"Consumers deserve a simple and highly visible complaints service"
says Financial Services Consumer Panel
10 February 2000
Consumers deserve a simple and highly visible complaints service. The Financial Services Consumer Panel calls for the new single ombudsman to be consumer friendly and have a high public profile. This will ensure consumers are more aware of their right to redress when things go wrong and are helped to make a complaint and have their concerns properly investigated. The Panel was commenting in its response to the joint Consultative Paper on the new single ombudsman service from Financial Services Authority (FSA) and the Financial Ombudsman Service (FOS). The Panel expressed support for the single service and the progress that has been made so far in its creation. However, the Panel made a number of recommendations to ensure that the new service works more effectively for consumers.
The key recommendations are:
- There should be a clear timetable for the new ombudsman to become a one-stop shop for consumers covering all financial services activities of non-authorised firms which are potentially authorisable under the Financial Services and Markets Bill (eg mortgage brokers, insurance intermediaries).
- Mortgage brokers which are not regulated firms should be encouraged to join the ombudsman service voluntarily to ensure those consumers with complaints about mortgages bought from brokers come within the ombudsman’s scope.
- The FSA should review the £100,000 limit on the level of compensation that the ombudsman can award. This was set originally in 1981 and in today’s terms should be more than £200,000.
- The FOS should actively promote its work to improve the current low levels of public awareness of the services it can provide.
- It is vital that there is good co-ordination and co-operation agreed between the FOS and the FSA. This should avoid any duplication but allow consumers to be transferred between helplines. It is also vital that the ombudsman service should provide data on increases in complaints about firms or products to alert the FSA to new or systemic problems.
- The Panel proposes that the ombudsman scheme should make provision for those with learning difficulties or specific needs and have a dedicated access point for consumer advisers.
Barbara Saunders, Chairman of the Financial Services Consumer Panel said:
Ombudsman Schemes have been a great success in protecting consumers and ensuring they get a fair deal through the independent investigation of disputes.
Consumers deserve a one-stop shop to handle their disputes with financial services companies and overcome the confusion caused by the many different arrangements which currently exist. The new scheme will, however, be very large. It must therefore be simple and easily accessible for consumers, with a commitment to inform people of their right to complain and how to do so.
notes for editors
- The Financial Services Consumer Panel has been set up to advise the FSA Board on the interests and concerns of consumers and to report on the FSA's effectiveness in meeting its consumer protection and public awareness statutory objectives. There are eleven members of the Panel representing a broad range of consumer interests. The Panel is independent of the FSA - it can raise its own concerns, initiate its own research and publish its own reports.
- The full text of the Panel's response on compensation and the FSA Consultation Paper 33: 'Consumers complaints and the new single ombudsman scheme' is available from the FSA publications department on 0171 676 3298.
