- 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.