Shocking failings at Financial Ombudsman uncovered
- Shocking failings uncovered at Financial Ombudsman.
- Channel 4 Dispatches undercover investigation finds major flaws in Ombudsman operation.
- FOS staff who don’t understand financial products, are pressured to turn down complaints and side with banks or financial providers.
- Urgent action needed to ensure financial customers have proper system of fair redress.
Tonight at 8pm a Channel4 Dispatches programme will show shocking evidence of failings at the Financial Ombudsman Service (FOS).
Members of the public are told to complain to the Ombudsman Service if they are unhappy with financial products or services. This is often the only way they can achieve some redress from banks or other firms who have behaved wrongly. It is vital that they are treated fairly and their complaints are taken seriously.
However, an undercover Channel4 Dispatches reporter joined FOS as a ‘trainee’ in November 2017 and discovered that staff often did not understand the products they were supposed to assess complaints on, were not trained properly to carry out their investigations, were told they had to complete a certain number of cases irrespective of how much paperwork was involved in each one and were encouraged to refuse as many complaints as possible so that they did not pass too many on to the more senior staff.
Such practices are all detrimental to consumers and suggest insufficient care and concern for the stress and distress many people suffer at the hands of financial firms.
Customers who complain often spend huge amounts of time putting together their cases and would be horrified to learn that their efforts can be dismissed by someone who either does not have time to read it all, or does not even understand the products they are complaining about.
It seems that too much attention is being paid to minimising costs of the service and ‘efficiency’ targets for numbers of cases to be dealt with. These targets ignore the complexity and length of each case, obviously incentivising staff to spend too little time on the detailed work that is often needed.
This Dispatches programme should be an important wake-up call to the industry. To restore confidence in financial products and providers, we need to be sure that poor practice and customer complaints are dealt with fairly, so people achieve proper redress. If the Ombudsman Service is so stretched, the public are denied a fair hearing. The industry may need to ensure the FOS has more resources so that its staff deal with complaints thoroughly, rather than being incentivised to cut corners and ignore customers’ problems.
This is vitally important and may be worthy of a more thorough investigation by Parliament, to ensure the public are properly protected in future.
ENDS
10 thoughts on “Shocking failings at Financial Ombudsman uncovered”
Just watched the fascinating Dispatches programme about the Financial Ombudsman and their failure to investigate complaints properly.
My elderly father with diagnosed dementia was the victim of fraud/ financial abuse perpetrated by my brother and his wife and facilitated by a Lloyd’s Bank manager . The FO rejected my complaint and appeal without even investigating the complaint made by me on behalf of my father. The FO claimed that they couldn’t investigate the complaint without first obtaining the consent of the Partners named on the original bank account i.e my incapacitated father, my elderly mother and my brother and his wife ( the two who were perpetrating the fraud ! ) The whole situation was just farcical. The Lloyd’s manager had advanced a loan for £60,000 to my brother in my parents’ names. My father was 88 years old at the time and residing in a nursing home with severe dementia. The loan was then secured on my parents land and property. The bank admitted that my brother had failed to inform them of the dementia diagnosis in 2011 and also failed to inform them of the registered Power of Attorney.
The bank manager also set up a new partnership current account without my father’s name on it so that as an attorney I could not monitor the account and safeguard my father’s interests. Sadly my father passed away in October 2016 and my 85 year old is still being financially abused by my brother as she still lives on the farm. Although she appears to have mental capacity she is totally manipulated by my brother and his advisors and I am powerless to stop it.
Would be glad of any advice on how to protect my mother and do I have any means of getting the FO to act in this fraud case.
I have been highly critical of the FOS for a long time now. I represent victims of bank transfer fraud and these days I don’t even bother to involve the FOS – I take the banks to court instead. There’s a better chance of ‘fairness and neutrality’ that way.
Dear Ros, In response to the last night despatches programme, I would like you to know about my vulnerable nephew who lives alone on a low wage and with learning difficulties!
Back in 2000 he was persuaded to take out HSBC loan to prevent him becoming overdrawn, but was unable to afford repayments!
HSBC then persuaded him to take out a greater loan to repay previous, which again he defaulted on repayments, so again HSBC sold greater loan and this continued until he had taken out FIVE loans in less than three years!!!
1 £2700 loan costing 4276 and made 12 payments £89.10
2 £3000 loan costing £5033 which he made 3 payments £83.90
3 £4500 loan costing £7743 which he made 5 payments £129
4 £6400 loan costing £10750 which he made 10 payments £179
5 £9600 loan costing £15,590 which he made 9 payments £260
After defaulting on loan five he had to take out a Halifax second charge loan secured on his shared ownership home of £20,000 to repay HSBC
The above went to the FOS who stated that HSBC did nothing wrong and complaint NOT upheld!!
Mr G Wallace (on behalf of Mr K Hulse)
I have a complaint with the FOS regarding misconduct by Aviva. Its handling exemplifies all of the problems mentioned in Monday’s Dispatches programme which could have mentioned all sorts of other bad things at the FOS, but didn’t have the time to do so. The FOS is rotten to the core and these problems are not new – they have been there for years – and all public confidence in this failed institution has been lost. The Senior Ombudsman obviously has a big responsibility for all this & should be retired forthwith with a Damehood, which is the recognised practice for rewarding failure in the Civil Service. Tinkering at the edges of the FOS will achieve nothing to rectify all the corrupt assessments currently gathering dust awaiting review, not to mention the half-million flawed assessments of the past. The FOS is so bad that it should be shut-down and replaced by a new body under proper leadership. It’s not good enough for MPs to huff and puff and say “what are you going to do?” – they should have said that three years ago when things started to go really wrong. Much stronger and positive action is required, otherwise the SFO’s fraud upon the public will continue.
I whole heartedly agree with all the points you have raised with the addition of the FOS taking 9 years to administer my case against Coplus
There’s some collusion going on as an incompetent adjudicator overrode 2 barristers opinion which was requested by the first Ombudsman but now won’t enforce this it’s an absolute disgrace and constantly contradicts itself not to mention finding an Ombudsman lying to me
They now refuse to speak to will not enforce the initial legally binding decision and l am statute barred
What are you going to do here Ms Altmann
The FOS fudged a claim made by me re a misrepresented car sale – it was a Section 75 claim against my credit card company. I was left better off by trading in what was bought as a new car and accepting a 50% loss than accept the FOS judgement. The FOS adjudicator knew nothing about the motor industry and accepted everything the card company wanted them to see and totally ignored the law. I am a disabled person and relied upon my car for transport. I now have no car nor even a no-claims insurance discount which lapsed while I was fighting the case. The ombudsman ignored the fact that motor dealer ignored both of the two codes of conduct that they had signed-up to and insisted that a franchised repairer reported the faults with the car (which would have meant that they might lose £000s of business)… Of course the repairer declined to comment…
The adjudicator told me that the judgment was in part due to the decision that ‘the bank had not done anything wrong’ but it was jointly culpable under Section 75 of the Consumer Credit Act – a fact that was ignored. The fact also ignored was that, under any circumstances, the distance selling regulations gave me the right to reject the goods within the time period.
The FOS told me that I had provided them with more evidence than anyone they had ever dealt with and they found that I was sold the goods by misrepresentation yet I still was required to bear a 50% loss to return the goods where the fraudulent dealer could resell the car at that same money and break-even.
The FOS refused to hear or comment on my complaint: a graphic case of the FOS bias and complacency.
Dear Baroness Altman
In my recent experience, the findings (or should I say failures) uncovered by the Channel 4 Dispatches Team with respect to the FOS, also seem prevalent in the airline ombudsman service (ADR/Aviation). They seem to be inexperienced, slow, break promises and would appear to be biased in favour of their paymasters, the airlines when reaching a Determination. The professionalism of the service is questionable as I am still awaiting a promised response to a letter of complaint sent to the Chief Adjudicator on 25 Sept. 2017. I personally think their service should also come under scrutiny and be investigated.
Yours sincerely
John Lutz
Hi
I had a complaint, which was found in my favour (after 2 years investigation). The company concerned refused to accept the findings, the ombudsman refused to enforce it and made me raise a new complaint which they found in line with what the company wanted.
Please advise what can I do to get this revisited by the Ombudsman?
I do not believe FOS failures are due to untrained staff.. FOS decisions are made by highly trained adjudicators and ombudsmen and when they come to an unfair decision wrongly favouring banks and insurers then something is wrong within the service that needs further investigating . I would suggest that C4 and the authorities should dig deeper.
I agree that the FOS needs to be more accountable after having personally received a decision that remains inexplicable and that cannot be challenged except through expensive Judicial Review of the process only.