The Financial Ombudsman Service (FOS) may be forced to review thousands of cases after a Channel 4 Dispatches documentary alleged lack of training and understanding of financial products at the watchdog.
The Dispatches programme sent an undercover reporter into the FOS as a trainee investigator. Instructors told her that some staff do not have the knowledge to deal with complex financial problems and alleged that some people had been “thrown in with no training at all.”
The programme also alleges that a visit to the FOS by a member of Parliament, Rushanara Ali, as part of her work on the Treasury Select Committee, was stage managed to make the service look better than it was. Rushanara Ali said that the FOS must demonstrate that it had handled past cases satisfactorily, or members of the public will want to go back and have their cases reviewed.
The Committee’s Chairman, Nicky Morgan MP, is demanding answers. “The Dispatches programme raised concerns about the FOS’s decision-making and governance. These have been echoed by correspondence received by the Committee from current and former FOS employees, who have also expressed dismay about poor culture and low morale.”
The Chief Ombudsman, Caroline Wayman, has come out fighting in the watchdog’s defence. “We feel very strongly that the concerns voiced in the programme do not give a fair impression of the Financial Ombudsman Service when seen against the overall breadth and context of our work,” she said in a letter. The FOS will undertake a review of the concerns raised in the programme, overseen by its non-executive board.
“The FOS was set up to provide a cost effective alternative to litigation to settle disputes between consumers and providers,” said James Burgoyne, Director – Claims & Technical, Brunel Professions. “Its decisions carry weight and are binding on providers, so any allegations of poor training and practice will need to be taken very seriously. If this does lead to decisions being reviewed, there is a risk that advisers and providers may find they have to provide compensation in cases they thought had been settled in their favour. This in turn has implications for the professional indemnity insurance market.”
The documentary aired on Monday 12th March 2018 on Channel 4. The Dispatches programme has issued a press release on its findings. Reports into the allegations have been published by FT Adviser, FP Today and Citywire Wealth Manager. The FOS has published a response to the allegations on its website.
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