If you've ever had a complaint with a financial company (and who hasn't?) chances are you'll have come across the Financial Ombudsman Service.
If you feel that you've been mislead or mistreated by a bank, building society or insurer there are steps you can take to get the problem rectified.
But if your grievance isn't resolved directly with the business in question, one route to consider is speaking to the Financial Ombudsman Service who can review the case for free.
We’ve interviewed a Financial Adjudicator who deals with such complaints on a day to day basis to find out how the process works from the inside and to get some valuable advice for anyone who finds themselves with a complaint to make.
What are the differences between the FSA (Financial Services Authority) and the FOS (Financial Ombudsman Service)?
The FSA is the regulator for various banking, insurance and investment companies. It regulates the activities of the actual business itself to ensure that it is being compliant with the rules and regulations. While it has the authority to fine and order a business to change its practises, it does not deal with consumer complaints.
The FOS is an independent complaints resolution service, which deals with complaints from consumers about a regulated business. Consumers can ask for a complaint to be assessed for free; which is obviously more attractive than taking the matter to court and incuring the expense.
Are there any downsides to this?
The service is free to consumer but one should always bear in mind that a complaint will not always be upheld.
How long will it take to resolve a complaint?
The most important thing to note is that the business in question must be given 8 weeks to issue a final response letter to a formal complaint. If the complainant is dissatisfied with the response they receive he or she can then refer the complaint to us for a review.
Depending on the type and complexity of the complaint this can take anything from 3 months to upwards of 2 years.
The normal guidelines are that most complaints should be dealt with inside of 6 months, but some cases can take longer.
Is there a common complaint which people take to the FOS but really shouldn’t?
- Frivolous and vexations claims, with minor gripes
- Blatalantly fraudulent claims
- Personal issues better dealt with in court
Are there many misconceptions about what the service provides?
Yes, the Financial Ombudsman Service is often seen as a consumer champion when in actual fact it’s not - it is purely an independent arbitration service that takes an unbiased view on the evidence that is presented.
It favours neither the consumer nor the business and this is the whole point of the service.
Consumers are also under the misconception that the Financial Ombudsman Service can and should fine and impose sanctions against a business for its failings. However, that is the role of the FSA – as we’ve discussed, that’s the difference between the two organisations, and the distinction is quite a large one.
How effective is the FOS in resolving complaints?
As a free service it is very effective at coming to a conclusion with an emphasis on what is fair and reasonable based upon all the evidence that is presented to us, and removes many of the constraints and costs involved with taking specific legal action.
What advice could you give which could potentially increase the chances of claimant success?
The Financial Ombudsman Service is not allowed to give any advice per se, but it’s basically simple common sense.
Make sure you give statements of fact in your evidence, and not fiction (this is never, ever helpful to your chances, no matter how believable you think your story is).
Also, it’s important to back up your complaint with documentation and recorded calls wherever possible, and present a full timeline of what has happened with names, dates and times.
It is always useful to get into the habit of doing this for any complaint that may end up going further, since people’s recollections fade with time. Without good evidence to back up a claim, it can descend into the realms of one word against another.
What approaches are guaranteed to kill a complaint dead in the water?
The exact opposite of the above, really. Embellishing facts, inconsistencies with statements and recollections, or even as simple as there are no real grounds for bringing a complaint in the first instance - trite and petty reasons such as forgetting to include an envelope etc.
What about complaints about the Financial Ombudsman Service?
Complaints about the Financial Ombudsman Service come in different forms, some from consumers who do not accept the conclusions in a decision, others where a consumer is not happy with the general handling of his or her complaint.
Others come from businesses who dispute the reasoning behind decisions or believe the service is acting outside of its given powers, which can sometimes lead to a judicial review.
The Financial Services Compensation Scheme (FSCS) and what it means to consumers
The FSCS was set up by legislation to essentially compensate people when a regulated business is unable to meet its financial obligations, or has become insolvent/bankrupt and it owes a consumer money. It is a mechanism by which a consumer may be able to retrieve some or even all of his or her losses if such a situation arises.
There are limits to how much can be paid out and also who would be eligible to claim, of course. It is generally up to 100% of £50,000 if you have a valid claim, but it always best to check on the FSCS website as there are other limits that apply in certain circumstances.
What kind of complaints does the ombudsman service review?
The range and scope of the complaints covered is varied, covering a whole host of topics from insurance, banking, investment and pensions. There is a whole plethora of actual cases which can be found on the official Financial Ombudsman Service website.
Whilst these cases can be seen as a general guideline it should be noted that each case will be assessed on its own merits and individual circumstances, by their very nature, will vary.
