealed that there are approximately 30,000 cases still to be assigned to an investigator and a chief executive has admitted that as many as 8000 consumers are still waiting for a decision on their cases.
Caroline Wayman, the Ombudsman´s Chief Executive, did not deny the whistleblowers allegations, she has said that they typically deal with about 100,000 core disputes each year, but recently this amount has increased to 150,000, particularly due to a massive increase in ´payday lenders´ claims. The Ombudsman´s official figures for 2017 state they received 340,000 complaints and resolved more than 400,000. However, FOS employees have admitted that due to targeting they have had to rush cases through and in some circumstances have ruled in favour of the financial institutes, as it was easier than persuading them to pay out compensation. All very unfortunate when the service was revamped in 2016 in order to resolve the problems, but now there are allegedly three times as many cases still waiting to be heard than before the so-called improvements were made.
An independent review was carried out on the FOS due to concerns that some of its staff were not behaving appropriately, nor were they fulfilling the organisations’ legal duty, and the findings were reported in July 2018. The review was specifically to look into the main complaints raised in the dispatches program, namely;
· Staff are not equipped to deal with complex problems
· Failure to ask for detailed information if the complaint was about fraudulent activity on a bank account
· No awards for distress or convenience considered
· Staff being biased for and against some complainants
· Ability to write off a debt not applied correctly as reluctant to set a precedent
· Due to pressure cases were often found in favour of the banks
· It took 2 years to deal with 11000 PPI complaints
· In 2015 & 2016, 1000 unopened letters were found, some of which were two years old.
· Investigators missing targets suffered penalties through either pay or promotion
· Major backlog of PPI complaints
The review has ascertained that the FOS must ensure that caseworkers have sufficient knowledge support, training and quality assurance. They must also plan for continuous improvement so that complex cases are thoroughly investigated and detailed. This continued development and training includes incentives that work against biased reporting and should, along with investments in technologies, help support the staff to draw appropriate conclusions. The FOS need to update and bring together its policies producing a consistent, strategic and expert approach by all case handlers, but also including senior and middle management.
Obviously, there are legitimate concerns about how quickly the FOS resolves disputes and the quality of the case work, but it must be remembered that this is also a free service to the consumer. The FOS now has the opportunity to rebuild consumer confidence and improve the quality of its work.