MISTAKES and INCOMPETENCE in handling my case
also other info, news and blog about the UK FINANCIAL OMBUDSMAN SERVICE

FOS employees' handbook
Part 1, Part 2, Part 3, Part 4
FOS case handling system training
Part 1 Part 2  Part 3  Part 4 Part 5 Part6
Ombudsman Watchers
Website for problems with other
Ombudsman services
FOS and the Freedom of Information Act,   FOS's own procedure for making an FoIA enquiry
Or better, ask your question on the "What do they know"
website so everyone can see the question asked and response, click here.

Please tell me of your FOS experiences (confidentiality guaranteed)  (though I can't offer advice, or even reply to most...sorry ! )
OVER 140,000 HITS on this website now
...thank you all for your interest in FOS problems, especially those who write to tell me their stories

"I am not prepared to devote additional time and effort towards further elucidation which I am far from confident will meet with either your understanding or acceptance"
replied the FOS negotiator when I said I could not understand him.  More direct quotations from FOS staff  here

This website is moving !
Check out the new version here

(it will take a while to move across fully)

@ombudsman-probs twitter feed
Recent Freedom of Information snippets

NB. Sorry this website is not up to date...moving house...back soon though.

FOS publishes 100 FOI questions (but not the responses) interesting though

FOI request names all FOS job titles Interesting insight into FOS.

New request asks for publication of the FOS consumer satisfaction survey Interesting !   Surveys now published...see links below dated 06 Sep 14

FOS publishes aged debtor report (one firm owes £477k for over 120 days)

List of by FOS as compension for distress and inconvenience

Answer delayed on Manager's staff and sign off limits
Now published Figures are here

FOS answers FOI request to Independent Assessor after internal review

FOS news, information, blog and links

25 May 2015... Interesting alternative view of FOS !
This article appear on the Open Democracy web site

04 Feb 2015... Fascinating Freedom of Information question and response
Details of 100 FOI requests and how FOS responded...(but not the actual response unforunately)
An FOI request made through the "What do they know" website asked for detail of FOI questions numbered 1000 to 1100, whether they were answered or refused and whether the Information Commissioner was involved. The list is available HERE. You may need to scroll down to the date 3rd Feb 2015 and then click the appropriate response to download a spreadsheet with the data...and then change the column widths on the spreadsheet to read it easily. Some info is hidden and can be shown by increasing the depth of the line.
Over half of the requests were not answered in full or part with FOS claiming various exemptions.
Unfortunately many of these questions were asked to FOS direct, rather than via "What do they know". If you have an FOI request, and can make it via "What do they know" then the public can see the response form FOS. Naturally you should not do this if the info is private.
This answer opens up the possibility that someone could ask for the same information for requests 1-99, 100-199 etc etc. until all FOI questions are published. Also interested parties could ask for the actual FOI response to be published. No doubt FOS would claim exemption, but many of the answers must surely not contain personal information. Note that FOS can refuse to answer FOI questions that would take too much time to deal with.
FOS has a huge website, full of useful information including many FOS decisions...it is surprising (or is it ?) that they do not publish FOI requests and answers.
Answer referred to in the question
What do they know website FOS section

07 Jan 2015... Natalie Ceeney returns to the public sector after a year at HSBC
Ms Ceeney, the last FOS Chief Executive, who left the organisation suddenly in December 2013 and moved to HSBC as Head of Customer Standards. Now she has moved on again after around a year to be Chief Executive at HM Courts and Tribunals Service. No reasons have been given for either move. The latest move was announced in Nov 2014 but the appointment commenced 5th Jan 2015.
Money Marketing
MoJ and Courts and Tribunals Service

27 Oct 14... Another excellent article from Lexology...this time about recent FOS judicial reviews
Lexology has published another article, written by solicitors, covering aspects of the FOS and how it works. This time they cover two recent judicial reviews. Many ordinary complainants think a JR is a further avenue to complaint about their decision, but this is not quite what happens.
Lexology article on recent JRs
Lexology briefing on common FOS issues and problems

20 Nov 14...
Tony Boorman joins Peer to Peer Finance Association as a director
Mr Boorman ran the FOS for some time after the departure of Natalie Ceeney. His name disappeared from FOS management lists soon afterward Caroline Wayman was appointed as the Chief Executive. Ms Wayman worked at FOS in a senior role below Mr Boorman. Now he has joined P2PFA.
Details in Money Marketing
Peer to peer finance association

13 Nov 14... DYNAMITE...!!!
Ombudsman rules that lender can raise tracker mortgage rate without a Bank Rate rise
West Brom has raised the tracker mortgage rate for certain borrowers using a small print clause which was not in the "key facts" document. FOS says this is OK !
My prediction.....this one should run and run ! The main issue may be whether such clauses hidden in the small print are actually valid, or defensible in court. A class action is to continue.
Read more in The Telegraph
Class action not deterred by FOS decision (Mortage Solutions)

11 Nov 14... Survey results reveal ongoing adviser mistrust of FOS
A recent survey among financial advisers reveals concern about the FOS and its adjudicators and indeed the Ombudsman "itself". The survey confirms the long held view of many that FOS staff are not properly qualified to rule on financial matters.
"Only 7% of advisers believe the adjudicators and the Ombudsman itself has a solid understanding of the issues they adjudicate on, while 93% believe individual adjudicators should have, at the very least, both relevant experience and minimum industry qualifications in order to be able to preside over cases".
Read more here

07 Nov 14... FOS publishes Consumer Consultant Employment Contract
As a result of an FOI request FOS at first avoided publishing this document, but after this was challenged and after an internal review, the contract was published. The letter accompanying the document is loaded with copyright warnings etc etc. about publishing this document, although I could not see anything very special in it...anyway, I refer readers to the "What do they know website", where the contract is published. Difficult to understand all the concern about publishing the contract...then sending a copy to an internet site for publication...???
What do they know website, FOS Consumer Consultant Contract

07 Nov 14... Ex FOS boss Walter Merricks takes a new job
Mr Merricks is to be Chair of IMPRESS, which, according to LinkedIn, aims "to support the integrity and freedom of the press while encouraging the highest ethical standards in journalism". Mr Merricks' public LinkedIn page also list his other jobs...He is going to be busy...other jobs as at 07 Nov 2014 include
Commissioner, Gambling Commission
Trustee Chair, Academy of Medical Royal Colleges
Service Complaint Adjudicator, Legal Ombudsman
Board Member, Ombudsman Services Ltd
Chair, Donor Conception Network

Cant find an IMPRESS website but much more interesting is this sideways look at press regulation....
Press regulation, where are we now, by Walter Snoddy in Newsline. According to this, Mr Merricks workload at IMPRESS may not be high.
Mr Merricks' LinkedIn page
Guardian Blog

07 Nov 14... Thinking of taking your complaint to FOS ?
Read this FT article telling financial firms how to "secure a positive result with FOS"
Read how the other side goes about it !
Read the full article here

07 Nov 14... FOS gets a slating on Daily Mail This is Money website
"It is disheartening to see just how long it takes to get a superficial and flawed ruling from an official who failed to understand the issues"
Read the full saga here

31 Oct 14... FOS loses at Judicial Review. Judge finds FOS was wrong to consider a case which was outside it's jurisdiction
This issue revolves around whether FOS had the authority to consider a case, depending on whether the claimant was a consumer or not. It's complicated but there are several internet articles on the matter which may help understand what happened, and the full judgement is available on Bailii. This is important and may affect how FOS views certain insurance cases in the future. FOS rarely loses at JR, its remit is so wide its virtually impossible to show they were wrong, however in a different case a threat of JR recently caused FOS to withdraw a decision...see below links on 22 Oct.
Full Judgement by Mr Justice Wilkie ( Bailii)
Insurance Age (brief)
Mondaq.com (longer article)
RPC.co.uk (detailed .pdf)

22 Oct 14... FOS publishes list of all job titles
I can't find a post called "Manager...Job Titles", but pretty well every other possibility is named. Actually its an interesting slant on how FOS sees itself.
FOI request publishes FOS job titles

22 Oct 14... Excellent article about the ups and downs of FOS methods and decisions...essential reading
Lexology has published an excellent briefing on some of the issues involved with going to the FOS to resolve a dispute.
"This month’s briefing provides a reminder of the FOS’s complaints handling procedure, highlighting the rules in relation to timings, costs and the reasoning used by the FOS to determine claims; reviews the recent significant case of Clark v In Focus Asset Management; and considers the difficulty of challenging a FOS decision."
Lexology FOS briefing

22 Oct 14... FOS Independent Assessor receives award
Amerdeep Somal (FOS Independent Assessor) who has been described as a "leading force for social justice" has been named as Nottingham Trent University's alumna of the year. She
has received the award in recognition of her dedication to helping vulnerable people.
Nottingham Post story

22 Oct 14... Interview with FOS Chief Executive, Caroline Wayman, in The Mail
This has some interesting background and personal details about the new FOS chief.
Interview in The Mail

22 Oct 14... FOS publish Ombudsman and Consumer consultant contract details
Two recent FOI requests were made to publish these contracts. FOS did not give the details requested and the decisions were internally reviewed. This resulted in the information being published. Nothing suprising.
Ombudsman contract
Consumer consultant contract

22 Oct 14... UPDATE FOS landmark U-turn opens a can of worms. Hugely interesting and important issue
In an unheard of change of policy, FOS reviews a ‘final’ decision. A recent dramatic decision by the Financial Ombudsman Service to reverse a landmark final ruling and reconsider the case could open a legal can of worms over whether or not it has the authority to enforce a revised decision. Apparently this decision was published on the FOS website...then pulled ! FOS normally steadfastly holds to its mantra that the FOS decision is final and binding if a claimant "accepts" it.
An excellent summary of the position is available from Lexology, see link below. It seems FOS was threatened with a Judicial Review of the decision in which FOS found a SIPP provider should have reviewed the suitability of an investment, even though it was not authorised to offer advice. It seems the Pensions Ombudsman took a different view on similar issues in the past.
FT Adviser has the story
Lexology's excellent summary

06 Oct 14... The FCA is to revisit the issue of a 15-year long-stop on litigation against advisers
This issue drags on

06 Oct 14... Consumer action group website publishes a long letter about...
Many of the common complaints and problems with FOS are in the letter.  Worth a look
CAG website, FOS section

06 Sep 14... FOS publishes the questions asked in it's consumer surveys
Responding to an FOI request FOS have published the questions asked of consumers (people who asked FOS to rule on their disputes). As well as seeking views about the FOS service, these questionnaires also seek quite a lot of personal information (like health conditions) about the consumers.

Some of the questions are hopelessly wide ranging, for instance, the following is ONE question.

How do you feel about...
...the length of time it took us to deal with your complaint?
...the knowledge of the staff who looked into your complaint?
...our understanding of your complaint?
...our reliability in doing what we said we would do?
...how easy it was to get in touch with the person dealing with your complaint?
...the interest shown in your individual complaint?
If you feel strongly about any of the above, please tell us a bit more

For this question the consumer can select from the following answers.
...Very satisfied
...Neither satisfied or dissatisfied
...Very dissatisfied

There seems to be no consideration of the possibility that the consumer may be satisfied with one part and dis-satisfied with another...For some reason FOS avoids publishing the full questionnaire itself, so there may be a box for further explanations, but I would have though each line of this question deserves to be an individual question in it's own right.

FOS also ask several personal questions about the consumers'...
...Employment status (specifying, if retired tell us what you used to do...(maybe 30 years earlier ?)
...Disability (with a list of 12 conditions to choose from)
...Ethnicity (7 choices)
...Sexuality (6 choices)
...Religion (7 choices)
No doubt FOS have good reasons for these personal enquiries but it's difficult to see what difference it makes to FOS whether a consumer has diabetes or breathing difficulties ? The consumer can decline to give the information requested.

Questions asked:
after adjudicator's view
after ombudsman's decision
in a postal survey

25 Aug 14... FOS advertise for new Non-Executive Director and Chair of the Audit Committee
Read about this here
Job advert

25 Aug 14... The financial ombudsman has rejected an investor's complaint against HSBC even though the bank charged him £9,000 for a pension.
Citiwire story

22 Aug 14... It may be possible to sue a firm even after an FOS ruling
It appears that the legal decision that claimants cannot accept a decision by FOS then sue for further redress does not apply to Adjudicators' rulings, but only to "decisions" made by Ombudsmen.
Read the story in Money Marketing and here

15 Aug 14... FOS Facebook page, with reviews of the service by the public
Surely this Facebook review page must give FOS food for thought. When I looked there were ony 83 reviews, but 37 of them were very critical. I suppose it's a small sample and people aggrieved may comment more than those satisfied but... There are links to FOS's other facebook pages of course, including a very eclectic selection of photographs.
FOS Facebook reviews page      photos page

15 Aug 14... Very critical comment on FOS from Alan Lakey
Alan Lakey is an IFA and long time critic of FOS. This outspoken article is written from an IFA's perspective, but consumers who have had trouble with FOS decisions will see much they recognise. The comments below the article are of interest too, especially an alleged quote from Walter Merricks the first Chief Ombudsman. IFAs may be interested to know that Mr Lakey intends to offer advice on FOS matters through the Panacea website.
Read the full article
FT adviser on the new advice site for IFA's

06 Aug 14... Ombudsman David Thomas to be chairman of Guernsey and Jersey Financial Ombudsman Service
David Thomas has had a long career at FOS, and ran the shop after Walter Merricks resigned. He is on the board of the UK Legal Ombudsman service and has advised many counties on FOS related matters. £24,000 pa for 2 days a week. His name still appears on the FOS list of Ombudsmen.
States of Jersey official notification

05 Aug 14... FOS publishes case handling system training documents. A fascinating, if rather lengthy, look at how FOS actually handles cases, including how all decisions and documents are created and dispatched.
This information was published in an FOI request. The documents are contained in 5 separate email responses.
It's not an easy read but it does give an insight into the decision making process. A useful primer for job applicants who want to know how FOS works
The FOI request on the "What do they know" website, including the 6separate responses and documents
Individual documents are here Part 1 Part 2  Part 3  Part 4 Part 5 Part 6

04 Aug 14... How FOS responded to an FOI request made to the Independent Assessor
21 Mar Request made for information about companies/IFAs making service complaints. The request was addressed to the Independent Assessor by name and referred to complaints made to the IA herself.

25 Mar FOS intercept request, stating that IA is an employee of FOS and they will answer as though the request was made to FOS. Response promised by 18 Apr.
7 Apr Response delayed til 22 April (FOS forgot public holidays)
22 Apr Response sent, declining to provide information requested, (FOS says publishing names of firms not permitted)
19 Jun Questioner points out that FOS already publishes firms' names on its own website and repeats his request
23 Jun Rather than just giving the information, FOS takes this as a request for an internal review, though no such review was requested, response promised by 18 Jul
18 Jul FOS delays response til 25th Jul (no reason given)
25 Jul FOS delays response further to 1st August (no reason given)
1st Aug FOS provides (some of) the information requested...in confusing format
6th Aug Questioner ask for the information to be re-formatted
Link to the actual request and responses

Questions raised by this:
1. The Independent Assessor is supposed to be independent of FOS. When I asked, she told me that she was subject to the FOI act and FOI questions should be directed to her. How can she be independent if she allows FOS to answer questions directed to her ? The Information Rights Officer is not the same as the Independent Assessor and may have a very different view.
2. Why are so many FOS FOI requests delayed ? The FOI places a requirement to reply to requests promptly and in any case within 20 days. A glance through the "What do they know website" FOS section shows many cases are delayed. Link to page listing many delayed responses

29 Jul ... New role for Tony Boorman ? Changes at the top...new names...new job titles...new boss !
Mr Boorman's name has disappeared from the FOS Executive Team website. I cant find it anywhere else on the FOS important people screens. Has he moved on ?
The senior management team has had a shake up. Presumably the result of the new chief executive wishing to make her mark.
Youtube video of Ms Wayman the new chief exec. explaining about how some people can't pronounce "ombudsman" (apparently).  Rather different style to Natalie !

24 Jul ... FOS publishes Senior Managers' budgetary approval limits
Figures are here...not the most helpful format. FOI request. Surprisingly low figures. New Chief Executive's limit was £500 in her previous job.

24 Jul ... Interesting FOS decision. SIPP goes wrong...Firm argues it was not authorised to give advice...
client signed up to this...FOS gets involved...Client wins...fair and reasonable ?...Interesting !
Write up in Money Marketing One writer leaves comment arguing this has far reaching implications for Financial Advice Firms.
The FT's view
The published FOS decision

24 Jul ... FOS chooses in-house applicant as new Chief Executive
Caroline Wayman, who has been with FOS since 2000 has been appointed Chief Ombudsman and Chief Executive. Tony Boorman's name no longer visible.
Youtube video of Ms Wayman
FOS website and picture

23 Jul ... FOI request response delayed twice...nearly 2 months now and no response
A question asking about the numbers of FOS managers' personal assistants and their cash sign off limit seems to be causing difficulty at FOS.
Read the question here...and the answer (now arrived).

23 Jul ... BBC article on FOS...a month old... but has a picture of staff in action !
BBC article link  Note the placard saying "We do the right thing" !

22 Jul 2014 ... FOS Managers handled 2609 complaints between July 2011 and June 2014.  610 were awarded cash compensation payments for distress and inconvenience caused by FOS.
This information has been published by FOS as a result of an FOI request. The reply lists the amounts awarded. The lowest is £5, the highest is £1267.47
The "What do they know website"
The list of compensation figures in HTML format (XLS format is available from the website link above)

17 Jul 2014 ... FCA consultation on 15yr limitation for complaints to FOS is delayed due EU problems
Also see previous article on this page dated 25 June 2014.
Read Solicitor Clair Williams review of the situation here
Read about the reasons for the delay here
Money Marketing

15 Jul 2014 ... FCA defends 'inconsistent' FOS decision making
"In a guidance consultation on investment distribution models, it said it "should not be seen as surprising" that the Ombudsman reaches different decision on complaints which share surface similarities." Hmmm...Why does FOS need FCA to answer for it ? These are separate organisations.
Read the story here (The comments are interesting)

12 Jul 2014 ... FOS publishes aged debtor report
This document has been published as a result of an FOI request. Some of the debtors owe quite a lot of money and have done so for 120 days. One Insurance company owes over £477,000. No details or explanation is provided of what these figures actually represent. The report is also accessible as an excel spreadsheet from a link on the report page.

11 Jul 2014 ... "FOS Executive pay up 20%, Chief takes home £293k"

This article from Citywire sums up some surprising pay related snippets from the 2013-14 FOS Annual Report and mentions the amount paid to the last Chief Executive in lieu of notice (£51,924). The full figures are in the FOS Annual Report.
FOS official 2013-14 Annual Report and Accounts
  This report also contains the latest Independent Assessor's report, starting on page 89...Business as usual.
FOS official 2013-14 Annual Review

27 Jun 2014 ... FOS accused of ignoring adviser evidence in rulings
"Responding to a survey carried out by the [APFA] trade body, 34 per cent of advisers that have had a complaint referred to the FOS said the ruling did not take their evidence into account".    Some 8 per cent of advisers also reported the reasoning for a ruling was not always provided while around one in five said a complaint against them had been referred to the FOS in the last three years.
Article in Money Marketing

27 Jun 2014 ... New EU rules may allow 1 year to complain to FOS, not 6 months as now
Won't make life any easier for FOS as all evidence will be older.
Article in Money Marketing

25 Jun 2014 ... FCA allows some flexibility on 15 year limitation rule
"The Financial Conduct Authority has backed down by allowing an adviser to refer to an effective long-stop defence in his client contracts, following a meeting held this month that brings to an end a five-year battle with the regulator"
Interesting article in FT Adviser

25 Jun 2014 ... FOS argues that advised clients cannot be "sophisticated"
Interesting article in FT Adviser

02 Jun 2014 ... Some interesting responses to FOI requests

An increasing number of FOI requests are being routed through the excellent "What do they know" website, which allows the public to see what concerns ordinary people about FOS, the questions they ask, and most importantly, the answers received from FOS. There seems to be an increase in the number of FOI requests made through the site. The site allows you to "follow" requests to see what happens, they will email you when a response is received.

Here are some recent items, with links to the actual request:

FOS employees' handbook
FOS have published this document in full with some redactions as a response to a question about whistleblowing.
Essential reading for FOS watchers. It is in 4 separate files.
FOS Employees handook, Part 1
FOS Employees handook, Part 2
FOS Employees handook, Part 3
FOS Employees handook, Part 4

How many people have FOS been required to provide ID when making an SAR ?
(An SAR is a Subject Access Request to FOS to provide all info which FOS holds about you...cost £10).
It seems that 205 people made such requests last year, but in the questioner has now asked how many of the 205 were required by FOS to provide ID. This may arise from the FOS requirement that certain individuals produce ID before they will answer their FOI question. FOS are avoiding answering some FOIs on the basis that the question is vexatious and part of a campaign to simply cause disruption and annoyance. In a few of such cases FOS have asked the writer to provide ID.
I'm not sure what this is really all about but its interesting. There is some reference to similar issues in the next example, where the writer points out that in the past FOS have wrongly declined to publish case documents unless an SAR is made.

A request for an internal review of FOS's refusal to provide the information used to reject a complaint
FOS apparently refused to provide the information required on the basis that it would identity an individual (even though the individual was the person making the request !) The requester says that the Independent Assessor and a Senior Manager's team says the information does not exist (so presumably can't identify anyone). The answer could be interesting. Complainants are entitled to see the evidence used to reach a decision.

Details of the amount spent on FOS corporate credit cards reveals that one card was used for £98,325.43
It seems the amounts spent on the FOS's 36 corporate cards varies between £28.00 and £98,325.43
There is no comment on who spent £98k on his or her corporate account or what the expenditure was.

Independent Assessor's terms of reference changes
A request for meeting minutes, reports, recommendation and document control logs resulting in the change of[the Independent Assessor's terms of reference by the board.
This is interesting. The Independent Assessor is independent of the FOS and she told me that she is subject to the FOI Act and that FOI questions should be directed to her direct. Despite this, it seems that this request (addressed to the Independent Assessor by her name (Ms Somal)) is actually being handled by the FOS Information Rights Officer. Furthermore they are unable to meet the FOI time limits and the answer has been twice delayed.

31 Jan 2014... STOP PRESS !!!

International Business Times has the story, along with a list of other controversiol financial job changes...interesting

29 Nov 2013 ... Interesting story about how FOS handles some complaints about stockbrokers

"The best outcome for unhappy clients of stockbrokers seems to be a small goodwill payment of between £50 and £100"

Story in Investors Chronicle

25 Nov 2013 ... FOS asked to publish all opinions and recommendations issued by the Independent Assessor in June 2012

Well...I wonder what will come of this !
I suspect that FOS will find a way to avoid publishing.

A better route might be for the questioner to ask the Independent Assessor directly. The new IA ( Ms Amerdeep Somal) has written to me confirming that she IS indeed subject to the FOI Act and that requests for information should be made direct to her.

The actual question on the excellent "What do they know " website
Independent Assessor's own website with her email address

21 Nov 2013 ... Embarrassing climbdown by FOS over FOI request

A questioner asked FOS:
“Please send the public PGP key used by service staff contactable at the email
address on page http://www.fos.org.uk/consumer/complaints.htm

FOS declined on the basis that the website quoted was not affiliated to FOS !

The questioner asked for an internal review and it seems the website is affiliated to FOS, though it can't apparently be seen from FOS's internal systems ! This is strange one...can FOS staff really not access their own website ? There must be a reason ? Anyway the information requested has now been provided.

Full saga, questions, responses and the PGP key are available on the "What do they know" website for FOI requests


15 Nov 2013 ... Natalie Ceeney stepping down as Chief Executive of FOS...Tony Boorman takes over for now

There are many reports of this on the internet, but all seem to be basically a re-hash of the FOS published statement. No news really on the reason for her departure, but I do remember an interview Natalie did (perhaps before arriving at FOS) where she mentioned that she seemed to get bored after 3-4 years and found herself looking at the Sunday Times appointments pages. She has certainly left the FOS a very different place from when she arrived ! It appears she has already gone and is using up accrued leave !  

Walter Merricks the first Chief Ombudsman also left unexpectedly after about 9 years and Operations director Simon Rouse also left suddenly 2 years ago. Mr Boorman is a long term senior manager of 13 years standing at FOS. His job title was changed not long ago to make him Deputy Chief Ombudsman and Deputy Chief Executive. He could easily replace Natalie at the top, it will be interesting to see what happens.

FOS board announces Natalie's departure

14 Nov 2013 ... FOS staff write to MPs with details of the number and type of complaints from their individual constituencies

It looks as though FOS routinely writes to MPs with information related to complaints from their constituencies. The link below shows one such letter to Graham Jones MP. FOS offers statistics, advertises its services and offers to attend events at the MP's constituency or at Westminster.

Letter from FOS to an Graham Jones MP

14 Nov 2013 ... FOS has launched a £200,000 “external review” of its future role in the financial services sector.

Read about this in MoneyMarketing

14 Nov 2013 ... Latest FOS board minutes available

Matters under discussion included (amongst many other things) the plans for the next external review, the next board evaluation, and the FCA and Ombudsman Board dinner.

Latest board minutes (Sep 13)

13 Nov 2013 ... Independent Assessor's reply to a complaint is published by an FOI questioner.

The responses of the Independent Assessor are usually not published, but the recipient has quoted his reply in this case. Gives an indication of how the (new) IA goes about her duties.

This is mostly about the FOS's refusal, to respond by email in this particular case and what took place.

FOI question containing the IA's response text
FOI "what do they know website" FOS section

13 Nov 2013 ... Freedom of Information question asks for publication of Independent Assessor's monthly recommendations to FOS Team Managers

This should be interesting...

I predict FOS will decline to provide the information on the grounds that it will inhibit the free and frank provision of advice. FOS declined to provide the reports of the IA to the quality committee in the past.

The question was asked on the "What do they know" website, so the response should all be public, though FOS do sometime prefer to reply by post, see article above.

Latest FOI question
Earlier FOI answer refusing to publish
FOI "what do they know website" FOS section
IA's confirmation that her advice is given to team managers monthly

5 Nov 2013 ... Court Appeal case to decide the limits on FOS redress boundaries and subsequent court cases

A Court of Appeal judgment expected in the coming weeks will settle the question of whether a complainant can accept an award from the Financial Ombudsman Service and pursue a firm in court for additional redress over the same complaint.

Interestingly, the financial firm concerned has settled its row with the complainant out of court, but continues with the appeal as a matter of principle.

Quite a lot rests on this. FOS cases are decised on the basis of what is "fair and reasonable" and no appeals are allowed against Ombudsmen's decisions. If complainants can take their cases to law, an examination under legal rules of the ombudsman's decision can occur and some (unappealable) FOS decisions may be found wanting.

Full story with case details, Money Marketing article
Citiwire view

24 Oct 2013 ... Australian advisers complain about the Australian FOS

  • Complaints are at no cost to consumers, but firms have to pay even if they win their case.
  • FOS assists complainants to make their case, but not firms and the latter had no avenue of appeal, even in the event where there was a clear error made in the judgement of a case.
  • The AFA also questioned the level of claims which could be settled by FOS, claiming the limit was well beyond the compensation powers of magistrates. This limit was an important factor given that FOS was not bound by any legal rule of evidence, with the AFA stating it had "taken FOS cases into a space where the industry now questions the level of equity and procedural fairness".


Full story in (Aussie) Money Management

24 Oct 2013 ... FOS upholds 93% of Keydata cases against advisers

Full story in MoneyMarketing

24 Oct 2013 ... Adviser slams FOS over PPI complaint handling

Full story in FT Adviser

27 Sep 2013 ... UPDATE Row brewing over the 15 year longstop on bringing complaints

The FCA has told an adviser to remove references to the 15 year longstop which prevents a client bringing a complaint to court after more than 15 years. FOS does not recognise this rule, though the Courts do, and its been a subject of ill feeling between IFAs and the FOS for a long time. Now an IFA has been told by the FCA to remove reference to this from his documents, and the IFA objects. It appears a controversial conversation on the subject between the IFA and FCA has been taped and is to be published. The two links below are of interest.

Of course there is an e-petition calling for "the introduction of fair liability for financial advice, by removing the subordinate legislation of the FCA rules which permits the Ombudsman to consider a claim without any long-stop restriction and applying the Limitation Act 1980"

FT Adviser tells the story...make sure you read the comments on page 2
The website where the conversation is to be published
The e-petition on liability

20 Sep 2013 ...
FOS may be in trouble with "formulaic" awards

Sometimes, when FOS finds in favour of a complainant, they make a formulaic award. This means they don't tell the financial firm to pay a specific sum of redress, but instead give them a formula or process to follow which will result in redress being calculated by the parties and then paid. The long term (past) Independent Assessor, Michael Barnes, warned of the problems associated with this several times in his end-of-year reports, but FOS seem to have paid little attention.

FOS reluctant to act
I have now heard that this policy may land FOS in trouble. Rumours reach me of a case where a formulaic award has been made, but the financial firm has avoided paying the reward by adopting a different interpretation of the procedure to be followed. This has gone on for a year. In exasperation the complainant has asked FOS to endorse the legal enforcement of the award to enable it to be enforced by Court. But FOS seems reluctant to do so and, despite numerous requests to confirm that this specific decision can be legally enforced, FOS has failed to provide this confirmation.

Decision may be unenforcable
Why? Well, it appears this Decision cannot be enforced by a Court because, without a specified award and no specified conclusion date, there a nothing that a Court can enforce. So if it can't be enforced, this FOS award was never fit for purpose. The FOS has delayed for months over this case, which has involved the complainant's MP, a very senior ombudsmen, the independent assessor and Chief Ombudsman, Natalie Ceeney herself.

The FOS was set up by Parliament to be an impartial arbiter/mediator to resolve disputes between consumers and financial businesses. Yet how can it achieve this if it issues decisions that cannot be enforced.

The case continues ! More info in due course.

19 Sep 2013 ... New adviser qualification to deal with PPI complaints

The IFS has launched an updated version of its Level-3 Certificate in Regulated Complaints Handling. The qualification is designed for those who have responsibility for regulated complaints handling in retail financial services. Whether FOS PPI adjudicators will be required to hold this qualification is not mentioned

Full story and details from MoneyMarketing
Similar story from FT Adviser

19 Sep 2013... Gov’t urged to reform FOS with introduction of tribunal
At a debate at Portculis House called by Nic Dakin MP, Labour MP for Scunthorpe, City barrister Peter Hamilton of London-based law firm Pump Court chambers submitted a paper proposing radical reform of the service that would see Fos forced to submit to a legally-binding tribunal when handling complaints.

Mr Hamilton said: “The FOS is in need of structural reform, and is in contravention of the European Convention of Human Rights.”

Full Story in FT Adviser

05 Sep 2013... FOS publishes complaints data figures by named individual businesses.
The listings can by sorted by the various headings...interesting !

Complaints by individual businesses

31 Aug 2013 ... Consumer protection comes at too high a price. Throwing money at consumer protection might not be the answer to recent scandals.

This is an interesting article in The Telegraph, by Richard Dyson, questions whether the host of expensive Ombudsmen services in the UK is really necessary.

Article in The Telegraph

28 Aug 2013 ...Update FOS still recruiting a stream of highly paid senior executives (with complicated job titles)

The FOS is seeking or has recently recruited:
Senior policy manager - stakeholder management  £85k
Senior policy manager – public policy   £85k
Chief of staff    £90-100k
HR business partner (senior/lead) £50k
Head of casework teams £60k
Business change project manager £70k

Head of risk and governance £60k
Head of internal business change consultancy £85k
Head of customer experience £80-£90k
Customer experience research manager £58k

Head of market affairs policy £85k
Head of public policy £85k
IT project manager £55k

All plus a flexible benefits plan, medical insurance, pension scheme, training and development, childcare package, dental package, holiday package.

FOS careers web page

24 Aug 2013 ... "Myth busting" FOS Chief Ombudsman says forcing adjudicators to gain financial qualifications would quadruple FOS case fees

This is an interesting comment from Natalie in an article in MoneyMarketing aimed at IFA's it covers a number of areas and does some "myth busting"

She says "staff receive training in certain products but can’t be expected to have financial qualifications alongside judging skills".
“There is also utterly no way on earth I could hire 1,000 staff with financial qualifications this year on the salaries I’m paying, zero chance. If the industry wanted all my staff to be as qualified as ombudsmen the case [fee] wouldn’t be £550 it would be £2,000 ".

Natalie's comments have drawn 25 (mostly from financial professionals) responses which are well worth a read, including one which points out that Sir Anthony Holland, already a highly qualified and respected lawyer, took it upon himself to pass the FPC [Financial Planning Certificate] when he became chief PIA Ombudsman [Personal Investment Authority, an FOS predecessor].
MoneyMarketing website with the article
More comments on MortgageIntroducer website

In November 2012, Natalie appeared in front of the Parliamentary Select Committee and members asked about adjudicator qualifications. Natalie did not emphasise the high expense involved in providing financial qualifications.
Video of the entire parliamentary meeting (if not visible...select "silverlight" at the bottom). The questions about qualifications start at about 10.02.
Uncorrected transcript of the Treasury Committee meeting (Q27 to Q34 cover the "qualifications" questions)

16 Aug 2013 ... FOS Chief Ombudsman takes 8% pay rise...up to £256,064.

There are lots of comments about the generous pay rise for Natalie and the rest of the board. Details are in the Annual Report page 55. One interesting point is that the Deputy Chief Executive appears to earn more than the Chief Executive at £262,503 as he has had the use of a docklands flat, leased by FOS.

FOS Annual Report 2012-13
Comments in Citiwire
Comments in Mortgage Strategy
Pay increases for executive board at FOS, FT Adviser

18 Jul 2013 ... FOS publishes 7 decisions on real life "attitude to risk" rulings

The Financial Ombudsman Service (FOS) has made public seven of its decisions - and how it arrived at them - following complaints from consumers who claimed they were recommended an investment product that carried a level of risk inappropriate for them.

Full story and rulings on IFAOnline website
Story in MoneyMarketing
FOS's own website publication of these cases

18 Jul 2013 ... FTadviser calls for a comprehensive select committee review of how FOS operates

The Financial Ombudsman Service is once again in the spotlight and it has become a running farce: long delays in sorting out simple problems; treating the high street banks with kid gloves, while using a sledgehammer to smash financial advisers for the slightest failure to tick a box.

Full story in FT Adviser

15 Jul 2013 ... UPDATE The FOS system for publishing some of its decisions is now up and running, but does it tell the full story ?

The FOS online technical resource page has a new link to "Ombudsman decisions". It's in the top section "General approach". This takes you to a new website http://www.ombudsman-decisions.org.uk/ . It's all rather hidden away in the depths of the (huge) FOS website.

There are not many decisions available. The database covers a period beginning 1/4/2013. So in the 3 months to mid July 2013 I would have expected the ombudsmen team to issue about 6000 decisions (the ombudsmen handled 24,000 handled last year). There were only 1253 decisions when I checked on 15/7/2013, so the data is seriously incomplete. No hint is given regarding how cases are selected for publication, but I do note that only about 25% of the cases are upheld. This is not the proportion stated by FOS for the year 2012/13 in its Annual Review (page 78) where 49% are upheld so the selection does not seem to be typical.

I have not checked the cases very carefully, and I may well misunderstand what is going on, but it does seem to me that the data may not be complete or even typical of a 3 month period of normal FOS business. It may be that FOS has more cases to add.

No adjudicators' decisions so 89% of FOS work is ignored
Of course only OMBUDSMAN decisions are eligible to be published. In fact about 89% of cases are settled by ADJUDICATORS (Case handlers) so publishing only the Ombudsmen's decisions means that the real workload of FOS is ignored and the figures and cases published are not typical of what really happens at the FOS.

The actual published cases seem comprehensively explained though, so you can see the thinking behind the decisions. (but remember these are the FOS's top cadre of decision makers, the ombudsmen, and 89% of cases are settled by junior staff so don't appear in these listings). You can search the database to filter the results by a particular Ombudsman or other keywords, names, firms etc.

What the industry thinks...
FT Adviser considers some of the published cases


FOS annual review 2012-13

15 Jul 2013 ... FOS feels the need to add the words (case handlers) to the job title "adjudicators" on its career pages

FOS has added the words "case handlers" to its careers web page to explain what an adjudicator does. There must be a reason.

I note also that all jobs on the careers page are now fixed term contracts from 1 to 3 years, including ombudsmen and some mid-level managerial posts.

FOS careers web page

15 Jul 2013 ... The cosy ex-regulators club... interesting reading about the corridors of power

This article appeared a few days ago about the cosy relationships among those who have been regulators, it mentions that Walter Merricks, once Chief Financial Ombudsman said that people often joined the FOS to add that name to their CV.

More recently Sir Christopher Kelly, ex FOS Chairman, has been appointed to look into the Co-operative Bank mess.

Even relationships within the ombudsman world are close. I notice that David Thomas, a Lead Ombudsman at FOS is also Board Member at the Legal Ombudsman and Walter Merricks, who was Chief Ombudsman at FOS for 10 years is now Service Complaint Adjudicator at the Legal Ombudsman and also a board member of "Ombudsman Services" which handles complaints about communications, energy, property, and copyright licensing.

UPDATE: Aug 2013
Mr Merricks is also The British Copyright Council's Independent Code Reviewer.

The ex-regulators club, full story on fundweb

02 Jul 2013 ... Firm offers £22k, reduces it to £3.5k, FOS accepts this change, but £22k eventually paid after The Mail intervenes   UPDATE

The Daily Mail recently published an article telling what happened when Barclaycard made an offer of £22,000 to settle a PPI complaint. Due to delays at Barclaycard and FOS, the offer took 11 months to reach him. Barclaycard then dropped the offer to £3500 and FOS just went along with it. The case has been reviewed by a QC who described it as a story of "shocking incompetence" by FOS.

This story raised the issue of whether the FOS can be sued, but the service is protected from pretty well all criticism or legal action. Ombudsmens' decisions are not appealable and the only recourse is generally by judicial review which most people can't afford. Even if action is taken the ombudsman's remit of "fair and reasonable" is so wide ranging that it's difficult to challenge. Its just not possible to challenge FOS, but there are other ways to proceed...The Press !!!

In the end it seems that The Mail intervened and asked Barclaycard to explain their calculations. Faced with this Barclayard decided (rather than explain) to offer the original £22,000 as an act of good faith. Presumably the FOS decision on this case, with an explanation for their position on the changes of offer will be published when the service commences publishing decisions soon. Should be worth reading.

Full story in Mail online
Final article in the Mail online

25 Jun 2013 ...
Formulaic decisions, still a cause of problems with FOS decisions

I have just heard from a reader whose case has taken over 4 years and is still not settled. The ombudsman issued a binding decision but the firm has not paid up and FOS have done little to help. The ombudsman's decision was formulaic...ie it did not specify a sum, but gave instructions on how to calculate the redress. This system allows much wriggle room by a firm anxious to avoid paying up. FOS can "enforce" its decisions, but has not done so in this case, so far. This leads me to wonder why FOS have the ability to enforce if they refuse to use it ?

When Mr Michael Barnes was Independent Assessor, he several times drew attention to problems with formulaic decisions in his annual report, but the practice continues years later. The FOS annual review for 2012-13 (page 80) says 23% of decisions were formulaic, which they describe as a decision which [tells] the business "the basis or formula on which they must pay compensation". If the basis is not absolutely precise then firms can dispute bits of it, as has happened in the 4 year case mentioned above.

FOS annual review 2012-13

20 Jun 2013 ...
Deloittes and LLoyds fobbing off PPI complainants

This story is the result of a Times reporter going undercover and discovering what was going on, but it seems Deloittes have worked for FOS too in the past according to the Daily Mail. Hopefully high standards were applied by all involved.

Daily Mail story
The Times original story (may be a firewall)

17 Jun 2013 ...
Want to see who's running the FOS ?

New pictures of the Executive Team
Pictures of the board too

25 Jun 2013 ... UPDATE FOS takes an enlightened view of complaints about bias by ombudsmen, unlike the Legal Ombudsman.

The FOS has replied to my Freedom of Information request. I asked how a complainant should proceed to make a complaint that an ombudsman was prejudiced, biased or unfair.

FOS have replied that the normal complaints procedure about service standards should be followed. So it appears that complaints about bias by the FOS's most senior and important ombudsmen will be handled by team managers, senior managers and the Independent Assessor, and FOS internal instructions to their staff confirm this.
...The Independent Assessor is independent of FOS and is not allowed to even comment on Ombudsmen's decisions...so how can she comment or decide on accusations of possible bias ?
Hmmmm...There may be more to this.

UPDATE... I have asked the Independent Assessor (who is independent of FOS) whether the FOS FOI team have replied correctly on her behalf.

The FOS response letter stating their procedures
Full FoI request to FOS about complaints about bias by FOS ombudsmen
FOS service complaints procedure
Independent Assessor's terms of reference ( See #5 )

Even so, this is refreshingly different from the Legal Ombudsman Service (LeO) who will not accept any complaints about possible bias by their ombudsmen. I repeat, they will not accept such complaints or investigate them in any way and the leaflet on service standards specifically says it cant be used for complaints about bias. Furthermore LeO staff have no instuctions or procedures or guidance on what to do if a complaint about bias by an ombudsman is received. The only way to complain about bias by Legal Ombudsmen is to commence a judicial review. This discriminatory policy means only rich people can make such complaints and the LeO has a deliberate policy not to investigate complaints about its ombudsmen in-house.

"Having carefully considered your request, I am satisfied that the Legal Ombudsman does not hold either internally or externally published guidance, policy or procedures advising staff in relation to allegations that an Ombudsman has shown bias or acted unfairly." (LeO FoIA response)
Full FoI request regarding complaints about bias by legal ombudsmen

So, I congratulate FOS on at least recognising that there may be occasions when a complaint about bias may be appropriate, and having procedures is place to deal with such complaints. The Legal Ombudsman's position is unbelievable.

13 Jun 2013... UPDATE   FOS delays publication of Ombudsmen's decisions, but its only publishing 20% of the cases anyway

FOS have agreed to publish ombudsmen's decisions but its taking time to set it up. A few details of the reason for the delay and what they propose to do is on the FOS website, follow the link below.

The delay has drawn a rather acid comment from The Telegraph. but the writer has got one thing wrong. She says FOS will publish the results of all its decisions. It is "technically" correct; all the ombudsman's decisions will be published with a few exceptions, this amounts to about 20% of cases but the 80% of decisions made by adjudicators will not be published.  So the work of FOS's top and most experienced experts will be published but the real workload and majority of cases will remain a secret. Whether this database will be useable remains to be seen, even more interesting will be if anybody looks at it apart from the financial industry. But whatever happens, it won't tell the full story.

In early June Caroline Wayman said preparations are underway to get the first group of decisions published in the next few months...so its still dragging on.

FOS website on publishing decision plans (scroll down)
The Telegraph comments on the delay
Article in Money Marketing: Caroline Wayman on publishing decisions

15 May 2013 ... UPDATE !
Legal Ombudsmen accused of prejudice will not be investigated by their employer (but a judge may look at it if you pay huge fees).  What a system !

A Freedom of Information request to the Legal Ombudsman asking how a complaint should be made about prejudice, bias or unfairness by a legal ombudsman has revealed that such complaints can only be made by judicial review. Furthermore a request to publish the LeO procedures to be followed by staff who receive such a complaint states that no information on this subject is provided to staff.

UPDATE: FOI response wording...

"Having carefully considered your request, I am satisfied that the Legal Ombudsman does not hold either internally or externally published guidance, policy or procedures advising staff in relation to allegations that an Ombudsman has shown bias or acted unfairly."

So, the LeO does not provide guidance or instructions for its staff on what to do if a complaint is received about bias or unfairness, presumably the staff just make up their responses as they they think best.  LeO staff will not even consider such complaints, and kick them into the long grass by asserting that the only way to complain is by expensive judicial review. A complaint process only available to the wealthy, should have no place in the procedures of a public body.

Compare the LeO attitude to complaints about its own staff with their own leaflet telling lawyers how to react to complaints about their staff. The leaflet is entitled:

"Listen, Inform, Respond, a guide to good complaints handling"

"Our research shows that a good complaints procedure - one that is well explained and easy to follow - can increase consumer confidence in a firm, especially when they are able to address problems that arise. It demonstratess that the firm has confidence in the service they offer and that they are committed to delivering to the highest standards"       
Full FOI response here

Do as we say, not as we do !  
Does anyone at the LeO really think ignoring complaints about their most important staff shows commitment to the highest standards or increases public confidence in the service ?    
Read the LeO leaflet with advice for lawyers here

I understand that an ombudsman's decision can only be challenged by JR. This is another bad arrangement, but we are stuck with it. But the requirement to pay a very large fee just to complain about unfairness is a disgrace !   Richard Buxton Solicitors says it could cost £3-6000 just to get to the stage where a judge will consider whether you have permission to make your complaint.

FOI request regarding complaints about legal ombudsmen this link shows what has been said by both sides, (you can 'follow' the conversation and get an email whenever the conversation changes)

Useful paper on the cost of judicial reviews (costs are at 2007 levels !)
Richard Buxton Solicitors on the JR process and costs

29 Apr 2013... Update with new links to solicitors' views. Court rules that FOS claimants CAN pursue firms in court even after accepting an Ombudsman's final decision. FOS changes its guidance ! Appeal on the way.

In a recent decision in the High Court Judge Ross Cranston has ruled that it is permissable for FOS claimants who have accepted a FOS final decision to sue for further damages in court. The situation before this ruling was that by "accepting" and ombudsman's decision, the claimant gave up the right to sue in court. So even if the ombudsman said a court might award more than FOS was allowed to award (currently £150,000 max.) a claimant could not sue once they had accepted the lower amount via the FOS decision.

In the new case, the claimants accepted the FOS decision but wrote on the acceptance form that they reserved the right to pursue the matter through the civil courts. Judge Cranston has now said that this is allowed.

One aspect of this is that the FOS award could be used to fund the subsequent legal action in the courts.

This has huge implications for how FOS operates with the juicy prospect of "unappealable" FOS decisions being discussed in court by specialist financial lawyers who may take a different view to the ombudsmen, many of whom do not have specialist financial qualifications and decide cases on a "fair and reasonable" basis rather than following legal procedures.

UPDATE FOS has now taken this on board and mentions it in a re-worded technical resource document on compensation, though its does not give much away and just refers to another document which says get legal advice.

Technical resource document on compensation
The story is well described in this article New Model Advisor
Judge Cranston's actual court judgement
Wright Hassall solicitors opinion
SJ Berwin solicitors opinion
NEW Paul Marshall, No 5 chambers, solicitors opinion
NEW Appeal allowed, to be heard in July or October
Excellent Reuters video about this case "FOS powers watered down"
IFA appeals this decision, story in FT Adviser
FOS updates guidance, story in New Model Advisor

Further discussion may develop surrounding another story that FOS decisions may not be legally binding under draft EU legislation.
EU draft legislation story

18 Apr 2013... UPDATE FOS response to Freedom of Information request is to say a request for a document designed for disabled people is of dubious value.

A recent FoIA request asked if the FOS complaint form was available in alternative formats for disabled people. FOS declined to answer on the grounds that the request was...

"of uncertain purpose and dubious value [which would] distract us from achieving our statutory functions. We feel that complying with your requests for information would cause further unreasonable burden on our resources, diverting staff away from their core tasks".

The questioner then asked for a copy of the complaint form to be supplied in Easy Read format. FOS don't have the form in Easy Read, but rather than just say that, FOS commenced a 3 week long internal review of the request before eventually saying the form is not available.

FOS original response with quotation above
FOS internal review response and explanation
Office for Disability Issues on Easy Read format
FOS page on accessibility and different needs

12 Apr 2013... FOS Chief Executive, Natalie Ceeney to address IFAs

This should be interesting, IFAs in general are pretty critical of FOS, in particular the lack of appeal when an ombudsman makes a poor decision (they are not always perfect, just human like the rest of us) and the claimant accepts. This decision is then binding and can wreck an IFA's business and career with no appeal allowed.

Details of the meeting on Citywire

11 Apr 2013... FOS board minutes of 13 Feb meeting now available

This time the board met at FOS HQ. Amongst other things the board discussed service performance and...

  • Requested analysis of cases that had been with FOS over 18 months
  • Noted that PPI cases now 10,000 a week
  • Noted that short term increasing case volumes put pressure on "timely handling of cases"
  • Noted that recruitment of 1000 new staff for 2013 well underway
  • Asked to see the IT "roadmap"

Feb 13 board minutes

11 Apr 2013... FOS chairman hits back over MP’s reform demands

In an unusual move the FOS Chairman, Sir Nicholas Montague has responded to criticism from MP Nic Dakin who wrote to the FOS about claims management companies bringing frivolous claims against an adviser. The adviser said such cases caused him to accrue FOS case fees even when complaints are rejected. In his reply Sir Nicholas dismisses the adviser's claims. See full story at link below, lower down the page many readers have left comments.

Full story in FT Adviser

10 Apr 2013...
FOS only granted 12 oral hearings since 2008

We have all known that oral hearings are almost impossible to obtain in an FOS case, but a recent Freedom of Information request shows up the figures, in fact there were only 159 requests for oral hearings.

I wish I had been granted an oral hearing for my own case, it would have hugely eased the problem of getting a complex case over to the adjudicator (who mis-understood the amount of money involved by £44,000 when she issued her solution), and the ombudsman who never really understood the main issue.

FT Adviser FoIA request and full story

10 Apr 2013... Recent news summary links
(catch up after holiday)

FOS plans and budget 1013/14
Financial advisers report each other to Ombudsman as often as claims firms
Banks are passing customer complaints to Ombudsman far too quickly

10 Apr 2013... FOS slammed for refusing to enforce UKGI (Insurance) decision

Although they won their case with FOS, (after years of arguments), this couple cannot get the insurance company to pay up and it appears that FOS will not enforce the decision. Interesting story !

I also add a link below to an FOS publication which describes some of the issues if a business won't comply with a decision, and what FOS can do about it.

"FOS slammed" article in FTAdviser
FOS consumer factsheet dealing with enforcing decisions
Insurers face a rising tide of complaints

FOS may soon clarify that claimants are entitled to see a firm's material letters and documents about their case, in the meanwhile you can ask for material documents and FOS will provide them on request

Rumours are circulating that FOS intends to confirm that claimants are entitled to see material documents in a firm's case against them. It appears that a factsheet on this subject has been delayed for several months, but an FoIA request published on 24 Jan 2013 has clarified the situation. The documents are available but not under the FoIA...you must ask outside the Act.

This would be hugely useful. In my own case the firm was shown my letters and questions but I was not shown their responses, (or the failure to respond to some questions I had put, which would have been very helpful)…it was so one sided !

Of course this is bound to lead to a considerable increase in workload at FOS. This may be why the facility is not widely published at the present time. Of course it may turn out to be disappointing as FOS staff will make the decisions about what is and is not "material" evidence so they will exercise some control. Furthermore since a claimant does not know what the firm has submitted, he may not know what to ask for. Perhaps the thing to do is to ask to be given copies of "all material documents".

FOS have today published on the "What do they know" website a response to a Freedom of Information Act request. The questioners made many requests to see documents under the Act and these were refused, however although FOS says they can't give the information under the Act, they are prepared to release it on a discretionary basis. Here is the precise wording:

"We do, however, make available on request information that is material to the consideration of a complaint......Please note these documents would not be provided to you under the provisions of the Act, but on a discretionary basis as part of our normal case-handling arrangement" (page 137 of this FoIA response)

"Our usual approach is to make copies of the documents which were important to the outcome of complaints available to the consumer and business in question upon request" (page 135 of this FoIA response)

This information is given in a FoIA response, written on 12 Jan 2012 but published on the internet on 24 Jan 2013 by the Information Rights Officer
Here is the document, (its very large 8Mb download)
What do they know website

UPDATE 4 Feb 2013...
FOS wants more adjudicators
Jobs now offered on 3 year fixed term contract

FOS needs new adjudicators, it recently said it needed 1000 more staff, many are likely to be adjudicators to deal with PPI claims, though a recent story suggests there may be a time limit on PPI claims which may affect the number of permanent positions.

FOS Chief Executive FOS Natalie Ceeney confirmed at a recent parliamentary treasury committee hearing that financial qualifications were not needed for adjudicators and this is confirmed in the latest job specification. Applicants don't need to know about any specific aspect of financial services.

At the same hearing Mr Boorman, Deputy Chief Executive said FOS required adjudicators "typically" to be graduates. However this is not specified in the current job description, but it may be something to bear in mind.

Adjudicators are advertised to start at £22k with a rise to £23.5k if FOS are happy with your performance. This is a lower salary than has been advertised in the past. In Nov 2011 an adjudicator job was advertised at £24.5k rising to £30k after 18 months if performance met FOS's expectations and some adverts in the past have offered £205 a day.

After a Freedom of Information request, FOS recently published a few details about the FOS adjudicator's induction programme. Well worth a glance for potential applicants though it is a 20mb file so may take a while to download...tips on dress, behaviour, FOS case handling system, never say "FOS" and so on !

Applicants also discuss interview hints and tips and their experiences on some web forums, see links below. Scroll up and down to find the latest comments, some are quite recent.

Searching the Randstad (FOS recruitment partner) web site today using the search term "ombudsman" showed no adjudicator vacancies, though there was a vacancy for a "case assessor" at the same salary. This may be out of date.

FOS careers web page

Adjudicator job description
Randstad website (case assessor post)
FOS adjudicator's induction programme
Wikijob forum
The student room forum
Uncorrected transcript of the Treasury Committee meeting
(Q27 to Q34 cover the "qualifications" questions)

18 Jan 2013...
FOS starts the next recruitment drive !

FOS needs many new positions at all levels from £22k to £110k, including adjudicators. FOS has said it needs 1000 new staff.

FOS careers web page

Jan 2013...
FOS advertises for new Independent Assessor

FOS are now advertising for the new Independent Assessor on the careers page, the mention of a vacancy on her personal web page has been removed, perhaps because it was clearly not written by her.

Its a good job, with a very high rate of pay at £112k pa pro-rata for 3 days a week. (only 4 very senior FOS executives earned more on a pro-rata annual basis last year, though the IA's pay does seem to have been reduced). The IA's role is not too onerous for the pay level, her terms of reference restrict her to considering FOS level of service complaints only, she is not permitted even to comment on the real business of FOS, the adjudicators' and ombudsmens' actual decisions. Last year the IA issued 268 formal "opinions" and made "recommendations" in 35% of these, mostly for financial compensation ranging from £25 to £1000 with an average of £227.

My view of the role of the Independent Assessor
Independent Assessor's personal web page
Independent Assessor's terms of reference
Independent Assessor job specification
Russell Reynolds Associates

Jan 2013... FOS issues new plans and budget consultation for 2013/14

FOS is planning to take on 1000 more staff to tackle an unprecedented rise in complaints. They expect to handle 2.2. million initial enquiries, of which 385,000 are expected to turn into full blown complaints. 245,000 of these will be PPI related and more ombudsmen will be needed as claimants are less willing to accept the adjudicators' views and want and ombudsman's decision.

Full plans and budget consultation document

Dec/Jan 2013... FOS appoints 9 new ombudsmen, 7 have legal backgrounds, only 1 has any financial background.

Chief Ombudsman, Natalie Ceeney was questioned about FOS staff qualifications at the Parliamentary Treasury Committee hearing on 30 Oct 2012. She said financial qualifications were not necessary. She mentioned that FOS was one of the UK's biggest employers of law graduates.

Video of the entire Treasury Committee meeting (if not visible...select "silverlight" at the bottom). The questions about qualifications start at about 10.02.
Uncorrected transcript of the Treasury Committee meeting
(Q27 to Q34 cover the "qualifications" questions)
Full list of Ombudsmen and their previous jobs

UPDATE 20 Dec 2012... FOS publishes final decisions on Keydata cases

IFAonline says FOS have admitted to awaiting the result of a lead decision about Keydata cases before ruling on individual cases.

IFAonline says "this is the first time the FOS has revealed it is awaiting a ruling on a lead case in order to decide subsequent claims. Usually the Ombudsman service says that each case is judged individually and that a decision on a particular investment will not necessarily impact subsequent rulings"

Deputy Chief Ombudsman Tony Boorman usually handles very important cases of this sort, he has now issued two final decisions.

Upholding complaint and awarding compensation
Upholding complaint and NOT awarding compensation
IFAonline article before decisions available
IFAonline article when decisions known

08 Nov 2012 ...
Freedom of information request to FOS results in publication of adjudicator and ombudsman induction course details

The FOIA request was answered by FOS on the last day. Details regarding FOS and complaints have been answered in a general way and the request for training information and course notes has been answered with links to the 2 induction course documents. They are large documents unfortunately and can take a while to download on a slow line.

FOS adjudicator's induction programme
FOS ombudsman's induction programme
This request on "What do they know" website with full details
FOS FoIA page on "What do they know website" with all FoIA requests and responses made via the website, (scroll down)

The documents do contain some interesting stuff, but nothing earth shattering about FOS job training, and very little about how complaints are actually assessed. There are useful notes on punctuation, how to address people, how to work the telephones, dress codes, how to work the case handling system (Clipper) etc. and a reminder never to use the abbreviation "FOS". What you might expect for a new entrant but little about actually doing the job and assessing claims which is the FOS Knowledge and Information Toolkit (KIT) which has not been published.

FOS job applicants might learn something from these documents about the style and atmosphere of the FOS work environment...and how to dress to the interview.

Using the "What do they know" website is a really good way to make FoIA requests. Other people can see the question and answer (or lack of it).
FOS page on "What do they know"

31 Oct 2012 ...
FOS rejects calls for staff to have financial qualifications

Natalie Ceeney was questioned on this subject at the Parliamentary Treasury Committee hearing on 30 Oct 2012. She said financial qualifications were not necessary and commented that FOS was one of the county's biggest employers of legal graduates. Of course there are a lot of legal graduates looking for work, it is one of the most popular degree courses and the vast majority of graduates can't find work in the legal field and have no option but to take other jobs. Not many go on to be lawyers.

Its difficult for the man in the street, and the Treasury Committee, so understand why it would not be an advantage to have financial qualifications to adjudicate a financial dispute, especially when the adjudicator is young, a new graduate with little experience of life, money, insurance, investments, savings, mortgages, pensions and all the other things they will be dealing with at FOS.

( In my case, ( FOS 5156222/KM/46) the adjudicator and (very senior) ombudsman thought advice that an 84 year old widow should invest almost her entire savings in a mixed financial package, leaving only 7% easily available in cash, was suitable. This was despite my producing evidence from an independent actuarial and financial services consultancy that the advice was negligent and the package would have been unsuitable even for a much younger person. My expert said that offering such advice as an answer in the most basic professional examination would have resulted in a fail. The cash predictably drained away without anyone noticing, I had to lend the old lady her first month's care home fees when she became ill, and the bank eventually paid £26k compensation (not enough !), but the ombudsman, without financial qualifications, still thought the advice given was suitable for the old lady.)

Change may be on the way, the new FCA is at least considering external professional qualifications for its staff. FOS will surely have to follow if they take that route.

Ombudsman job specification and salary May 2012 (graduates ?)
Advert for an Adjudicator ("you dont need to have a degree..."
MoneyMarketing story about qualifications (read the comments !)
FT Adviser article
Mortgagestrategy article
Another view
MoneyMarketing more on why staff and othersshould have financial qualifications
FCA considering professional qualifications
Video of the parliamentary committee meeting   (try "silverlight" if no pics)

29 Oct 2012 ... FOS Chief Executive announces that the FOS board is to be reduced from 9 to 5 plus the Chairman

This information was given by Natalie Ceeney at her appearance at the Parliamentary Treasury Committee today. No reason was given for the change and no hint as to which heads will roll. Ms Ceeney was being questioned by John Thurso MP about the board's unusual structure.
Video of the entire meeting (if not visible...select "silverlight" at the bottom)

The July board meeting mentioned only some administrative improvements and a more systematic CPD programme for the board.
Board meeting 25 July minutes

23 Oct 2012 ...
MoneySavingExpert FOS forum hots up about FOS bias and need to follow the law
and/or take the law into account

As always with forums...scroll up and down to follow the discussions

MoneySavingExpert forum " FOS unbiased...I think not"

UPDATED... 14 Oct 2012 ...
FOS receives an interesting Freedom of Information request

The "What do they know" website (the best way of making a FoIA request so that the public can see the response, or lack of it) has received a request for information about:

  • FOS complaint procedure, regarding a complaint made against the FOS itself.
  • Which government department and minister to which the FOS is held responsible
  • A copy of the law which governs the FOS
  • A copy of the training provided to an FOS adjudicator
  • A copy of the training provided to an FOS ombudsman

FOS have acknowledged the request and will respond by 7th November (Though they have missed a recent legal reply by date for a request about interest rates).

The answers shold be interesting, but my bet is that FOS will avoid replying on the basis that it would take too much time or be too expensive. If this happens, hopefully the writer will repeat the request, asking for less information.

This FoIA request in full at "What do they know" website
All FOS FoIA requests made via "What do they know"

UPDATE FOS do publish a minimum amount about adjudicator and ombudsman induction, but little about training

FOS adjudicator's induction programme
FOS ombudsman's induction programme

04 Oct 2012 ... Another story about FOS and misuse of PINS

The Daily Mail financial website has another story about FOS and the misuse of PINs in credit card fraud cases. ThisIsMoney says:

" The fact that a Pin was used for some of the transactions swung the FOS' decision and it ruled in Barclays favour that Nicole had been negligent"

The decision was changed and Nicole was not to blame, but this was only when Barclays said it had made a mistake and the PIN was not in fact used. If it had been used, FOS's finding against Nicole would have stood. But in the past Laura Whately in The Times pointed out that FOS "continues to misinterpret" the law in this area. Writing about a different case she said:

"Under the Consumer Credit Act even if Mrs X had been negligent with her PIN she is not legally responsible for transactions she did not authorise. Mrs X's case also demonstrates that the FOS continues to misinterpret the law on fraud despite promises that it will challenge banks' assumption that chip and pin is infallible"

ThisIsMoney has the new story
Another quite helpful Chip and Pin article

27 Sept 2012 ... Lead ombudsman Jane Hingston criticises the banks bonus culture, incentives and product knowledge, yet FOS has paid bonuses to incentivise its own adjudicators and they don't need any financial experience or skills to join FOS.
The pot calling the kettle black ?

Lead Ombudsman Jane Hingston spoke at the Liberal Party Conference and criticised the banks' bonus culture. She said selling complex products with sales incentives was a recipe for disaster. She also said a lot of people in branches and call centres do not understand how the products they are selling work in practice.

Yet in the recent past FOS has been criticised for employing new graduates who clearly have little experience of even simple financial products (mortgages and pensions) let alone complex ones, and even senior adjudicators and ombudsmen joined the FOS without financial industry experience being a requirement. If, as Ms Hingston tells us, the staff at bank branches and call centres don't understand what their own their own employer is selling, its difficult to see how FOS staff without financial industry experience can understand all the hundreds of products that the different banks and insurance companies are selling. Presumably FOS provides training but it must be quite a task to cover all the products properly.

Regarding bonuses, FOS has itself used bonuses to incentivise its own staff. Adjudicators were paid incentives to close a target number of cases. Jane Sanders the FOS ex adjudicator and whistleblower has described the incentives and Natalie Ceeney, FOS Chief Executive confirmed that "The average amount that our case-handling staff earned last year in additional pay, for example, was £4,000".


Money Marketing article on Ms Hingston's speech
FT Adviser article on FOS bonus culture and Natalie's comments
Comments by Jane Sanders, FOS whistleblower

STOP PRESS...19 Sept 2012 ...
FOS decisions may not be legally binding under draft new EU legislation

The FT advisor website has this story but don't worry...it won't happen...FOS will fix it somehow. Making FOS decisions not legally binding would cause chaos and challenge the whole FOS system. It might be a good thing, IFAs have complained for years about the injustice of a system which finds them guilty without appeal.

FT Adviser story with details (The comments at the bottom are worth reading)

18 Sept 2012 ...
Tony Boorman promoted to FOS Deputy Chief Executive

Tony Boorman has been No 2 at FOS for some time with the title Principal Ombudsman and Decisions Director, but his position (as shown on the FOS executive team website page) has changed to Deputy Chief Ombudsman and Deputy Chief Executive.

Whether this presages some changes at the top on a temporary or permanent basis can only be guessed at, but clearly FOS feels the need for a deputy chief executive.  I can find no further comment about this (available to the public), but presumably the next board meeting minutes will explain the change. I doubt if such an appointment could be made without board approval.

Emma Parker who was head of media and customer research is now deputy communications director (special projects)

FOS executive team
FOS senior management team

11 Sept 2012 ... FOS looking for a small number of exceptional people to lead and manage their ombudsmen. £85,000 +
3 year fixed term.   ( Its not a point and click management job

A new advert for ombudsmen makes full use of the FOS individual advertising style used recently for the head of casework teams position (see opposite column, 5th Sept). As well as the FOS website careers page, this position (like a previous accountant's position) is mentioned on the FOS 'news and outreach' page where it may reach a wider audience. The actual job description thankfully avoids most of the puns and says FOS is looking for a small number of exceptional people to lead and manage other ombudsmen, so this is a more senior role than the standard ombudsman. No doubt the advert is specifically designed to target the sort of senior and experienced people they want for these posts.

Perhaps FOS should be careful what they wish for. Think what it would be like if all the senior ombudsmen appointed as a result of this advert decide to get "on message" and use the same style at work !

Ombudsmen have to...

  • apply unique perspective
  • know things are not black and white
  • look through different lenses
  • get the clearest resolution
  • have vision
  • help others adjust to different perspectives

The job is not...

  • point and click
  • it focuses on the wider picture
  • and zooms in for a close-up

If you are in the frame ? The advert invites you to press the shutter


FOS careers page
IFA online view

05 Sept 2012 ... The Financial Ombudsman Service has announced a three-year strategic plan that aims to improve customer service, build trust and run the organisation more efficiently.    Don't get too excited...it's the Aussie FOS !

The FOS said the agenda will be led by its new senior management group, as announced in June. In addition to its core work of resolving disputes, the FOS said it will aim to engage more actively with key stakeholders, including implementing new consumer sector and member engagement strategies, and to enhance its organisational capabilities.

The Australian FOS has its critics too (and how !) ... see this website

04 Sept 2012 ... Debate in House of Lords will consider the 15 year rule which affects some FOS decisions

The House of Lords is set to table an amendment to the Financial Services Bill introducing a 15 year long stop limit to adviser’s liability for complaints.

The Association of Independent Financial Advisers (Aifa) policy director Chris Hannant said the bill was an opportunity to reform complaints rules for the Financial Ombudsman Service (FOS) established by the Financial Services Authority (FSA).

Citywire. New Model Adviser

04 Sept 2012 ... £900 a day jobs...might suit some staff with FOS experience

"Don’t forget the original Financial Ombudsman Service, the world’s biggest consumer complaints handling organisation. It currently operates at record capacity, with 2,000 staff taking on 1,000 new complaints per day and itself needs to grow. Banks, too, are recruiting in their complaints divisions, with reports last week that several are offering as much as £900 a day to the highly-skilled staff required to calculate certain compensation deals"

This is money website ( Daily Mail)

11 Aug 2012 ... FOS publishes plans for new fee structure which does not receive universal acclaim

FOS has published the result of its consultation on a new fee structure including the new intention not to charge firms for the first 25 cases, as opposed to the first 3 currently. This has received a mixed reception from the industry especially as claims management firms are apparently not to be charged despite the FOS saying they are slowing down it's work.

Money Marketing
FT says CMCs slowing FOS
FT adviser,       
FT adviser (2)         
FT adviser (3)
IFA online
FOS fees consultation document

06 Aug 2012 ... FOS signs lease on new offices for 2014

FOS has signed up to lease 165,000 sq. ft. of office space at Exchange Tower in docklands close to the current offices. Exchange Tower has been extensively refurbished and apparently has a "compelling" cost structure. FOS will have about 1/3 of the 16 storey building.

The owners are "delivering a full turnkey solution" for the FOS. Exchange Tower apparently has all of the facilities associated with new developments but is more affordable.

Picture of Exchange Tower
Report of the new lease     Another report
Exchange Tower website, pictures, facilities, location, etc
FOS board minutes May 2012, discuss the move
What is a "turnkey" solution ?

01 Aug 2012 ... FOS fees and lack of a long stop on claims are questioned in Parliament by Mark Garnier MP

When FOS was set up it was decided that normal statute of limitations time restrictions should not apply to FOS cases. This means that advisers can be hauled before the FOS decades after advice was given and even after the adviser's death, when compensation would be taken from their estates. Mark Garnier has tabled a number of questions to George Osborne about this and other related matters.

I predict that Mr Garnier's questions will be brushed aside and Mr Osborne will confirm that FOS is above the law.

Full story in FT Adviser website
Another view on the lack of statute of limitations

01 Aug 2012 ... Natalie Ceeney staff recruitment video

This video has appeared on Youtube

UPDATE 17Jul 2012 ... FOS swamped by PPI complaints deluge, Consumers hit by four-year delay as PPI complaints overwhelm Financial Ombudsman Service

This excellent article draws together a catalogue of problems at FOS with some new information I have never seen before, for instance one organisation has been told, after 4 months waiting for an adjudicator, that it will be a further year before and ombudsman looks at their case. FOS says the year is just a guide ! There is also a long comment on the Consumer Action Group forum and the UKS1 website has an in depth report with more detail and comments from Natalie (Chief Ombudsman) and othe staff to explain why FOS does not simply increase recruitment.

Guardian article
Consumer Action Group Forum
UKS1 similar stories
More from UKS1

13 Jul 2012 ... FOS should be responsible for some aspects of consumer protection rather than the new FCA, according to the Adam Smith Institute

The Government should abandon its plans for the “pointless” Financial Conduct Authority with consumer protection left to the Financial Ombudsman Service, the Office of Fair Trading and the Bank of England, according to the Adam Smith Institute.

Hmmmm...so consumer protection should be handled by a body where decisions are taken on the basis of "fair and reasonable" rather by legal procedures and precedent, and where a complainant has no right of appeal against an ombudsman's decision. Not sure the Adam Smith Institute has this one right !

MoneyMarketing article on the Adam Smith Institute suggestion

13 Jul 2012 ... FOS receive Freedom of Information request about Mechanical and Electrical responsive and planned building maintenance

This request was made on 12th July and has a large number of questions about various maintenance matters. FOS has declined to answer a number of questions in the past on the basis that it would be too expensive or time consuming to respond...this may meet a similar fate. FoIA questions are more likely to be answered if they are not too complex or lengthy.

Another request asks for details of how FOS adjudicators respond in alternative formats ( Braille, large print etc)

No hint is given as to what has prompted these.

FoIA request about maintenance
FoiA request about alternative formats

06 Jul 2012 ... FOS changes website list of ombudsmen, for "previous jobs" now read "career history"

Hmmmm....I resist the temptation to comment on the reasons for this change, but someone at FOS has obviously decided it is necessary. It actually draws attention to the varied backgrounds of the ombudsmen panel and makes very interesting reading indeed. Many ombudsmen have no financial background, others have moved from surprisingly senior and important sounding posts to join FOS at what must be a much lower salaries (ombudsman starting levels are around £58/70k). There must be a reason why they decided to made such a change of direction. The ombudsman listing is well worth a look for FOS watchers !

Full list of Ombudsmen and their previous jobs (career histories)
Ombudsman job specification and salary May 2012

01Jul 2012 ... FOS Delays (1)
case approaching 4 years old and still not settled !

I have heard from a claimant who has had a case at FOS for nearly 4 years and its still not settled... Confidentiality prevents me telling the story. I hope to be able to tell the full story later.

01Jul 2012 ... FOS delays (2)
FOS still has long delays, story in The Observer says FOS will take 6 months to even look at a PPI complaint

The Observer has a report of a PPI case involving around £30,000. The FOS said it would take 6 months even to look at it !   
Fortunately the case was settled when The Observer intervened.

29 June 2012 ... FOS publishes board minutes (23 May 2012)

Nothing much to report but comments on operational performance and service levels (affected by increasing workload).

The board discussed the planned move to new premises, without details of where this is to be, however a report in the property press last March suggested that FOS had made a large letting transactions in January 2012 which was stated to be – 74,710 sq ft of space at 191 Marsh Wall, E14 as well as acquiring 15,498 sq ft on a short lease to January 2014 at 189 Marsh Wall. No idea what these transactions mean but FOS appears to be active in the property world. The board thanked Tracy Campbell, Head of Property, and her team.

FOS board minutes May 2012
Report of the property transactions here

Picture and map of 191 Marsh Wall

UPDATE 21 June 2012 ... "Challenging a decision of the Financial Ombudsman Service"by Kingsley Napley (Law Firm)

This intriguing article is only available to subscribers, but it is easy to subscribe. These links give some comment but the full judgement is also available on Bailii but in legal language without comments.

Basically, Mr Justice Collins's view is that given the wide discretion available to the FOS, it is virtually impossible to show that any FOS decision is irrational. He therefore refused permission for a judicial review though he appears to disagree with the FOS's conclusion... it is not 'Wednesbury' unreasonable and thus cannot be challenged.

A decision is 'Wednesbury unreasonable' if it is so unreasonable that no reasonable person acting reasonably could have made it. This is very difficult to prove legally as it is stricter than simply 'being unreasonable', and explains why FOS wins all JR cases.
The Judge's actual judgement (Bailii)
Wednesbury terms

In other words, as many of us have known for years, the FOS is a law unto itself, some might say above the law. I know of no system for independent auditing of FOS decisions or workings, especially of the ombudsmen who, working with medieval authority can decide cases on what they consider to be a "fair and reasonable" basis, taking into account pretty well anything they choose, whilst ignoring whatever they choose. All decisions made by this process are irreversible and thus deemed to be correct by definition.This is the process that Anthony Speaight QC called "unappealable, compulsory, summary jurisdiction". It is not right, and the lack of appeals means an impression is now widespread that FOS ombudsmen are infallible when actually they are just people like you and me and can make mistakes. 20,000 decisions were made by ombudsmen last year...were there really no mistakes ?   No appeals are possible.
Some other references are below:
Barrister Simon Orton's comments on challenging FOS
Eversheds paper on FOS sidestepping the law

Speech on Ombudsmen and the rule of law by Anthony Speaight QC

UPDATE 06 May 2012 ... FOS recruitment continues...

Team manager vacancies have re-appeared on the FOS careers web page after a short gap, these have been advertised for 4 months now, along with
Case assessor
jobs which have been available for a similar period. There must be many vacancies to fill, or perhaps the right candidates are not applying ?
Candidates discuss FOS interviews on the internet. Some discussions are on "Wikijob" and "TheStudentRoom". Make sure you scroll back and forth and check all the pages, there is a lot of info here for applicants, some of it considerably out of date...and of course it may all be rubbish...but there is a ring of authenticity to some of it. No doubt the interview board will look at this too !

The student room

UPDATE 29 May 2012 ... Swansea based IFA writes to Mininster Mark Hoban about FOS appeals process...

Mr Hoban replied: “Both consumers and firms are given opportunities to make further representation before the complaint reaches the final stage of an Ombudsman’s decision.

“If a firm is dissatisfied with a FOS determination, it can challenge the decision or process by way of a judicial review. The government believes the current arrangement best supports the FOS.”

Mr Williams described Mr Hoban’s comments as “dismissive”. He said: “Until advisers have proper representation as a community with someone with real lobbying power, then any effort a lowly IFA in Swansea makes will be largely ignored.”

UPDATED STORY    This story is taken from FTAdviser
Its worth looking at the comments at the end of this story in FT. There is a wonderful quote from the last Chief Ombudsman, Walter Merricks who is reported to have said the following at a speech to the Cardiff Faculty of Law

"FOS is an unusual creature. One that I suggest Parliament would not have dared to create had the groundwork not been laid by a series of voluntary initiatives. It is a one-sided scheme offering an unlevel playing field broadly supported by those playing up hill".

With 20,000 decisions made by FOS Ombudsmen last year, some of them must surely have had errors or mistakes. These people are human after all, and as we have learned recently the Courts (twice) and jury got it wrong in a murder case recently and doctors admit making mistakes with prescriptions. But FOS resolutely thinks that Ombudsmen are incapable of error, no appeals process is available to cater for this situation. Mr Hoban thinks a judicial review is a suitable appeal, but I have yet to hear of a successful challenge to FOS at JR, and most people and small IFA firms can't afford it anyway.

In my own case ( FOS 5156222/KM/46) I showed that the Ombudsman had got a tax calculation wrong in his decision, FOS eventually agreed a mistake had been made and repaid the money themselves, but in a letter to the Independent Assessor the Principal Ombudsman blamed an FOS department which was not involved in the decision...he could not admit the Ombudsman was wrong.

How FOS mishandled my case

17 May 2012 ... Lovemoney.com website says claimants are being failed by FOS over Continuous Payment Authority

The Financial Ombudsman Service has been ruling on the side of banks that have refused to cancel your monthly subscriptions – even though banks are legally obliged to do so.

Full story on Lovemoney.com

14 May 2012 ... Claimant applies for a Judicial Review, details in another FOS thread on the "Moneysavingexpert" website UPDATE ... FOS wins !...Judicial Review not allowed

It is too complex to summarise here, but the claimant was asking for a Judicial Review of a case involving the courts which has been referred back to FOS. An oral hearing took place at which FOS apparently fielded a legal team of 4 and the claimant appeared in person to make her case. Permission was not given for a judicial review.
Moneysavingexpert forum with case details

FOS have a formidable record in all legal matters and rarely lose. This quote below is from lawyer, Simon Orton, about the difficulty of challenging FOS decisions. It was written some time ago, but little has changed.

"A recent review of the FOS system ruled out introducing any appeals process for significant FOS decisions. As a result, not only is the Ombudsman's approach to an issue capable of being unpredictable in legal terms and wide-ranging in effect, but it is also almost impossible to challenge".

Simon Orton's full comments on challenging FOS

Interestingly Yvette Bannister, who was FOS Head of Public Law and Legal has just been appointed as Managing Ombudsman public law and legal. So the head of the FOS legal team is now also an ombudsman.

The forums at moneysavingexpert.com seem to be getting more popular as a places to publicise FOS problems and issues

04 May 2012 ... Doctors admit errors with prescriptions but Ombudsmen do not admit errors with decisions

Today's Guardian and other media have news about doctors' prescription errors. It seems that 1 in 20 prescriptions has a error of some sort and 1 in 550 has a "severe" error. Presumably between these two limits lie a multitude of other errors, and this is in the critical world of medicine.

Compare this with the FOS which does not admit that Ombudsman can make errors in their final decisions and there is no appeals process to consider any cases where an error may have been made. The Independent Assessor is specifically prohibited from considering any suggestions of an ombudsman's error and she is not even permitted to comment on the merits of an FOS decision.

If FOS ombudsmen have the same error rate as doctors, then the 20,000 formal decisions they made last year contain 1000 errors of some sort, and 36 severe errors. If these mistakes occured, they will probably have passed unnoticed and uncorrected. Since there is no appeals process or external independent review process for ombudsmens' decisons we simply do not know what mistakes may have been made. The difference is that the doctors have admitted their frailty and set up an investigation into their performance, with the ombudsmen we just don't know. If FOS has any stats on ombudsmens' mistakes in final decisions they remain secret and the culture persists that Ombudsmen are infallible, when in reality, like doctors they are human.

In para 4.19 of his Independent review of FOS, Lord Hunt said , "I recommend that the FOS should have the discretion fully to reopen a decision in the very rare cases where relevant information emerges after a decision has been made, including through the work of the Service Review Team and Independent Assessor". Lord Hunt was certainly not keen on appeals, but he did see that a review of some decisions was necessary, his limited suggestion would give a chance to re-examine the worst decisions, but it is not possible currently, so they don't seem to have accepted Lord Hunt's recommendation on this point. The service review team has been abolished, but surely the Independent Assessor's terms could be changed as Lord Hunt suggested, to give her the right to order independent reviews of genuinely troubling decisions.

Guardian story
BBC version

Lord Hunt's review of FOS
Independent Assessor's terms of reference

UPDATE 19 Apr 2012 ... The principal ombudsman makes two further crucial decisions, this time on the Keydata affair, in one case he awards compensation, in the other he does not.

Tony Boorman is the highest ombudsman at FOS who actually takes cases, and they are usually high profile. Eversheds solicitors have written a very interesting comment on a recent decision by Mr Boorman's on the AIG case which was opposite to the judge's ruling in a similar case in the law courts about the same financial product. They make the point that FOS can "sidestep" the law.

Now we have two further high profile cases, this time involving the Keydata bond. These cases have different circumstances of course, but Mr Boorman has found in favour of the claimant in both cases, only awarding compensation in one of them even though both advisers gave poor advice. In both decisions he has discussed at length the way a court might have acted. So it seems that the FOS's "fair and reasonable" methodology is now to be tempered with consideration of how the courts might decide the case. All very interesting, I hope Eversheds will comment on these decisions too.

UPDATE Critical comment from IFA's
FOS and the scale of poor advice (from IFAOnLine)
The AIG decisions

FOS decision
Read Eversheds paper in full
Judgement, Rubenstein v HSBC (see para 116)

The Keydata decisions
FOS decision awarding compensation
FOS decision without compensation
FT Adviser

12 Apr 2012 ... MP suggests court action should be allowed, even after a claimant accepts an ombudsman's decision.

Mark Field MP has tabled an amendment to the Financial Services Bill which would allow claimants to accept the maximum Financial Ombudsman Service award (£150,000) and still sue for further compensation in court. This is currently not allowed, accepting the ombudsman's decision prevents further court action.

Hopefully an amendment allowing appeals against an Ombudsman's decision is also in the pipeline. £150,000 is a lot of money to be awarded by a single person who is not subject to appeal. FOS ombudsmen made over 20,000 decisions last year, they can't all have been correct, but no appeals were allowed against them.

If a claimant took the £150,000, then went to court for more and lost there might be circumstances where this could be seen as losing an appeal. The courts decide cases on legal issues, whilst FOS ombudsmen can do anything they wish as long as it is "fair and reasonable".  We may be able to see (in a very few cases admittedly) what a Judge thinks of an ombudsman's decision...might be interesting !

Full article in Money Marketing

05 Apr 2012 ... FT adviser says..."When things go wrong, the FOS has behaved inconstantly and acted with impunity when resolving some disputes"

This is a worrying article from FT Adviser about two cases which went to FOS and ran into problems with the adjudicator and ombudsman who are probably not qualified financial advisers.

"It would seem therefore, that even if all the paperwork is complete and signed, relatives present, the client’s attitude to risk completed, the asset allocation and fund choices stack-up, and sufficient liquid capital is left, this counts for nothing in the hands of the ombudsman".

"In another recent case, although the ombudsman received three written expert witness statements from MiFID-authorised IFAs confirming that the sale of an offshore bond to a UK resident taking a career break in France was indeed suitable, Fos ignored the testimony and ruled the product unsuitable. We are unable to question if the Ombudsman is MiFID authorised, his/her qualifications or experience in this area".

"In short, there seems to be no way to ‘waterproof’ a recommendation anymore, so advisers beware, you are being held in judgement by people using their own laws and rules, who may or may not be qualified to pass judgement on you. You cannot question their decisions, and even a judicial review (if you can afford it) can only investigate if the process was correctly followed, not the judgement made"

There is no appeal against an ombudsman's decision of course so if he gets it wrong there is nothing that can be done.
The above paragraphs in quotations are from FT Adviser.

Please visit their site and read the full story

A similar case
In my own case (FOS 5156222/KM/46) my Aunt aged over 80, went to the bank with a problem and ended up investing £120,000 in a mixed portfolio leaving only £10,000 in cash. When she fell a few years later and ended up in a care home the cash had disappeared and she did not have enough in the bank to pay the first month's rent, the investments had fallen badly but some had to be sold. An actuary advised the ombudsman that the bank's advice was negligent and would have failed the basic IFA exam but he ignored this and said the bank's advice was suitable for a widow of over 80. She lived alone and no friend or relative was present when she signed the agreements. The old lady's attitude to risk was clear; for 80 years she had only saved in bank and building society accounts until she inherited some shares and did not know what to do with them. She never bought or sold any shares, but FOS said owning the shares meant she was an experienced investor and the bank's advice was suitable for her.
Can't believe it ? ... that's not all !  
FOS case 5156222/KM/46

Of 38 Ombudsmen appointed last month, only 14 have previous "financial services" experience, and most of those are existing FOS staff who have been promoted so may not have practical real world IFA type experience. The recent policy of hiring new graduates for the more junior positions at FOS concerns me, these young people are unlikely to have much practical experience of investments, pensions, insurance etc. as they start their first real job.
Full list of FOS ombudsmen with their previous jobs/experience

03 Apr 2012 ... FOS advertises for a Facilities Assistant (£20,400) at salary higher (just) than Consumer Consultant (£20,000) and not far off Case Assessor (£22,500)

These jobs appear on the Randstad website. There was a high turnover in FOS staff last year, as staff took better paid jobs with financial companies. Judging by the job descriptions, consumer consultant and case assessor are important roles, dealing directly with people coming to the FOS with financial concerns. The salaries seem low.

Randstad website showing these jobs
FOS board meeting discusses staff turnover

30 Mar 2012 ... Case with FOS now approaching 3 years and 9 months and still not settled

I have been contacted by a reader who tells me this astonishing news !
I have agreed not to release details here. One contributor on the forum linked below mentions a delay approaching 4 years.
Discussion forum on FOS delays (this forum has now drifted off the point)

30 Mar 2012 ... Interview with the new FOS Chairman, Sir Nicholas Montagu
Interview in Ombudsman news No.101

29 Mar 2012 ... FOS management recruitment continues

FOS need a Head of Continuous Improvement Programmes (£75-90k)
and a Project Manager for Continuous Improvement Programmes (£40-50k)
Interestingly the recruitment partner this time seems to have changed again, and is 2020 Delivery even though FOS signed a £4,000,000 contract with Randstad 6 months ago as recruitment and resources services provider.
FOS still needs case assessors, senior manager policy and public affairs, heads of casework, team managers and consumer consultants as expansion continues.
FOS careers page
FOS major contracts with prices

28 Mar 2012 ... FOS board given a note about FOS's approach to awarding interest

Hopefully this note by Tony Boorman, decisions director, will be pubished soon on the FOS website because the FOS approach to interest is variable (no pun intended !) We do not know if the new note changes anything.

In my case the Ombudsman approved a firm's compensation offer with interest paid at bare base rate, and the principal ombudsman at the time (Mr Boorman) rejected the Independent Assessor's request to look again at how they had dealt with this matter which did not follow their own guidelines which require base rate +1% should be used. This cost my aunt £4800 in missing interest.

But in a recent case Mr Boorman awarded interest at base rate +1%, saying:
This reflects
my normal approach to compensating customers for poor investment advice in cases such as these....

The FOS approach to interest rates need clarifying. Here is an extract from the FOS "Quick Guide" on the subject

"For cases where the alternative suitable investment is not known, we are likely to require the firm to calculate the difference between how the unsuitable investment actually performed and how some alternative suitable investment would have performed to date – assuming a return on the amount invested equivalent to the Bank of England base rates during the relevant period + 1%, compounded yearly from the date of investment.

FOS "Quick guide" to calculating redress in investment complaints
Longer illustration of FOS interest rate issues
Feb board meeting minutes

28Mar 2012 ... FOS board discuss videos promoting FOS

The February board meeting discussed FOS videos made to show consumers about the FOS service. A number of these are available on the FOS website, but interestingly FOS has placed a disclaimer at the bottom saying

"These illustrative stories are based broadly on real-life cases" (my italics), so the cases may or may not be real ones.

FOS have not asked me to make a video of my experience with FOS, to tell the other side of the story, but anyone interested how FOS works should surely look at both sides. My experience made me set up this website to try and show that not everything at FOS is perfect. You can read about it from the link below.

FOS in-house videos
My experience with FOS
Feb board meeting minutes

11 Mar 2012 ... New interview with Natalie Ceeney
("Queen of complainers") including a new picture

This interview with Daily Mail "This is money" website does not tell much new about FOS, but it does tell readers a little about Natalie, "Queen of the complainers" who clearly impressed the reporter with her "vertiginous" heels. It's actually quite a good article and worth a look for FOS watchers (and perhaps even for FOS staff !).

There is also a virtually identical article in the Mail's women's forum. Perhaps showing a women's viewpoint, the heels are no longer thought vertiginous.

"This is money" Daily Mail interview in full
Similar article from Financial Mail Women's Forum

09 Mar 2012 ... Eversheds' paper on the future of the FOS, a comment on the NAO review of FOS

"The NAO and the FOS have both acknowledged that the FOS has not been running as efficiently or effectively as it could"

Read the full Eversheds' report

08 Mar 2012 ... Thinking of applying to FOS...?   Read what others say about the interviews etc

This discussion website has some recent posts about FOS. You may need to scroll down and search around a bit.

Wikijobs website discussion on FOS

22 Feb 2012 ... FOS lets 74,700 sq ft office space in docklands

The tenure on FOS's current office accomodation expires soon and they have done a deal on 74,700 sq ft of office space nearby at 191 Marsh Wall, E14. One of the largest recent property deals in the area. The price is not yet known.

Report of the transaction
Picture and map of 191 Marsh Wall

21 Feb 2012 ... Interesting report on CAG forum. FOS refuse to give information about a deceased partner...but Information Commissioner says they are wrong. FOS backs down.

This topic on the Consumer action Group FOS forum refers to a request for FOS to provide information about a deceased partner. This info was required for probate etc. FOS declined the Subject Access Request on the grounds the person was deceased.   The consumer than made a Freedom of Information Act request for the same info and this was refused as well.

"Any information that we may or may not hold on these matters would be exempt under section 41 (1) of the act,as the disclosure of such information to the public would constitute an actionable breach of confidence.

Section 41(2) of the ACT provide that there is no duty to confirm or deny whether we hold the information sought where even to confirm or deny would constitute an actionable breach of confidence.

Therefore, under section 41 (2) of the act we neither confirm or deny whether any such information is held by the F.O.S.

You should not take this letter as an indication of whether or not the financial ombudsman service holds the information you are seeking."

The consumer then contacted the Information Commissioner's Office who advised that FOS were wrong. FOS are now co-operating and have now provided the information.

Full story from CAG website

14 Feb 2012 ...
FOS refuse Freedom of Information request to reveal text of template standard letters etc...too expensive !

The FOS admits that it does use standard text but they say they don't use standard letters to determine the outcome of a complaint because each complaint is considered individually. This contrasts with what ex-adjudicator Jane Sanders said, as reported by Anthony Speaight QC in a speech about FOS issues.

"Voila! Excellence [a software program] creates a template letter which, in the loosest way possible, was tailor made to the complainant's case. You then take further standard paragraphs, emailed to you from your mentor, for you to store on your system, and apply them depending on the type of case you have, and pad out the letter until you have something that was considered acceptable".

FoIA request to see standard letters etc
Go straight to FOS reply letter
Speech by Anthony Speaight QC with the above quotation

12 Feb 2012 ...
"Interim Operations Director" appointed as "Operations Director" !

In a change which must come as a relief for Chris McDermott, FOS have quietly removed the work "interim" from his title. Less than 2 months ago Natalie advised the board that his appointment as interim operations director was made to allow "a little more time" to find a person of the right calibre for the full time position. Presumably Mr McDermott has now been assessed as having the right calibre after all. This must be embarrassing for all concerned especially Mr McDermott who could surely have been spared this by the selection board. No doubt the reasons for the change of heart will be published by the FOS.
Garry Wilkinson has been promoted to deputy operations director.
Board minutes Dec 2011

At the same time, many other name changes have been posted at the highest level at FOS, continuing the huge changes that have taken place since Natalie Ceeney arrived. Some have moved post, but other names have gone and (suprisingly) yet a further "interim" position has been listed. More analysis later.
New FOS Executive team
New Senior Management team

12 Feb 2012 ... Interesting report by a person who had his PPI complaint turned down by FOS based on what he might have done in circumstances which never happened !

It seems the ombudsman, was not "persuaded that the customer would most likely have acted differently had they been properly advised, informed and fully understood the position [of the PPI sale]".
It seems the ombudsman accepts that the person
was wrongly advised, but wants proof that he would not have bought the product if he had been properly advised.
Hmmmm...So the ombudsman seems to have based his decision on what he
thinks the consumer might have done in circumstances which never happened !
This is a case where full publication of the decision would be invaluable. No wonder some people think ombudsmen's powers are too wide and have insufficient scrutiny...not to mention no appeal process !
Full article and details

10 Feb 2012 ... FOS has to advertise more widely for unfilled
Head of Casework posts

FOS has been looking for people to fill these posts for 2 or 3 weeks, but it looks as though they are in some difficulty. The £60-£75k posts have now appeared on the websites of 5 different recruitment consultants. The FOS careers page tells applicants to apply to Agile Talent Management, but a search of the Agile website using "ombudsman" as the search term showed no FOS jobs today. However FOS Heads of Casework are advertised at the 5 agencies shown below and several others. Ranstad financial and professional, do not seem to be involved with these jobs despite their £4,000,000 contract with FOS. Something has gone up a gear in FOS recruitment recently.
Telegraph Jobs
Exec appointments
Executives on the web
Yet more adverts

Agile Talent Management
Randstad financial and professional

06 Feb 2012 ... Jane Sanders, the FOS whistleblower, gets involved in FOS dispute. MP writes to financial secretary to the treasury about FOS bias

Jane, who was an FOS adjudicator but is now a barrister has made comments regarding adjudicators actions which could create bias against firms or individuals. It is a personal case where an IFA has written to Natalie Ceeney complaining that FOS has pre-judged cases against him.

Now Paul Burstow MP has written to Mark Hoban, financial secretary to the treasury asking for consideration of the points made by the IFA, who is his constituent. The IFA suggested there should be an independent audit investigation of the working of FOS, and Mr Burstow asks for this to be given serious consideration.

I agree entirely, I know of no system for independent auditing of FOS decisions or workings, especially of the ombudsmen who, working with medieval authority can decide cases on what they consider to be a "fair and reasonable" basis, taking into account pretty well anything they choose, whilst ignoring whatever they choose. All decisions made by this process are irreversible and thus deemed to be correct by definition. No appeal is possible. This is the process that Anthony Speaight QC called "unappealable, compulsory, summary jurisdiction". It is not right.

First article about this in FTAdviser
Second, more detailed article in FTAdviser
Other comments about FOS procedures by Jane
Anthony Speaight QC makes the "unappealable" comment (scroll down)
Speech on Ombudsmen and the rule of law by Anthony Speaight QC

03 Feb 2012 ... FOS announce the results of its consultation on publishing decisions. It looks as though 89% of case outcomes won't actually be published at all, thus making it completely un-representative of what really happens at the FOS

It looks as though FOS will press on pretty much as planned with publishing. The feeling I have is that most respondents are generally in favour, though many have reservations.

I am pleased I am not the only one to be concerned that adjudicators' decisions (FOS calls then views) are not to be published. When the man in the street goes to FOS he knows nothing of adjudicators (and their views) or ombudsmen (and their decisions), he just wants to get his case sorted. Since Ombudsmen only make decisions in 11% of FOS cases, not publishing the adjudicators' 89% of the work makes a mockery of the whole thing in my view. FOS need to decide why they are doing this, if it is to publish an open and transparent statement of how FOS handles its caseload then this will not be achieved by leaving out 89% of the results. OK, there are 200,000 adjudicators' views and it will be a huge task to publish them...but that's not the point. If FOS wants to be open and transparent the adjudicators work must be published. I must say though, on reflection, I wonder if the whole thing is really necessary, no-one is going to look at most of these documents.

FOS consultation results
My response document

03 Feb 2012 ...
FOS board discusses the operations director position

The FOS board December 2011 minutes confirm that the recent appointment of an interim operations director was made to allow "a little more time" to find a person of the right calibre for the full time position. In other words, no suitable candidate could be found for this important and senior position, advertised at £140k and recently vacated by Simon Rouse who departed to Santander. FOS also failed to recruit a company secretary recently.
Board minutes Dec 2011

01 Feb 2012 ...
FOS wins judicial review regarding the issue of whether volcanic ash is weather and covered by travel insurance
FSA wins JR about the FSA's compensation package for Arch Cru.

The FOS legal team have a good record in JRs and have won another decision. It has to be said that some commentators have pointed out that the ombudsmens' authority is so wide ranging that it is very difficult to win against them using the mechanism of a judicial review. It will be interesting to see what the actual decision says, it may effect many other insurance claims on similar issues.
More on the case
FOS announcement

In a second court victory for the authorities, FSA won too. I have not seen the actual judgement yet, but it seems the Judge did not rule on the actual facts of the case, but said the firm had insufficient reason for calling for a judicial review as it did not have investor backing. If this is so the actual issues have not been properly tested. Interestingly FSA asked for costs but had these slashed by the judge from £18,000 to £6000. He said £18k was disproportionate, a comment which throws light on the FSA approach. FOS were also present, as was Capita, but neither asked for costs. There may be a further JR on the way by Regulatory Legal.
FTAdviser on the FSA victory
MoneyMarketing on FSA victory

26 Jan 2012 ... FOS critised by IFA for failing to take account of 75yr old woman's attitude to risk and misunderstanding the status of a trust fund.

This is quite interesting. It seems the FOS assumed that money in trust was available to the woman when it was not, and thought that if she took an income from an investment it somehow made a loss acceptable. Also the IFA questions how the attitude to risk was arrived at.
Full details from New Model Adviser

My own case was similar, worse if anything, see box below:

My aged Aunt had kept all her savings in building societies until nearly 80. This was a good indication of her attitude to risk. However she then inherited some shares (never traded !) and asked her bank for advice. She was persuaded to make an investment that left her with only 7% of her savings in cash even though she was unwell and now aged 84. The Ombudsman classified her as an experienced investor and thought the bank's advice was suitable. She lost a huge amount as the bank mishandled the investments and when she fell and went to a care home her cash reserve had also been neglected and had fallen so low that she had to borrow to pay the first month's fees.
Can't believe it ? ... well actually that's only a taste of what happened as FOS mishandled the case. Also read how the Independent Assessor took my side and how the Principal Ombudsman reacted.
Read the full story of my battle with the bank and then the FOS

FOS staff can check this in FOS case 5156222/KM/46.

26 Jan 2012 ...
PPI case with FOS for 3 years and still unresolved.

Full details on the Money Marketing website

21 Jan 2012 ... FOS declines to give full answers to 3 Freedom of Information requests, on grounds of cost.

FoIA request: FOS and Shia law
FoIA request: Smallest compensation levels awarded by FOS    
UPDATE 24 Jan The above request has been revised to bring it within the FoIA cost limit. It now refers to 11 example cases used by FOS in a technical note. (There are only 11 cases (a - k) in the publication which are relevant to the request). FOS must know which cases they are and can easily find them.
FoIA: Which banks have not been charged a case fee (i.e. had few complaints)

In one of its responses the FOS information rights officer makes this comment:

The Freedom of Information Act provides a right of access to recorded information held by a public authority. It does not, however, require a public authority to provide comment, opinion or justification

Making a successful request clearly requires careful thought about what to ask, and how to word the question to avoid the risk that it will cost more than £450 to answer. Requests for specific documents should not cost too much, but we will see what happens. Details of what can be asked for is on the FOS website, you can ask a question.
FOS website FoIA request page

19 Jan 2012 ... New Freedom of Information request asks FOS to publish all template letters, sentences and paragraphs, used when responding to the public
FoIA request can be seen on the "What do they know" website. Making requests via this site allows the public to see what has been asked, and the response. This could be interesting !

Jane Sanders the FOS whistleblower (now a barrister) has commented on the use of standard letters and paragraphs when she was an adjudicator.
"Voila! Excellence [a computer program] creates a template letter which, in the loosest way possible, was tailor made to the complainant's case. You then take further standard paragraphs, emailed to you from your mentor, for you to store on your system, and apply them depending on the type of case you have, and pad out the letter until you have something that was considered acceptable"
This clip was taken from a speech by Anthony Speaight QC
"Ombudsmen who are an affront to the rule of law", by Anthony Speaight QC
Other comments by Jane Sanders
FoIA request: template letters sentences and paragraphs

16 Jan 2012 ... FSA asks IFAs for details of their professional indemnity insurance (PI) as Arch-Cru case turns nasty
A group campaigning for IFAs has branded the FSA's letter asking for details of PI insurance as "sinister". The campaign group refers to the "notorious" FOS decison on Arch-Cru where IFAs may have to re-imburse losses which exceed the FSA agreed compensation scheme and warns that FSA may be seeking to close down some IFAs. FOS is not allowed to award compension based on "fair and reasonable" in these cases, and must follow FSA rules which give lower amounts after a deal with some financial firms.
FT Adviser article on FSA's action
FOS Ombudsman's decision re Arch-Cru case
FSA information on Arch Cru arrangements

11 Jan 2012 ... FOS has been losing staff to financial firms...
This is what they are up against !!!

Barclays are appointing a Senior Operations Manager to handle a team of 100 staff dealing with Barclays' cases which have been referred to FOS. No salary known, but FOS has admitted losing staff to financial firms so a high figure is probable. This might attract another FOS departure, especially as relationships with FOS and knowledge of FSA compliance requirements are valued.
Barclays Senior Operations Manager, FOS complaints
Same job, different ad.

6 Jan 2012... FSA fail to stop legal proceedings against them for harassment. FOS also involved. (See links below)
Money Marketing tells that a county court has rejected a bid by the FSA to quash a case brought against it by a retired IFA who is suing the regulator for harassment.  The article states that John Calland is suing the FSA under the Protection from Harassment Act 1997, alleging the FSA, the Financial Services Compensation Scheme and the Financial Ombudsman Service worked together to unfairly progress loss assessments and solicit pension complaints from former clients.

The judge said: “I consider that the respondent’s case is better than merely arguable, and that, therefore, it has a real prospect of success, in that it is not fanciful, false or imaginary and I do not find his case improbable.”

It appears that the FOS Independent Assessor (Michael Barnes at the time) published a decision on 6th December 2006 saying that some complaints were " in effect solicited" by FOS. FOS's part in this is discussed by Anthony Speaight QC in a talk to the Professional Negligence Bar Association which tells how FOS behaved and illustrates why Mr Calland has a right to feel aggrieved. See links below.

No doubt more will leak out about what may prove to be a very embarrassing and serious issue for the bodies concerned. FSA will appeal, so there should be plenty of publicity. A successful claim of harassment by a public body or bodies against an individual would be absolute dynamite. Heads would roll.

FSA, FOS and the other bodies have unlimited funds and skilled legal teams to defend this case, unfortunately much may depend on Mr Calland's willingness to continue his 10 year battle with FSA and spend a lot of money in legal fees.
Full story from Money Marketing website
Another interesting report on this issue
FT Adviser on the issues
More astonishing background to the court case
Anthony Speaight QC's view (extract referring specifically to the Calland case)
and his full talk entitled
"Ombudsmen who are an affront to the rule of law"

1 Jan 2012... Claimant's case passed around 4 different adjudicators for 2 years, as they changed their minds
A reader writes, telling me of his case:

"we have had no less than 4 different adjudicators assigned to our case and gone from winning our case, to completely losing it, to now partially winning it again on an Ombudsman's final decision".

Judging by this, it looks as though the large turnover in adjudicators is now seriously impacting on service levels at FOS with 4 adjudicators involved and an ombudsman, all reaching different conclusions on the same case. There has recently been a large recruitment program with 70 adjudicator vacancies advertised on a recruitment website. In the summer the FOS board discussed the high rate of staff turnover, so it must be a serious concern at the service. Recent adverts on the FOS careers page were for temporary and permanent Adjudicators (on very different pay scales), Ombudsmen, Team Managers and Consumer Consultants, Heads of Casework and a new Operations Director at £140,000 to replace Simon Rouse who left recently

Another member of the public has contacted me to say their case has now been at FOS for over three years without a final decision, despite various promises. I would be interested to hear if anyone has been waiting longer ?

There may also be concern about the nature of complaints FOS staff are dealing with. A recent Freedom of Information request asked how many very small awards were made. It will be interesting to see the answer, FOS could be employing large numbers of staff on relatively trivial cases, thus slowing down larger cases.

Gareth Thomas MP has recently asked a question in the House of Commons about FOS staff numbers and future staff projections. No meaningful reply was given by the minister, but there must be a reason why Mr Thomas is sufficiently concerned to bring the matter to the attention of the House, perhaps as a result of the recent very high recruitment level or concerns by his constituents.

FOS careers website
FOS board July meeting discusses adjudicator turnover
Smallest amounts FoIA question
Mr Thomas's question in the house

21 Dec 2011... Association of British Insurers not keen on FOS publishing all its decisions
The ABI questions whether publishing all decisions is the best approach. They may be right, certainly most published decisions will never be looked at in my view.
More details

21 Dec 2011... Last FOS Chief Ombudsman, Walter Merricks appointed to Gambling Commission
Quite a lot of information on what Mr Merricks has been doing since his unexpected resignation from the FOS in 2009.
Details here

13 Dec 2011... ILAG response to FOS publishing decisions says this could be a boon for claims management companies, also firms could accept adjudicator's views rather than risking an Ombudsman's decision which would be published.
The Investment and Life Assurance Group has responded to the FOS consultation on publishing decisions. I can't access the full response but IFAOnline has a summary.
IFAOnline summary of ILAG response

24 Nov 2011... FOS not so independent when it comes to the Arch Cru case. FSA sets compensation levels, not the ombudsman.

The FSA has reached an agreement with the financial firms regarding compensation for investors who have lost money in the Arch Cru affair. The agreement limits the amount of compensation to around 70% of the amount lost.

FOS operates under rules set by the FSA, but it also claims to be completely independent and impartial. FOS decisions are based on what is "fair and reasonable" and FOS seeks to place the investor back where they would have been if the firm's mistake had not been made.

But not with Arch Cru, where the FSA has told FOS to follow the FSA scheme payments. In his recent decision on an Arch Cru case the principal ombudsman, Tony Boorman has advised the complainants of this restriction.

"So were (the complainants) to raise a separate complaint with me in respect of the actions of the fund managers I would need to follow the rules of the (FSA) scheme and I would not be able to award more (or less) compensation than the scheme will provide.

I have not heard of this kind of restriction being imposed before, where the FSA interferes with the FOS's independent and impartial stance and tells it what it may or may not award. Not good news for independence and impartiality I would say.

The FSA policy is being challenged at judicial review and this may result in IFAs being liable to pay the redress.

Law firm Pannone is reported to be offering "no win no fee" advice to Arch Cru investors who want to sue their IFAs to recover redress not available through the FSA scheme

Mr Boorman's decision (the extract above is on page 14)
FSA information on Arch Cru arrangements
JR and IFA's liability
FTAdviser article on Pannone no win no fee

21st Nov 2011... PPI cases at the FOS rise from under 1000 to over 3000 per week

Natalie has a longish foreward to edition 98 of Ombudsman News where she tells of the unsettling effect the sharp rise in PPI cases is having on FOS. Clearly the current massive recruitment surge is tied up with this, especially as most advertised posts are for PPI adjudicators on short term contracts. She also says that 80% of PPI cases are handled through claims-management companies. FOS say people can handle these cases themselves and in a perfect world this might be true. However when dealing with the banks and insurers etc, claimants come up against top class professional and very experienced negotiators. Its asking a lot for the ordinary man in the street to argue his case effectively against these experts. Claims-management companies may not be ideal, but many people would not get far without their advice.

It is a long standing issue with FOS that they prefer and urge consumers to put their case in their in their own words, but they are happy that the firm's case is often put by professional staff who specialise in defending claims. An inexperienced adjudicator may be influenced by the skill and style of the presentation, especially if the claimant has difficulty with the complex issues involved and puts his case less effectively.

The extra workload means FOS are hiring more staff. The Guardian says FOS has 300 workers on PPI exclusively and the banks may hire 6000 more staff to handle PPI claims. FOS may not find it easy to get the best people.

Sir Christopher Kelly stands down as FOS Chairman in January 2012. He writes his thoughts on the service as he departs. He has some thoughts on time scales and case fees. Overall, he seems pretty happy with the organisation.

Ombudsman News No. 98
Guardian article on PPI and FOS

17th Nov 2011... Confusion in FOS recruitment plans as adjudicators' pay and job details change again

The FOS website careers page says they need adjudicators. The salary has changed 3 times this month but has settled at £24,500 to £47,000. The job description describes a long term career with pay £30k after 18 months and perhaps £47k later and tells how Caroline Wayman rose from adjudicator to be FOS legal director. We learn that top ombudsmen earn £105k. But this is not the picture given on the FOS £4,000,000 recruitment consultants' website.

4 Nov 2011 Searching for "financial ombudsman" at the recruitment consultants' web site showed up 71 jobs, all much the same (adjudictor level) but with 15+ different job titles for both graduates and non-graduates. Salaries varied with job tenures, some were temporary, some permanent, some contract. Pay was £24,000 to £24,500 per annum but some jobs were £205 per day. It was hugely confusing.

BUT ...
17th Nov, and much has changed.
Searching for "financial ombudsman" lists only 32 adjudicator jobs. This time all have the same job title "PPI adjudicator-London". Most, perhaps all, seem to be "contract" and "temporary" posts, degrees are "desirable but not essential", experience required is minimal, "1 year pqe plus", and pay is " £205-£205" per day. All annual salaried and graduate posts at £24.5k seem to have gone, or been filled perhaps, and there is no mention of the £47k to £105k long term career structure on the FOS website job decription.

BUT (2)
18th Nov, yet more changes
Now 45 adjudicator type jobs. The post of "mortgage complaints adjudicator" has re-appeared alongside PPI adjudicator, job description much the same, qualifications "NQ" this time. £205 per day.
ALSO, a permanent adjudicator post is back at £24,500.
Profession: Operations and middle office
Specialism: Investment banking
Job category: Futures and Options
Looks like a new and specialised adjudicator position.

So it seems a PPI adjudicator on a temporary contract can earn the same as a junior permanent adjudicator in around 120 days. A situation unlikely to raise morale among the permanent staff. The status of the controversial FOS bonus scheme (paid to adjudicators as an incentive to meet case closure targets, said to be about £4000 pa on average) and the "flexible benefits" package is unclear. Perhaps contract and temporary staff don't get these ?

FOS also need team managers, £40k to £58.7k. and ombudsmen £65k to £85k but details are only advertised on FOS careers webpage at the moment, nothing at Randstad.

FOS adjudicator job description
Randstad advert for contract PPI adjudicator - London
Randstad advert for temporary PPI adjudicator - London
Randstad advert for permanent adjudicator
What does "1 year pqe plus" mean ?
Article in FT Adviser mentioning £4000 average bonus

FOS careers web page. Job details and flexible benefits summary

15th Nov 2011... "The Sun" website comments on Simon Rouse's departure and FOS staff turnover, 38% of adjudicators have been there less than a year.

"The Sun" says Simon Rouse, operations director of the Financial Ombudsman Service, announced his departure earlier this week and is now on paid leave prior to perhaps returning to Barclays Bank. He only joined FOS in August 2010 after a spell as director of strategic planning for Hertfordshire NHS.

"Insiders" claim there are now huge concerns about staff turnover at the Financial Ombudsman Service where 38% of its adjudicators have been there less than a year.

Adjudicators do 89% of the work at FOS, and this speculation may have some basis. FOS has been recruiting adjudicators for some time and has recently raised some pay levels by almost 100% and is trying to attract graduates. The FOS board recently discussed high adjudicator turnover and FOS is piloting a new adjudicator training qualification which it says will be at masters degree level. FOS recently placed a £4,000,000 with Randstad for recruitment and resource services. A search of Randstad's website at 14.30 today lists 70 vacancies at FOS, mostly variations on the adjudicator post.

FOS will be publishing the text of its ombudsman's decisions soon, but wishes to leave adjudicators' decisons out of the scheme, saying it would not be helpful to publish them.

Roger Gough's name as head of operational planning has also disappeared from the FOS senior operational team. Change is in the air.

Mortgage Solutions article on these things
Sun website article about Simon Rouse's departure (scroll down to "Bank cop poached...by bank")
FOS board July meeting discusses adjudicator turnover
FOS Careers web page
Randstad, new recruitment consultants
New operations director job advertisment

11th Nov 2011... FOS replacement
Operations Director now advertised at
(up to) £140,000 pa
Can you connect the dots ?

The departure of Simon Rouse is confirmed in Natalie's letter accompanying the advertisment for a replacement Operations Director. A financial services background is specifically not required for the new candidate, although it was thought valuable when Mr Rouse joined 16 months ago. This is what Natalie said about Mr Rouse when he joined:

"His current experience of strategic planning in the public sector - combined with his background in financial services - means he comes with a unique understanding of the issues we face"

Applications are direct to FOS, (The new £4,000,000 recruitment firm does not appear to have been entrusted with this appointment yet).
Closing date 29 November
Job advertisment
Job profile and application address

Nov 2011... FOS to spend £4,000,000 on recruitment and resource services, and over £1,000,000 on staff training, management skill and leadership courses
Recent big FOS contracts
on recruitment and resource services
£912,000 on cleaning services
£820,388 on casework training and development programme
£2,000,000 + on computers,printers and storage
£830,000 on supply of stationery, toners and paper
£250,000 tender for management and leadership development programme
Full details FOS contracts exceeding £156,000
Full details FOS tendering opportunities over £156,000

Procurement at the FOS

10th Nov 2011... FOS wins case at European Court of Human Rights (old news now, but interesting summary)
As usual FOS seems fireproof on all legal matters. This case has been dragging on for some time through the UK court system, court of appeal and ECHR. It is worthy of note that ECHR did not offer a judgement on the allegation that FOS was not independent or impartial for the reason that this had not completed the UK legal process before going to EHCR.
Summary of the case and decision
Actual ECHR ruling

Oct 2011... New FOS adjudicator qualification planned and FOS tenders for management and leadership development programme

FOS is "piloting" an external accredited training programme for adjudicators, set at Masters degree level – in partnership with Queen Margaret University, Edinburgh (QMU) which was awarded a 4 year, £820,388 contract to provide a casework training and development programme
A masters degree is a high qualification usually requiring the student to hold an existing batchelor degree though t
he current adjudicator job profile does not require adjudicators to have degrees.  I cannot find any mention of the FOS qualification in the QMU list of postgraduate degrees, though a search of the QMU website does mention FOS training briefly.
More information is needed on what may be a very significant increase in adjudicator qualifications if it is a masters degree level.
FOS is also tendering for a £250,000 management and leadership development programme
UPDATE 01 Feb 2012

QMU have now published a press release about these courses
QMU press release about the new masters course
FOS contracts exceeding £156,000
FOS tendering opportunities over £156,000

Aug 2011... Laura Whately of "The Times" reports on another FOS mistake concerning the misuse of
credit card PINS

The Times is doing a good job at publishing FOS problems and issues, unfortunately the Times 'paywall' means I cant add useful links.
Times 'Money' section 20 August 2011has a story of a woman who had £16,000 taken from her credit card account when it was sent by Barclaycard to the wrong address. There are many other factors but the Times says

"Under the Consumer Credit Act even if Mrs Russell had been negligent with her PIN she is not legally responsible for transactions she did not authorise. Mrs Russell's case also demonstrates that the FOS continues to misinterpret the law on fraud despite promises that it will challenge banks' assumption that chip and pin is infallible. Mrs Russell took her case to the FOS last year but the Adjudicator sided with Barclaycard". Ross Anderson, Professor of security engineering at Cambridge University says he is shocked by the ombudsman's decision. The Times says FOS are reconsidering what they said.

UPDATE, Nov 5th 2011, The Times reports the Ombudsman has made a U-turn, after the newspaper intervened, mentioning "further" evidence being available, but there is no mention of what this evidence was or why the adjudicator failed to understand the consumer credit law in the first place.
In another case reported in the 'Money' section on 12 Feb 2011 Halifax accused the complainant's disabled husband of buying a fridge/freezer, dining table and chairs and a flat screen TV in mainland Spain, at a time when he was by a pool in Tenerife.

The case is about credit card fraud and use of a PIN to steal money. Laura says..."
I can't work out whether the banks don't understand the rules, or if they choose to be ignorant. - And it is not only the bank, it is the Ombudsman too - ruling in Halifax's favour on this one."
The Times reported
"Emma Woolf, 28, lost almost £10,000 after her Abbey business account was hijacked by fraudsters. The bank refused to compensate her and she took her case to the Financial Ombudsman Service. However, after seven months she gave up hope of receiving a fair decision and took Abbey to court." She got her money back in the end but though the Courts, not the FOS apparently. Details here



I describe the FOS standards and policies which made me campaign for change at FOS and for the introduction of an appeals system

Based on the way FOS mishandled my case, I submitted evidence to Lord Hunt's Independent Review of the FOS.

My evidence details the mistakes and incompetence in my case. It is a long read unfortunately, but will open your eyes to how FOS works at every level from Adjudicator to Chief Ombudsman and shows the role of the Independent Assessor
Read what what happened in full (my evidence to Lord Hunt)
My thoughts about the role of the Independent Assessor

The outline of my case in bullet points:

  • This is FOS case no. 5156222/KM/46
  • Adjudicator did not understand all the issues, Ombudsman similar, made same mistakes as Adjudicator
  • After years of hassle with bank and FOS, I reluctantly accepted the decision, FOS are supposed to be the experts after all
  • Only then did I discover that the Adjudicator and Ombudsman had not told me about FOS guidelines on tax and interest rates which if followed would have raised award by £8000. I would never have accepted the decision if I had know about these
  • Asked Adjudicator (who had recently recommended the award as fair and reasonable) why the guidelines had not been followed... no answer... too difficult... she the passed enquiry on to the...
  • Service Review Team, very difficult to deal with (see quotations page). For months tried to justify tax at 20%, then reluctantly 10% but eventually agreed award not taxable at all.
  • FOS avoided blaming the Ombudsman though, even though the bank paid the (incorrect) amount he and the Adjudicator had recommended. They pinned the blame on the innocent Service Review Team, who were not involved in the case at the time of the Ombudsman's decision
  • But the interest rate used to calculate the redress was still an issue after months of arguing. Bank used bare base rate, FOS guidelines say base plus 1% should be used (difference £4800)
  • FOS admit not checking calculations (this is normal practice) and not using their guidelines.  Eventually FOS stated that the difference between the firm's offer and what FOS would have set by the guidelines was not "significant", so it was acceptable. The shortfall was £4800 !  See quote below.
  • I referred the case to the Independent Assessor who agreed with me ! £4800 WAS significant, he asked FOS to review it
  • FOS just refused, the Independent Assessor was brushed aside when the Principal Ombudsman said he would not accept any recommendation the Independent Assessor might make
So where are we now ?

Despite three years of arguments with the FOS, on top of months of earlier discussions with the Bank, the compensation is £4800 below what would have been awarded if the FOS had applied their own guidelines to the case.

They will not explain why the guidelines are not applicable to this case and refuse to discuss it further.

Here are some further issues which arose in my case:

  • Incompetent staff ! 
  • Failure to follow their own guidelines or even tell me that they had guidelines, thus causing me to accept a binding decision I would otherwise have rejected.
  • Baffling reasoning and decision making
  • Unwillingness to explain their reasons
  • Unwillingness to admit a very experienced Ombudsman has made a mistake. They admit a mistake, but cannot admit it was the Ombudsman himself who was wrong. (In a system with no appeals process, they simply can't admit that Ombudsmen can make mistakes !). In the end, the Principal Ombudsman decided to pin the blame on an FOS department which was not involved in the flawed decision
  • Not treating both sides of the dispute equally
  • Lack of a meaningful independent regulator or any means to appeal (or even question or review) a final decision. FOS decline to answer their own Independent Assessor when he asked them to review the interest rate used to arrive at the compensation and, perhaps even worse, the Independent Assessor just allowed them to get away with this refusal, despite having the power to force them to answer him. Why did he bother to ask, I wonder ? In fact why have an Independent Assessor at all, if he can just be ignored ?
  • Huge delays
  • FOS decided an 84 year old woman who had inherited a share portfolio and never traded was an experienced investor
  • FOS decided that advice for an 84 year old, unwell, woman to remove money from a building society for investment with the firm, and leave only 7% of her savings in cash was perfectly acceptable. This is despite my professional adviser's report to the Ombudsman, saying that the bank was negligent to offer such advice, which would have caused a failure if offered as an answer to a question in a basic IFA examination.
  • FOS publish guidelines for firms and consumers on tax and interest rates to be used in compensation calculations, but the Chief Ombudsman says these do not apply to the FOS itself. Why have guidelines in this case ?
  • FOS just accepted the firm's compensation calculations without checking them properly (thus missing a tax error which, in the end was partly repaid by FOS themselves). It seems that FOS policy is to use its own guidelines if it has to calculate a compensation figure itself, but not to use them when the firm offers a settlement.
  • FOS accepted the bank's offer, which did not comply with their own guidelines, but will not explain to me why the guidelines should not apply in my Aunt's case, despite the bank's offer falling £8000 below the guideline requirements.
  • For the benefit of FOS staff who can't believe what their colleagues did, the Case Reference number is 5156222/KM/46
EVIDENCE for what I say about my Aunt's case, is all confirmed in writing in the three inch thick file of letters and dozens of emails from
he Bank
The Adjudicator
The Ombudsman
The Service Review Team
The Service Review Manager
The Independent Assessor
The Principal Ombudsman
Chief Ombudsman
My Aunt's MP

FOS policy on explanations
"We aim to give clear, jargon-free reasons for our decisions - so that any fair-minded person can understand why we reached a particular conclusion."

"FOS Aims and Values"

Regardless of the values stated above and despite asking many times, I have never received a proper explanation from anyone at FOS explaining how the Ombudsman's acceptance of the bank's offer of interest paid at bare base rate could properly compensate my Aunt when a higher rate was available on any High Street and when FOS guidelines require base rate plus 1%

What FOS Guidelines actually say about interest rate to be used

"For cases where the alternative suitable investment is not known, we are likely to require the firm to calculate the difference between how the unsuitable investment actually performed and how some alternative suitable investment would have performed to date – assuming a return on the amount invested equivalent to the Bank of England base rates during the relevant period + 1%, compounded yearly from the date of investment.
In both cases, the redress is for the investment loss. The law does not require a firm to deduct tax." (see quotations 1,2,3 above about tax !)

A quick guide to calculating redress in investment complaints

"Even where it is not possible to establish exactly what the customers would otherwise have done with their money, we can make a reasonable assumption that they would have earned a reasonable rate of return. So we require the firm to return the sum originally invested, together with an award to compensate the customer for the amount they would have earned on that original investment. We calculate this as interest using the Bank of England base rate plus 1 per cent per year."
FOS Ombudsman News 37

What the Independent Assessor had to say about the interest rate

" I consider that there is some force in the points you make in your letter, in particular the fact that a shortfall in compensation of approximately £4800, as a result of the interest rate element in the firm's offer being calculated at bank rate rather than bank rate + 1%, can hardly be regarded as an insignificant amount and therefore reasonable compensation in the circumstances"

" I was initially optimistic that the FOS might have been prepared to settle the matter to Mrs xxx's and your satisfaction. However the response I have received from the Principal Ombudsman has left me in no doubt that FOS would not have accepted any recommendation I might have made on the interest rate issue."

FOS appeals policy.
No independent appeals are possible...but...FOS suggests in Ombudsman News 87 that asking for a case to be reviewed by an Ombudsman constitutes an 'appeal' against the Adjudicator's view. Hmmm... I am not sure that a 'review' by a more senior staff member actually means an independent review has taken place. (In my case the Ombudsman missed the same £4000 tax error as the Adjudicator which makes a salient point about the quality of the appeal).

But surely passing a case to an Ombudsman because the Adjudicator is incapable of handling it properly cannot be regarded as an appeal. If this happens only one competent person has assessed the case and no further review is then possible

FOS Ombudsman gets it wrong !   
' The Times ' updates its story

  • Money stolen from Bank Account
  • Bank says consumer at fault, Consumer knows she is innocent, goes to FOS
  • FOS accepts banks view, consumer knows its wrong but the Ombudsman's decision is final
  • BUT LATER ... Bank employee found to be a fraudster
  • Consumer NOT at fault
  • Ombudsman got it wrong
  • Bank eventually repays money, but consumer has paid £3000 in court fees etc unnecessarily
  • That's why an appeals process is needed at FOS
  • Can the consumer appeal ? Well, technically no appeals system exists at FOS but perhaps as a result of new information in the Independent Assessor's annual report 2009/10 there may be a loophole available

5 out of 6 complaints ( 760,000 ) resolved by Customer Service staff are not referred to Adjudicator or Ombudsman.  The FOS Annual Review says they are handled using "the most effective call-centre technology with the best personalised customer service" ......... "As a result of our focus on resolving as many enquiries as possible at this early stage, only around one in six potential complaints raised with our consumer helpline during the year went on to become a case needing the involvement of an adjudicator or ombudsman."

About 600 FOS staff (40%) were recruited in the year to June 2010...I would be interested to learn how much training this large number of new recruits received, especially those who were destined to become Adjudicators. The FOS Annual Review says this about training. "During the year our staff spent .......an average of 4 days of training for each employee ......... This training included tailored induction-courses for new starters, technical refresher training for experienced adjudicators and a range of management workshops."


A few FOS cases may now be re-opened. In his final Annual Review, the departing Independent Assessor mentions the (very few ) circumstances in which an FOS case may be re-opened. This seems to be new information, I have certainly not seen it published before. Perhaps a delayed response to Lord Hunt's suggestions in this area.

29 Nov 2013 ... Further FOI question about FOS encryption keys

Not sure what all this is about, but the story is on the excellent
"What do they know" website

29 Nov 2013 ... 'Bias' perception haunting FOS, says lawyer

Oh dear !...but don't worry it's the Australian FOS !

Not helped, it seems, by the way the Aussie FOS apparently assists consumers to make claims

Story in InvestorDaily

28 Nov 2013 ... Independent Scotland would set up its own FOS !

Interesting article in MoneyMarketing says independent Scotland would be a nightmare for advisers

21 Nov 2013 ... The impartiality of the Financial Ombudsman Service has been questioned by a claimant who has been in dispute with the service for several years.

This is another story suggesting the FOS is not assertive in dealing with large Insurers. Interestingly...

"A spokesman for the Ombudsman said it could not comment on individual cases, however, a copy of the claim response, seen by Financial Adviser, suggested that the Ombudsman was only obliged to consider the crux of a complaint, and suggested that specific allegations, including negligence, mental stress and breach of FSA principles should be taken to a court instead."

Full story in FT Adviser

14 Nov 2013 ... FOS provides details of waiting times for cases to begin and be allocated to Ombudsmen

FOS have provided:

  • Average waiting time for cases to begin investigation
  • Average waiting time for Ombudsman to take case after adjudicator stage
  • How many cases went to an Ombudsman without adjudicator's opinion (72 last year)

The answer also says 2000 staff have been hired and trained by FOS in the last 18 months.

Some of these times are pretty long...but the FOS letter explains why !

FOS's response letter
FOS's attached data with waiting times statistics

14 Nov 2013 ... Advisers concerned about FOS and simplified advice

Advisers need guarantees from the Financial Ombudsman Service that it will treat complaints about simplified advice fairly before the industry can begin to address the advice gap, says Personal Finance Society president David Ingram.

Article in MoneyMarketing

8 Nov 2013 ... FOS rejects Freedom of Information request as "vexatious" and declines to answer. FOS says no Adjudicator process manual or handbook exists.

Since the end of July FOS has been handling FOI requests from a person called lily. Some answers have been given, including the advice that FOS does not have an Adjudicator process handbook or manual (which were requested under the FOI Act). It seems training provided for case-handlers focuses on technical knowledge and "soft skills". What are soft skills ?

Various other requests have been made about FOS's compliance with the Freedom of Information Act and the actions of the Independent Assessor. FOS says these are not in themselves "patently" vexatious, however they think the requests are being made by a group of individuals acting in concert. This apparently is vexatious and FOS have sent a response declining the information requested. Their letter of 7th November explains their reasoning.

Its all a bit complicated but the full story of this FOI request and FOS's responses is available on the "What do they know website" which is an excellent website which allows anyone to make an FOI request to many public bodies and the request and answer are published on the site...can be very interesting !

This case in detail on What do they know
What do they know general FOS section
What are soft skills ?

24 Oct 2013 ... 12 reasons FOS won't investigate a complaint

Just because a firm has the FOS logo on its paperwork does not mean all its products are covered by FOS.

Full story in The Telegraph

29 Sep 2013 ... What makes an ombudsman ?
What is best...financial expert or judge ?

An interesting article discusses the Chief Ombudsman's reported recent comments on the cost of giving adjudicators financial qualifications, and the skills they actually need (according to Natalie they need the skills of a judge not a financial expert). The article disusses what skills a judge needs and compares these with the FOS requirements. See the quotes below for a taste.

"The FOS’s chief executive recently said that forcing all her staff to be ‘as qualified as ombudsmen’ would lead to a quadrupling of case fees – a mathematical nonsense that I can’t be bothered to actually challenge here."

"Explaining herself, she noted that the required skill set is that of a judge, not a financial expert. Which led me to wonder about the qualifications actually required of a judge?"

"Compare yourself with judges, not with financial experts, if you want. But either way, it’s a high standard, and advisers would respect the Ombudsman’s decisions more if he walked the talk and judged us with appropriate expertise on the subject matter"

38% of FOS Ombudsmen are actually lawyers and Natalie told a parliamentary committee that FOS was one of the country's biggest employers of law graduates.

Read the full article in IFA Magazine

29 Sep 2013 ... UPDATE UKIP MEP calls for FOS staff to be as qualified as the people they are adjudicating

MoneyMarketing has this story
" UKIP financial services spokesman and MEP Godfrey Bloom has launched a blistering attack on the Financial Ombudsman Service for not making its staff hold financial qualifications."

"Speaking to Money Marketing ahead of the UKIP annual conference in London today, Bloom called for FOS staff to be as qualified as the people they are adjudicating and branded the lack of financial qualifications at the FOS as “immoral”." (Mr Bloom is now standing as an independent.)

This is intended to protect IFAs, who have long protested the fact that they have to be qualified and FOS staff do not...BUT...it is undoubtedly the case that qualified staff would also benefit complainants.

The Chief Ombudsman recently said "staff receive training in certain products but can’t be expected to have financial qualifications alongside judging skills". “There is also utterly no way on earth I could hire 1,000 staff with financial qualifications this year on the salaries I’m paying, zero chance". These comments have raised a storm of protest from advisers, some of whom have asked why she does not just hire qualified staff in the first place ? (perhaps instead of law graduates...38% of ombudsmen are lawyers).

There has also been comment about how Ms Ceeney's calculations have arrived at the need to quadruple the FOS case fee. See the box below (21 Sep)

The IFS has launched an updated version of its Level-3 Certificate in Regulated Complaints Handling with extra empasis on PPI. Perhaps FOS staff should have this qualification

Full UKIP story in MoneyMarketing
MoneyMarketing website with Chief Ombudsman's comments
New qualification story in MoneyMarketing
Comment on calculations and FOS skill sets in IFA Magazine

21 Sep 2013 ... What did the Chief Ombudsman mean when she said giving adjudicators financial qualifications would quadruple the case fee (from £550 to £2000) ?

One commentator has pointed out that if an adjudicator handles 100 [fee charging] cases a year and the case fee rises by £1450 per case, this will bring in £145,000 extra each. Is this really the cost of gaining an appropriate financial qualification ?

And if the adjudicator does 200 cases a year it would be £290,000 each....and so on... Ms Ceeney has a Cambridge honours mathematics degree so I doubt she has her sums wrong, but something does not seem to add up ?

Comments with the calculations in MoneyMarketing
Comment on calculations and FOS skill sets in IFA Magazine

19 Sep 2013... Education is key for FOS staff, but FOS still like legal experience. 38% of ombudsmen are lawyers
Natalie Ceeney recently commented that if FOS was forced to employ qualified adjudicators or if current adjudicators were required to gain financial qualifications, review fees would quadruple have upset the industry

The comment that appears to have angered financial advisers most was where Ceeney said, “we are not giving financial advice, we are judging. “Judges are lawyers and not financial experts because that is the skill set.”

"Adjudicators have no financial qualifications, nor legal qualifications"
One financial adviser comment summed up the general feeling of the industry as, “not only do adjudicators at FOS have no financial qualifications, neither do they have any legal qualifications and are not lawyers or judges as Ceeney seems to suggest.” That may not be true...at a recent parliamentary hearing, Ms Ceeney confirmed that FOS was one of the country's largest employers of legal graduates, but being a graduate does not mean experience of course...few legal graduates actually work in the legal professions ( many are at FOS !)

38% of ombudsmen are lawyers
A current (Sept 2013) advert for Ombudsmen, seems to prefer legal to financial skills...see the panel below...and this is backed up by a look at the FOS ombudsman list which shows that around 38% of Ombudsmen are or were solicitors, barristers or lawyers.

New PPI qualification
The IFS has launched an updated version of its Level-3 Certificate in Regulated Complaints Handling. The qualification is designed for those who have responsibility for regulated complaints handling in retail financial services and includes new info on PPI. Whether FOS PPI adjudicators will be required to hold this qualification is not mentioned.

FOS panel of Ombudsmen
Article about the issues in mortgagestrategy website
MoneyMarketing website article
More comments on MortgageIntroducer website
New financial qualification story

Video of the entire parliamentary meeting (if not visible...select "silverlight" at the bottom). The questions about qualifications start at about 10.02.
Uncorrected transcript of the Treasury Committee meeting (Q27 to Q34 cover the "qualifications" questions)

19 Sep 2013... FOS says 'no qualifications necessary’ for new ombudsmen...but...
A job advertisement on FOS website says ombudsman can earn up to £85,537 and require no qualifications, according to the FT. But its not quite like that...

The latest Ombudsman job description seems more interested in law than in financial knowledge or qualifications...“We have legally binding powers so you’ll need to have - or develop - expertise in the relevant areas of law. We welcome experience in law, quasi-judicial environments or dispute resolution. “Knowledge and expertise in relevant financial services products may be an advantage.

Full story in FT Adviser
FOS ombudsman job description

05 Sep 2013... FOS page on Wikipedia receives a major update...perhaps by FOS itself ?

The Wikipedia page on FOS has been out of date for years, with few changes and/or updates. But on 2nd September 2013 a large number of changes were made. Over 1000 words were changed to 10 or so paragraphs. Wikipedia can be changed by anyone, and often only the IP address of the writer gives a clue as to who is doing the changes. But in this case the revision history tells us that a person with the "name" PhilKnight made the changes. PhilKnight seems to be an approved person of some sort at Wikipedia and seems to have authority not available to most.

"Conflict of interests"
The recent changes seem to have been made at the request of a person called "Shane", who contacted PhilKnight. Shane says he was in touch about making a few changes "to our article" and "Because of conflict of interests, I dont want to make the changes myself" and "I've put together a document with the corrections and edits we'd like to make"

I have no idea what all this means, but it does look as though "Shane" (whoever he is) has colleagues with an agenda to change the FOS pages without actually doing it themselves or revealing their IP address. If it is indeed FOS, then it may show a new policy because FOS has certainly allowed its Wikipedia page to exist for years whilst full of mistakes.

One interesting change which caught my attention is the removal of a comment in the "Criticism" section that 35% of ombudsmen are solicitors, without an updated figure being added. Actually about 38% of ombudsman are (or were) solicitors, barristers of other lawyers.

Always take care when using Wikipedia.

Wikipedia FOS page
Wikipedia revision history
Wikipedia page about PhilKnight
Chat (User talk) between PhilKnight and Shane
(this shows the changes made)

05 Sep 2013... FOS revamps its "on-line technical resource pages

Much the same really, but some new sections and better layout
FOS online technical resource

03 Sep2013 ... UPDATE...Natalie talks on video about the "glass ceiling" in financial services.

The interview is a story in International Business Times. There is a video interview about breaking the glass ceiling and latest developments at the FOS.

IB Times article (Video now available)
"Glass ceiling"

30 Aug 2013 ... UPDATE...Financial Advisers start
e-petition to draw attention to the lack of a long stop for FOS investigations

This issue has been around for a long time. Financial Advisers are not afforded the same protection as other professions such as lawyers and doctors - instead they remain liable for advice indefinitely. The profession is now starting an e-petition to get a debate on this in Parliament.

UPDATE The FSCS has confirmed that it does comply with the 15 year rule and Money Mareting has a second article, pointing out that the FOS does not. An FOS spokesman said: “We have our own timeframes as laid out by the regulator. The FSCS is a different organisation and is guided by different rules.”

Read the first article in MoneyMarketing
Read the second article in MoneyMarketing
Read the actual petition (and maybe sign it ?)

28 Aug 2013 ... "The Financial Ombudsman Service has now decided to come clean about something that all financial advisers have known for sometime – that many, if not most, of its adjudicators are not qualified"

FT website has the above quotation, with further damning criticism of FOS staff

Read the full article here

16 Aug 2013 ... FOS finds against Barclays but it did not pay up 'til The Observer intervened !

The power of the press !...
"FOS warned that it may take Barclays longer than usual to respond due to the "high level of complaints" it is receiving. Luckily, Barclays seems more afraid of The Observer than the FOS and decided, shortly after [The Observer] made contact, that it owes you £35,300, which it has now refunded."

"Meanwhile, if more customers armed with an FOS ruling started taking the matter to the small claims court, Barclays might have to get its act together. The ombudsman also needs to be doing more to get the banks to pay up in cases like this." [The Guardian 24 Aug. see link below]

Article in the Guardian/Observer
Another case in The Guardian

15 Aug 2013 ... FOS finds against adviser on "execution only" sale

Financial services can be provided on an execution only basis, in which case the client takes responsibility for the products purchased, not the adviser (since he has offered no advice).

According to a fascinating story in FT Adviser, FOS has found against an IFA even though he offered no advice. There is more to it than that of course as it appears the IFA submitted a bill for his services, £210, "for advising in this matter", even though it seems he did not provide advice !

What next ? IFA insurance costs will increase and some advisers may decline to allow their services to be used for execution only sales on the basis that if they can be found guilty without giving advice, they will be less likely to get into trouble by advising the client and thus influencing the product chosen.

FTAdviser story with all details
FOS published decisions details (I can't find the case above)

18 Jul 2013 ... FOS branded ‘unfair’ over complaint decision

FTAdviser has a story that the Financial Ombudsman Service has failed a dyslexic man who allegedly also suffers from learning difficulties after dismissing a complaint that HSBC acted as an irresponsible lender towards him, a relative has claimed. It seems a loan of £2700 eventually reached £20,000. It seems it took 6 years to handle this case.

As part of the story a FOS spokesman confirmed that the level of adjudicators' qualifications can vary. In another case, I have recently hear from someone who asked an adjudicator what her qualifications were to handle a complex pensions case and the adjudicator refused to say. Defensive and not the most helpful response nor, of course, reassuring that the case would get a properly qualified hearing.

Full story from FT Adviser

15 Jul 2013 ... FOS in talks with IFAs over inconsistent case verdicts

The director general of the Association of Professional Financial Advisers says some decisions are inconsistent, meaning similar cases achieved different outcomes depending on who from the FOS adjudicated.

Full article and details from IFAonline

25 Jun 2013 ... Natalie returns from bootcamp... the woman of last resort for customers fleeced by banks.

This article in the Mail on Sunday, perhaps says more about the Mail than it does about Natalie and the FOS, but it does have some information and a new picture. For instance FOS now has 3500 staff, up from 1200 when Natalie took over 3 years ago, and they are recruiting 40 people a week. Would be adjudicators are apparently queueing at reception !   Lets hope they are keeping the noise down, as required by the adjudicators' induction programme (p29)

1000 more staff by October
A source "close to FOS" told IB Times that FOS aims to hire 1000 people by October 2013 and FOS will reassess the situation then to see if even more are required. It seems the big banks have recruited 20,000 staff to deal with the PPI crisis. The FOS "source" said "We are not-for-profit so we can't compete with banks on pay but we motivate our workers by investing in them, through fixed -periods and training and development."

Mail on Sunday article
International Business Times
FOS adjudicators' induction programme

20 Jun 2013 ...
FOS needs to reform fees says Parliamentary banking commission

The commission says if the FOS finds banks have handled an initial complaint well and dismisses it, the complaint fee should be waived as an incentive.

Money Marketing article
Parlimentary commission on banking standards

13 Jun 2013 ... Attack is the best form of defence...
why firms use lawyers to put their case

The article I link to below has advice for firms facing a claim of mortgage mis-selling. I wont repeat it all but I highlight the final paragraph "and if a claim does reach the FOS..."   The advice is to use a lawyer's experience and knowledge to make the stongest possible defence to FOS.

This highlights one of the main problems for claimants using FOS, the service's preference that you put your case in your own words, and in any case FOS won't pay your lawyer's costs even if you win.

So the problem is obvious, the firm has a lawyer, an expert in the field, the claimant has his own wits. Who do you think will put the better case ?  No doubt FOS will argue that their adjudicators are not influenced by presentataion, but can that really be true ?  In my experience, good presentation is half the battle in most things where you want to get your point across. And if the adjudicator is a new graduate, on his first real job, with little experience of life or the financial world and without expert knowledge of all the various financial products, I know wher I would put my money in a cas where the issues were not clear.

EXAMPLE: In my own case the FOS adjudicator wrote to me summing up the issues, included two points from my written evidence but omitted several others. She also added two points I had not made at all, one of them trivial which had been dropped by me years before, but which still appeared in the firm's evidence. She therefore used the firm's evidence, rather than mine, to assess my case. She did apologise, but the standards applied are obvious. She was influenced by a professional presentation by the firms experts...It's not a good system !

Article in financialreporter
My case in full, evidence to the Hunt Review of FOS

13 Jun 2013 ... UPDATE
FOS wins again at judicial review !  Not really a win but the application for a JR was refused.

The FOS always wins at JR. This case involves an IFA, John Calland, and has lasted for over 6 years and is very complex, involving things that happened 20 years ago. The case was an application for a JR of an FOS decision regarding pension advice. The judgement disusses (among many other things) the right to an oral hearing (or not) and the time taken to handle the dispute. FOS rarely allow oral hearings, though much time and argument might be saved if they did.

Interestingly, the matter was twice referred to the FOS independent assessor (2 different assessors) and on the first occasion the IA said the complaint against Mr Calland had effectively been solicited and the second commented that she could not be satisfied “that this has been a well and firmly managed investigation” (by FOS) so there does seems to be some admission that all was not well.

Mr Calland's JR was refused and he was ordered to pay £35,000 of FOS costs. ( A stark warning for anyone even thinking of starting a JR against FOS !) Mr Calland has now decided to appeal.

Some time ago Mr Calland also commenced action against the FSA for harrassment and the FSA applied to have the case struck off. A hearing took place on 28/11/2012. I have not seen the judgement from that hearing.

Calland JR judgement by Mr Justice Males (full text)
FT Adviser view summarising the JR case
Money Marketing on the decision to appeal
Money Marketing article on the separate harassment case

29 May 2013 ... FOS board minutes published for 24th April meeting.

Once again the board met away from FOS HQ.  
This time the venue was Exchange Tower which is just round the corner and is where FOS is moving soon, into an initial 165,000 sq ft. space.
The board discussed (among other things) the influx of new staff and how training these had stretched resources and affected performance.
Natalie Ceeney has told The Telegraph that FOS is to hire a further 1000 staff "in the next six months" so these will have to be trained up too.

April 24th board minutes
All board minutes
Exchange Tower
Telegraph Article dated 29th May 2013

29 May 2013 ... FOS publishes it's Annual Review

FOS has just published this lengthy and complex survey of the service during the last year 2012-13.

Whilst it's full of information, it is heavily biased towards statistics. Statistics about every conceivable aspect of the service are constantly presented with coloured graphs and presentations of everything under the sun. Many of these stats are of little real interest and say little about the service. It's a major work, but frankly a much smaller document with a more focused approach would be much easier for most people to assimilate. I am not sure precisely who the revbeiw is aimed at, but I suspect not many ordinary people will wade through 180 pages of statistics.

The board's Annual Report is a separate document, to be published later.

The review is available in 2 formats, pdf and online.
An easy way to get to what you want is to seach the document. To do this download the review onto your PC as a .pdf and use the .pdf search facilities. If you use the online version, Internet Explorer and Chrome browsers (and maybe others) open up a small "search" box if you press the F3 key. Much easier than wading through 180 pages !

There is huge press coverage of the review...just use Google !

24 May 2013... FOS Independent Assessor's web page gets a makeover... but little has changed

The Independent Assessor has 2 web pages. The first is the formal FOS web page, part of the FOS website with her terms of reference etc. The second is her personal web page, this was introduced by the outgoing IA, Mrs Costelloe-Baker. This second page is supposed to be the IA's own page...this has had a makeover... it was written in the first tense (You can complaint to me etc.) but for some reason its been changed to the third tense (You can complaint to the independent assessor etc.) Not much else seems to have changed. The page has its own independent domain name (http://www.independent-assessor.org.uk) but its actually registered to FOS so its not so independent as it seems and the IA does not use her own "@independent-assessor.org" email but prefers the FOS address "@financial-ombudsman.org.uk".

The Independent Assessor is a highly paid position at FOS (£112k pa pro rata for three days week, though she only has to turn up at FOS HQ on one day a week). The IA is appointed and paid by the FOS board and there have been concerns about whether this process is sufficiently independent.  The job is to act as a final appeal for FOS "service" complaints, there is no appeal process for ombudsmens' decisions and the IA is not permitted to even comment on these. The post has little authority as the holder can only make recommendations and FOS is not required to accept these. Actually no IA's recommendation has ever been refused in 10 years or more. In 2012-13 the IA issued 268 "formal opinions" most of which were for financial compensation for avoidable distress and inconvenience with sums ranging from £25 to £850 with an average of £267.

Amerdeep Somal has been appointed as the new FOS Independent Assessor. It seems Ms Sopal is a commissioner and board member at the Independent Police Complaints Commission, a judge at the Immigration and Asylum Tribunal and public appointments assessor at the Office of the Commissioner for Public Appointments so she will clearly be busy fitting in her 3 days a week for the FOS. (In fact Ms Sopal no longer has operational responsibility at the IPCC and ceases to be a commissioner in Autumn 2013).

New Independent Assessor (FOS info)
IPCC page on Ms Sopal
LinkedIn profile
Interesting interview and profile of Ms Sopal (justice fighter !)
The last IA's annual report (2011-12)
Independent Assessor's terms of reference
My views and experience of the Independent Assessor's role at FOS

17 May 2013 ...
Now FOS need part time adjudicators

This requirement appeared on the internet but is not on the FOS careers website at the time of writing. You saw it first here !

Part time adjudicators needed
FOS careers web page
FOS adjudicator's induction programme (big file to download 20MB)
Thinking of applying ?...Try the questionnaire first !

16 May 2013 ...
Natalie's talk to IFAs...no details published

This talk was expected to produce some fireworks. Many IFAs don't think much of some aspects of FOS. But nothing heard ! The FOS speeches page seems a bit out of date.

Details of the planned meeting on Citywire
FOS speeches and presentations

13 May 2013 ...
Youngest FOS adjudicator is 19 yrs old

Another snippet of information about FOS was revealed when a FOI request asked for the age of adjudicators and ombudsmen. There has been concern about the experience and qualifications of adjudicators and Natalie recently revealed at a Parlimentary Committee meeting that FOS was one of the largest employers of legal graduates.

It appears the youngest adjudicator (out of 1731 currently) is 19 yrs old. The FOI answer says the adjudicator figures do not include "contingent staff" or "PPI consultants" so the youngest adjudicator appears to be on a permanent contract.

Such young people must be talented to get appointed to such a responsible position, but what experience do they have of the real world, property, mortgages, insurance, pensions, investments, travel ?  And putting the case for the banks and financial businesses are the professional case handlers who know their products backwards.

LATEST FOR FOS ADJUDICATORS. Don't stay at FOS on low pay as an adjudicator !...make a career change to airline pilot. Just the small matter of the training course to pass first I suppose...but........
Ryanair have recruited a 19 year old pilot.

NB. The FOI answer also says there are 37 "Fee Paid Ombudsmen" but we know nothing more about these.

Full FOI answer with age breakdown and averages

13 May 2013 ... "Insurance Law and the Financial Ombudsman Service" by Dr Judith P Summer

A reader of this website has drawn my attention to the existence of this book. At £280 a copy it is unlikely to be a best seller, but if you have a high value case against an insurance company it may be worth trying to find a copy in a library or even buy it (it is available more cheaply for the kindle and you can read the first 30 pages or so as a sample on the Amazon web site).

I can't comment on the contents, but a review of the book is available from Melissa Collett, who is an FOS Ombudsman of some seniority. It may be worthy of note that the foreword was written by Walter Merricks, ex Chief Ombudsman, who comments that the book will be a useful reference for the FOS itself !

It was printed in 2010, so may be a little out of date unless there has been a re-print. The FOS can now award £150,000 and a recent court case means it may be possible to take a firm to court even after accepting an ombudsman's decision, though this is being appealled.

Melissa Collett's review

21 May 2013 ...Update FOS to recruit 4 new senior managers on very high salaries.

The FOS is seeking:

Senior policy manager - stakeholder management  £85k
Senior policy manager – public policy   £85k
Chief of staff    £90-100k
HR business partner (senior/lead) £50k

All plus a flexible benefits plan, medical insurance, pension scheme, training and development, childcare, dental package, holiday package.

No wonder the case fee is rising from £500 to £550 !

FOS careers web page

01 May 2013... Banks tactics and the FOS

An interesting article in IFAonline discusses the banks' tactics and emphasises the need for a free financial ombudsman service. Its a balanced article but I pick up on one point which is sometimes overlooked.

The writer tells us that "the banks are master tacticians when the merits of their cases are perhaps questionable". This is well known, the banks and other finanancial businesses have dedicated specialist departments to handle complaints. Their experts know their financial products well and put up a good case from their point of view.

However the poor consumer is not so well equipped. With complex products an expert argument is difficult to put unless you are an expert too, and this is rarely the case. Against this background, FOS prefers a complainant to put their case in their own words and won't pay for professional advice even if the complainant wins the case. So most people put their own case as best they can.

When the case reaches FOS, an adjudicator has to weigh up the merits of the professional and amateur arguments. Surely the firms have an advantage here especially if the adjudicator is one of FOS's inexperienced new young recruits, perhaps with little experience of pensions, investments, mortgages, insurance etc. Thus the current system is weighted in favour of the firms.

Mind you, getting professional help may not be much use, my professional adviser said that the advice received would have caused a failure had it been offered in the examination for the financial planning certificate ( a low level financial exam), but the Ombudsman thought the advice was just fine. My adviser stated for a widow of 84yrs of age it was was negligent to advise leaving 7% of savings in cash whilst 93% was invested, but the Ombudsman saw nothing wrong with it. And that's not half of it !

Article in IFAonline
My case

01 May 2013... Natalie speaks, critical of FSA and financial businesses.

As usual, the latest edition of "Ombudsman News" has a foreword from the FOS Chief Executive, Natalie Ceeney. This time she critices the FSA (now gone of course) for light touch regulation which is "widely acknowledged" to have caused problems in the past. She also suggests that lack of pragmatism by businesses causes problems to escalate.

But many ordinary people may pick up on her reminder that FOS is not a regulator and does not fine or discipline financial businesses. Hmmmm... I think many ordinary folk would like to see that changed. Currently no matter how disgracefully a business has behaved it won't be criticised or punished by FOS. This is something which surprises many people.

Natalie's comments have drawn some responses from the industry, see below

Ombudsman News issue 109
FT Adviser
Citywire article (with comments from the industry)

01 May 2013...
"FOS gave poor advice in ‘unfair’ ruling"

An article in FT Adviser had this story last month.

"The Financial Ombudsman Service appears to be acting above the law and giving poor financial recommendations, a former chartered adviser has claimed, after a ruling demanded he compensate a client for poor advice despite placing him into a better-performing drawdown product"

As usual there is more to this than the headline, but it does look as though the ombudsman has instructed that a particular pension financial product should have been used. Whether the ombudsman has financial qualifications to offer advice of this sort is not stated but it does appear from his previous jobs that he did have some financial experience as an actuary (before he was appointed as ombudsman 9 years ago !).

Full story in FT Adviser

22 Apr 2013...Freedom of information request give information on average time to resolve complaints ...it's 188 days.

In a recent FoIA request, FOS says in the financial year 2011/2012, the mean time taken to resolve a complaint was 188 days. The median time take to resolve a complaint was 118 days and these figures do not include PPI.

FoIA request in full
Whats the difference between mean and median

13 Apr 2013...Another forum thread critical of FOS

The writer of this post suggests that the adjudicator "did not bother to read my information" and the ombudsman only gave "my case a cursory glance".

Read the original post and comments on moneysavingexpert

11 Apr 2013... The cosy world of ombudsmen

I am currently battling with the Legal Ombudsman (and Solicitors Regulation Authority) regarding the way the will of my Aunt was handled by solicitors. This is the same old lady whose case I took to the FOS with little success. There is much in common between the LeO and FOS, in particular the unappealable decisions and difficulty of criticising the ombudsmen, who are far too powerful. I may write more about the LeO when my letter to the Chair of the board has been answered.

I notice that David Thomas, a Lead Ombudsman at FOS is also Board Member at the Legal Ombudsman (LeO say he retired from FOS in 2012, though he continues to advise part-time, but FOS lists him as current Lead Ombudsman - Strategy).

I also find that Walter Merricks, who was Chief Ombudsman at FOS for 10 years is now Service Complaint Adjudicator at the Legal Ombudsman and also a board member of "Ombudsman Services" which handles complaints about communications, energy, property, and copyright licensing.

11 Apr 2013...Two board members left in Feb 2012

Roger Sanders and Elaine Kempson's terms as FOS boad members ended in February. The FOS website does not list replacements. Natalie Ceeney at her appearance at the Parliamentary Treasury Committee on 29 Oct 2012 said the board was to be reduced from 9 to 5 people, plus chairman, so the current board may be the final group. Ms Ceeney was being questioned by John Thurso MP about the board's unusual structure.

Video of the entire meeting (if not visible...select "silverlight" at the bottom)
(Uncorrected) transcript of the Treasury Committee meeting

28 Mar 2013... UPDATE FOS declares a Freedom of Information request about complaints forms for disabled people to be vexatious and of "uncertain purpose and dubious value" and declines to provide the information !

Mr/Ms B Whittle has made a number of request for information about FOS matters, using the "What do they know" website which allows members of the public an easy way to use the FoIA, where both the question or answer is public and published for all to see. Some recent requests, including a request to publish responses to all Freedom of Information requests, has been refused as vexatious and of dubious value despite having published 30 FoIA responses in reply to a similar request recently. FOS say...

"We have limited resources and repeated requests for information of uncertain purpose and dubious value distract us from achieving our statutory functions"

I am not aware that a requirement of the FoIA is that the questioner should state the purpose of the request, and the "dubious value" suggestion is an opinion of an FOS employee which may not be shared by other people or the public. The FOS declines a lot of FoIA requests, see the "what do they know website" link below.   The full FOS letter with the above comments can be read here.

On 27 March FOS issued a further letter declining Mr/s Whittle's request to know whether the FOS complaints form is available in alternative formats for disabled people. FOS say this request is of "uncertain purpose and dubious value" and decline to provide an answer.   The second FOS letter is available here

You can see all FoIA request made to FOS via "What do they know" here. Note that it has a facility to "follow" the page and be informed by email of all new FOS FoIA requests made via the website. At the time of writing the latest request is for details of the structure and positions with the FOS legal department.

28 Mar 2013... Is the financial ombudsman service independent ?

Another internet website criticising FOS. I am not sure how balanced this is but it does make an interesting read as shows that there are others out there who are concerned about FOS.

Full article is here

18 Mar 2013... Financial Conduct Authority should be strangled at birth. Important paper from the Adam Smith Institute deals with FOS problems too

This article is too long to summarise here, but its well worth a read for those concerned about the changes to financial regulation which are on the way. The authors offer some suggest changes to FOS. The suggestion below is well overdue, currently we have no idea of the overall quality of FOS decisions which leads to the Ombudsmen's belief that they are infallible because any errors are kept secret. Unlike Adam Smith, I would say there is a case for appeals, possibly via an empowered Independent Assessor who could decide if an appeal should be allowed in individual cases.

"The quality and consistency of FOS decision-making should be subject to some form of annual independent review by a qualified academic or accountant. They should report on the quality of determinations and their factual accuracy. They should look for signs of bias. Whilst financial service providers should not be able to appeal individual cases, they should be able to lodge evidence from their perspective with the reviewer"

Full story

18 Mar 2013... FOS not fit for purpose

Another interesting article from the FT...

"OS has come under fire for seeming to make up its own rules, professionalism of assessors and being dismissive about complaints"

There is also a response from Alan Lakey, a long time critic of FOS entitled
"Brave Government needed to trim claws of FOS"

Full story in FTAdviser
Brave Government needed to trim claws of FOS

14 Mar 2013... FOS take on 1000 extra staff and expect to take 1000 more

FOS outreach mananger Peter Bristow told the ASTL (Association of Short Term Lenders) that FOS had received 350,000 complaints to the end of December 2012 and had taken on 1000 extra staff and was looking to take on 1000 more to deal with PPI cases.

Full story in financial reporter

11 Mar 2013... FOS to start publishing decisions

FOS announce that they will commence publishing Ombudsmans' decisions soon, for various reasons it will be early Summer. Firms' names will be published but not complainants. I wonder if the Ombudsmans' names will be published ? It will be interesting to see if the data will actually be useable. FOS have a good, but massive, website, but publishing 20,000 decisons in a useful format will be a challenge.

Only publishing the Ombudsmen's decisions, means most of the work done by FOS will remain secret. In 2011-12, 222,333 cases were handled by FOS, but only 20,540 went to an ombudsman. It would be very difficult to publish all cases, but the decision to publish only the more complex cases, masks the real workload at FOS which is handled by adjudicators. FOS regards cases which go to Ombudsmen as appeals.

FOS publishing plans

03 Mar 2013... FOS finds in favour of claimant, but insurance company won't pay out !

Even if FOS finds in your favour it does not necessarily mean its all over bar the payout. In a recent story the Daily Mails had to intervene to get the payment finally made. The sum involved was £280,000.

I also know of another case where an insurance company won't settle the case finally though FOS found against them, I am not allowed to give details (yet).

Daily Mail intervenes...full story

03 Mar 2013... Site update after holiday...

The Telegraph suggests staff leaving Barclays due to PPI mis-selling could move to FOS !

Financial Ombudsman "a paper tiger", another consumer's story

FT says financial advisers angered by "seeming anti-adviser bias at FOS"

11 Feb 2013... Virgin One Accounts
A Freedom of Information request reveals that 16 out of 18 referrals to an ombudsman were changed to be in favour of the claimant. How many people did not ask for a referral ?

An FoIA request has been made about a number of cases which have been grouped together and handled by one particular ombudsman. There has been much difficulty in getting the information and the matter ended up being referred to the Information Commissioner.

The questioner makes an interesting point. If 16 out of 18 cases were reversed by the ombudsman, how many people just accepted the adjudicators view without asking for an ombudsman to look at their case, and thus may have unwittingly accepted a wrong adjudicators "view".

Very interesting ! The Information Commissioner's report has lots of good stuff about how FOS handles FoIA cases

Post about this on MoneySavingExpert forum, (scroll to post #1715)
The Information Commissioner's report

11 Feb 2013...
Freedom of Information request refusal challenged

A member of the public asked FOS to publish the six monthly reports from the quality committee to the Independent Assessor and the agenda and minutes of the quality committee.

As is not unusual FOS refused. The complainant has now asked for an internal review of the decision not to publish, on the basis that redaction of sensitive details would allow the bulk to be published. The questioner quoted from guidance from the Information Commissioner

"Even if large parts of a document are exempt, this does not mean
the whole document should automatically be withheld. You should
release any information which does not fall within an exempt
category or does not meet any relevant public interest test.
• In nearly all cases, it will be possible to give the dates and
times of meetings and the names of the organisations represented.
• In most cases, it will be possible to give broad headings of what
was discussed.
• In many cases, it will be fair to give the names of individuals
who attended the meeting in a professional capacity. It may not
always be fair to attribute specific comments or opinions to named

The question, response and request for a review

08 Feb 2013...
FOS/Santander forum on MoneySavingExpert website

This forum is very active with lots about FOS and Santander, including a full FOS decision which is apparently very similar to many others...i.e. alleged to be a cut and paste decision. If you have issues with FOS and Santander its worth a look here. Some posters are suggesting getting together for joint or multiple action, or to get legal opinions or advice. I have not really read this properly but it seems FOS are finding for Santander because they are entitled to change the terms of a contract, but the question really is ...is it fair to make the changes ?   Take a look !


Link to the forum page 85...but look around

06 Feb 2013... New source of financially qualified staff available to FOS

The introduction of RDR has meant that thousands of fully qualified IFAs have left the industry. They have not sat their exams to stay qualified, but they still have a huge wealth of knowledge about the financial products they were recently selling. This rich source of potential FOS adjudicators, ombudsmen and managers is now available to FOS, who were questioned about their lack of financially qualified staff at a recent Parliamentary Committee hearing.

FOS does not seem to be trying to attract these experts at adjudicator level however. The current advert for adjudicators specifically states that knowledge of specific financial services is not required. The salary is unlikely to attract ex IFAs at this level in any case.

But it seems to be different for ombudsmen. When asked by David Ruffler MP at the recent Treasury Committee hearing whether she thought it would be a good idea for FOS staff to have passed financial examinations, Natalie said "no". But recent ombudsman adverts have suggested that knowledge and expertise in financial services products may be an advantage. Whether skilled professionals looking for a change in direction will be attracted by a 3 year fixed contract is another matter.

Adjudicator job description
Ombudsman job description
(Uncorrected) transcript of the Treasury Committee meeting
(Q27 to Q34 cover the "qualifications" questions)

05 Feb 2013...
New Independent Assessor chosen ?
Post appears on website as "recently recruited"

UPDATE 07 Feb Independent Assessor has now been removed from the "recently recruited" part of FOS's careers web page. The site now says they are still "currently recruiting" for the post.

UPDATE 09 Feb Independent Assessor has now been removed from the "currently recruiting" part of FOS's careers web page.

So has the new IA been appointed or not ?
I doubt it,
applications are closed and presumably the shortlist is being compiled despite the confusing information on the FOS careers web page.

FOS careers web page

04 Feb 2013... FOS changes several job adverts to specify 3 year fixed term contracts

The latest FOS careers website page has changed several jobs from "permanent" to "three year fixed term contract". Its not explained why these changes have been introduced but presumably FOS sees an end to it's rapid expansion, nor is it clear whether permanent jobs are still available. Some of the jobs are senior. Jobs now offered on 3 year fixed term (as at 04/02/13) are:
Team Managers

Heads of Casework Teams

FOS careers web page
Randstad website
FOS adjudicator's induction programme
FOS ombudsman's induction programme
Wikijob forum, mostly adjudicators, scroll down
The student room forum, some adjudicators stuff, scroll down for latest

04 Feb 2013... Natalie Ceeney and Tony Boorman appear before the Parliamentary Commission on Banking Standards Joint Committee

Video of the appearance, about 1 1/2 hours of discussion
Comments by James Dean in The Times

29 Jan 2013... FoIA request asks to see "draft board minutes"

A Freedom of Information request has asked FOS to publish its draft board minutes so that these can be compared with the final published minutes. The writer previously asked for publication of the board quality committee minutes, but this was refused. If the board wants to maintain secrecy about the quality committee is must now be careful not do discuss quality matters at the main board, as the main board minutes are published. There must be a reason for this request but I doubt if we will learn what it is. FOS refuse a lot of FoIA requests made on the "What do they know" website and suspect this request will meet the same fate.

FoIA request in full on "What do they know"
FOS main board minutes are published here

29 Jan 2013... FOS afficionados may enjoy knowing that the Taiwan version of FOS only takes 64 days on average to settle cases

An article in the Taipei Times marks the first anniversary of the Taiwan FOI (Financial Ombudsman Institution). The FOI Committee chairman said consumers "should be pleased with the speed at which disputes are settled in Taiwan, because it takes its UK peers about six months to reach a decision".

The Taiwan FOI was set up with the assistance of a very senior executive from the UK FOS, Mr David Thomas.

Taipei Times

24 Jan 2013... FOS publish a 141 page response to a Freedom of Information request !   Confirms claimants can request to see a firm's documents and FOS will provide these

A recent FoIA request asked for details of the first 30 FoIA request made to FOS since it came under the FoIA Act. Today 24th Jan FOS have published their response. There are 2 documents.

The first is a letter saying the FoIA docs are attached.

The second is a massive 141 page, file with around 30 letters from FOS written around November 2011 to January 2012. This file may be the first 30 FoIA responses...most are refused, but some info is made available.

  • FOS executives' gifts and donations (nothing much !)
  • Numbers of complaints about FOS service levels
  • Requests for letters, emails and phone calls

Perhaps the most useful info is confirmation that if you ask FOS they will send you copies of the documents provided by the other side so you can see what they have said...immensely useful as it seems these documents cannot be released under the FoIA. You have to ask outside the Act !
See yellow panel on the left.

One important aspect of this is that professional case handling staff at financial firms have presumably known for years that they may request to see a claimant's material documents, but this ability has not been widely published to claimants.

Here is the document, (its very large 8Mb download with 141 pages and is rather hard work to read !)

18 Jan 2013... The Times says banks are trying to put CMCs out of business !

An article in The Times by James Dean on 16th Jan says the Claims Standards Council alleges that Banks are rejecting 75% of PPI claims. These then have to go to the FOS which takes a year to handle them, thus starving the CMC's of income. (FOS are currently recruiting 1000 more staff).

Another article in the same edition says the banks are trying to put a cut-off date on PPI claims and are in discussions with the FSA. Whether the FOS's projected 1000 new staff will still be needed is not discussed.

You need to have a Times subscription to read these stories, but the time limit story is also on the BBC website.

BBC story on PPI time limit
The Times

07 Jan 2013... FOS board approves plans to significantly increase FOS PPI capacity

The minutes of the FOS board meeting on 22 Nov 2012 are now available. Once again this meeting was not at FOS HQ but at " Home Sweet Home", Covent Garden.

The meeting lasted 2 hrs 15mins and was largely concerned with the 2013/14 draft plan, budget and fees. Plans to add significantly to the Ombudsman’s PPI capacity were approved as prudent. The recent publishing of FOS plans for 2013/14 confirm that 1000 extra staff are to be recruited.

Full plans and budget consultation document
November board meeting minutes
FOS main board minutes are published here
Home Sweet Home facilities and prices

07 Jan 2013... Freedom of Information request asks FOS to list the first 30 FoIA requests received since FOS came under the FoIA Act.

The member of the public making this request has made 6 previous requests for information under the FoIA in the last few months. FOS has refused to reply fully to all of them. It will be interesting to see what happens this time !

The "What do they know" website is a really good way of making FoIA requests easily so that your question and FOS's response are available to the public.

Details of this request on "What do they know" website
Details of previous requests by the same person on "What do they know"

04 Jan 2013... New FOS story on the
Consumer Action Group forum...
"FOS...a waste of space and unreasonable"

This is a new story but it has familiar echos of FOS Adjudicator and Ombudsman behaviour and will interest those trying to get FOS to explain a decision.

"We pointed this out to the Adjudicator (from whom the Ombudsman's letter had been sent) and asked for the Ombudsman's comments; this was rejected as "the Ombudsman's decision is final".

"We were then required to accept or reject the decision within four weeks - the post was delayed by a week and we then had the Christmas period when our advisors were unavailable! We asked for an extension which was refused."

In my own case I asked for an explanation of why compensation interest had been set at bare base rate when a higher rate was available at any building society and FOS guidelines require base rate + 1%...answer: "The ombudsman's decision is final". I complained to the Independent Assessor who asked a similar question and got the same response from FOS.

Consumer action group full story

UPDATE 20 Dec 2012 ... FOS refuses FoIA request to publish reports and minutes of the FOS Quality Committee

The excellent "What do they know website" for freedom of information requests has been used again to ask FOS to publish the Independent Assessor's reports to the Quality Committee and the Committee's minutes and Agenda. This threatens to open a view on the FOS's internal workings and perceived problems and solutions. It will be interesting to see what comes of this request !

RESULT...FOS refuses on the grounds that the disclosure would be likely to inhibit the free and frank provision of advice and is to likely to have a
chilling effect on the informal sharing of views within the committee and the fullness and frankness of conversations as part of the committee’s decision making processes.

In other words FOS wants to keep secret its internal discussions about the quality of its work, perceived problems and solutions. However, the quality committee is a sub-committee of the main board and the main board minutes are published in full, so the main board will have to be careful to avoid quality committee issues at its normal meetings to maintain secrecy. The last annual report listed the quality committee as:

Julian Lee chair (to 21 February 2012)
Alan Jenkins chair (from 22 February 2012)
Alan Cook (to 28 April 2011)
Elaine Kempson
Roger Sanders
Maeve Sherlock
Pat Stafford

FOS main board minutes are published here
FOS quality committee terms of reference
FoIA request 1 (scroll down for the full response)
FoIA request 2 (scroll down for the full response)
What do they know website FOS main page (scroll down)

UPDATE 20 Dec 2012 ... FOS refuses FoIA request to publish "Case Handling News"

The excellent "What do they know website" has been used to ask FOS to supply copies of every issue of "Case-Handling News" for the current year. I have no idea what this publication is, possibly some sort of FOS in-house newsletter/training aid.

RESULT...FOS refuses because publication would be likely to inhibit the free and frank provision of advice and would be likely to inhibit the free and frank exchange of views for the purposes of deliberation and would be likely to prove disruptive and to divert resources away from FOS's statutory aims and the day-to-day functions of its board members and staff.

Details of the FoIA request (scroll down for the full response)

UPDATE 29 Nov 2012 ...
The FSA is trying to stop a retired IFA suing for harassment, Court decision delayed.

Mr John Calland wants to sue the FSA for harassment. The FSA applied to have the action struck off but a County Court Judge refused, saying the case had a "real prospect of success". FSA (with unlimited funds at their disposal) appealed and the hearing took place on 28th Nov 2012 at Bow County Court.

John Calland was suing the FSA under the Protection from Harassment Act 1997, alleging the FSA, the Financial Services Compensation Scheme and the Financial Ombudsman Service worked together to unfairly progress loss assessments and solicit pension complaints from former clients.

Mr Calland has been involved in a 10-year battle with three authorities which has seen the FSCS reprimanded for bullying and the FOS reproached for soliciting complaints. Hugh Tomlinson QC, for Mr Calland, alleges the contact and behaviour of the three bodies was “oppressive and unacceptable” while the FSA says the regulator was within its rights to contact Calland and that its actions did not constitute harassment.

Some of the issues in this affair are discussed by Anthony Speaight QC in his speech "Ombudsmen who are affront to the law" (scroll down to page 8).

Original MoneyMarketing story with more background detail
MoneyMarketing's report before the hearing
Money Marketing's report...latest situation after the hearing
Fundsweb article with details

27 Nov 2012 ... FOS reported to be saying PPI claims will now take ONE YEAR to process

This is Money website, part of The Daily Mail, reports on new delays at FOS as FOS's 2500 staff battle with their case-loads.

This is Money's interesting article about PPI

23 Nov 2012 ... FOS forced to provide more information under Freedom of Information Act when complainant asks for internal review

In this case the complainant (Mr Chris Wortley) asked FOS for information about First Plus. The history of what happened is shown with all letters in full on the "What do they know" website, another benefit of using this site for FoIA requests

  • 12 Aug, complaint submitted
  • 06 Sep, no response received, Mr Wortley sent a reminder
  • 12 Sep, inadequate response received, Mr Wortley asked for an internal review under FoIA procedures saying he does not believe FOS does not categorise complaints
  • 16 Sep, FOS promise to reply by 10 Oct
  • 09 Oct, FOS say they can't reply by 10 Oct but will reply by 26 October at the very latest
  • 25 Oct, FOS reply...GIVING MORE INFORMATION !!!   But they still with-hold some information, saying it would be too expensive to provide it.

In quite a few cases FOS rely on the financial limit to decline to provide information under the FoIA.
Full list of FOS FoIA requests using "What do they know" (Scroll down)

UPDATE  10 Nov 2012 ... Natalie Ceeney and Tony Boorman appear in front of the Parliamentary Treasury Committee. Transcript now available below

The chief ombudsman and deputy chief ombudsman recently appeared in front of the committee. Overall a smooth performance by Natalie, Mr Boorman said little, but nodded frequently.

Adjudicator and ombudsman qualifications...a little confusion
Natalie did look a little uncomfortable, however, when questioned by David Ruffler MP about the qualifications of adjudicators and immediately passed the question to Mr Boorman who said that "typically" adjudicators and ombudsmen were required to be graduates. Mr Ruffler said that in a case he had seen it was clear that both adjudicator and almost certainly the ombudsman were not as financial numerate as they should have been. When asked if she thought they should have financial qualifications or exams...Natalie said no !  Mr Boorman said that adjudicator and ombudsman qualification requirements were published on the FOS website, but I can't find a specific page listing them. There is however a link on the FOS careers page (6/11/2012) to an advert for an Adjudicator which specifically states "you dont need to have a degree to work at the ombudsman service" and an ombudsman advert for May 2012 which I found, does not contain a graduate requirement as far as I can see.

John Thurso asked about the FOS's unusual board structure with 9 non-exec board members, not including Natalie who also has her own executive team of 7 who are not on the board. Natalie said it all worked OK, however she did reveal that the FOS main board is to be reduced from 9 to 5 plus the Chairman.

Video of the entire meeting (if not visible...select "silverlight" at the bottom). The questions about qualifications start at about 10.02.
Uncorrected transcript of the Treasury Committee meeting (Q27 to Q34 cover the "qualifications" questions)
More reports of the meeting and what was said are below, all have their individual slants on what was said.
Money Marketing
IFA online (mentions qualifications)
Mortgage Strategy
FT Adviser
The Guardian
Advert for an Adjudicator
Ombudsman job specification and salary May 2012

UPDATE  5 Nov 2012 ... Deputy Chief Ombudsman issues provisional decisions on 2 interest rate swap cases, he reverses the decisions originally issued by adjudicators

Mr Boorman, (recently promoted to deputy chief ombudsman) only takes the most important FOS cases so his views and decisions are very, very important. Please see the links below for more info. Bully Banks website has support for small firms affected, and suggests that earlier FOS decisions may have to be changed...But the ombudsman's decision is final...Hmmmmm.
Carter-Ruck solicitors give the legal position

Apart from the issues of the cases described, the rulings show the importance of not "just accepting" an adjudicator's decision if you are unhappy with it. Ask for an Ombudsman to look again at the case. You may not get Mr Boorman, and it will take a long time, but at least someone else will look at the facts.

FOS decision Bank E and interest rate hedging
FOS decision Bank S and an interest rate collar
FOS on-line technical resource with these and other key decisions
Carter Ruck solicitors excellent article
Daily Telegraph on reversing the swaps decisions
Herald Scotland article with examples of mis-selling
Bully Banks website

UPDATE 28 Oct 2012 ... Natalie Ceeney concedes that the better CMCs give a valuable service to consumers

A long concern with FOS is their preference that consumers put their case in their own words, regardless of how complicated it is or how complex the product. Many consumers are not capable of doing this with today's financial products. On the other hand the banks etc use highly paid and experienced experts to fight their side of the case who know more about the products than the FOS's inexperienced adjudicator team.There is a need for FOS to allow consumers to employ their own experts and have the cost repaid if they win in order to allow both sides to put their case with equal skill. CMCs may not be the best way to do this, indeed they may rarely be necessary at all, but they do have a place in some financial claims and the FOS Chief Executive now acknowedges this. If Natalie concedes that CMC's sometimes give a valuable service, perhaps she will admit that some consumers need other types of professional advice to put their case and stop trying to discourage their use.

On the other hand...
FOS Boss says CMCs rip off consumers

Financial Ombudsman Service (FOS) chief executive Natalie Ceeney has slammed claims management companies (CMCs) for ripping off consumers...see link below.

Better CMC's give valuable service...reported by Global Reinsurance
FOS Boss says CMCs rip off consumers...reported by Insurance Times

19 Oct 2012 ... FOS board meeting in July, agrees on changes to how the board works and more CPD ... few details though

The board met on 25 July at the Institute of Directors, 116 Pall Mall. No reason is given for the venue this time, after the last board meeting on 20th June was also an away day. The Pall Mall IOD building offers "a host of facilities for business and pleasure" including a restaurant, brasserie and wine bar, and charges about £400-600 for a meeting room to seat 15 persons.

All we are told about the board changes is that there are to be some administrative improvements and a more systematic CPD programme for the board.

Board meeting 25 July minutes
Institute of Directors, 116 Pall Mall

UPDATE   04 Oct 2012 ... FOS decision takes 4 years to come and is less than satisfactory even then...FULL STORY !

The consumer involved in this case has told me what happened in his own words, see the link below.  In essence:

  • The case took 9 months to reach an adjudicator
  • Then a further 15 months to reach an ombudsman
  • Provisional decision awarded £100,000 (FOS maximum at the time)
  • Insurance company disagrees and delays, threatens judicial review
  • Further provisional decision...£100,000 figure now removed...replaced by a formulaic award, with no specific figure specified
  • MP involved, writes to Natalie Ceeney...at least she apologises... action at last...final decision, but still no specific sum awarded. Opposing parties told to agree an "appropriate expert" to set the compensation, no parameters about how to do this, no timescale
  • The insurance company ( actually the same person who has fought the case throughout for 4 years) now argues about the choice of expert
  • The matter continues, after 4 years still no resolution and the complainant worries that no fair solution may be possible despite FOS's involvement.

The (previous) Independent Assessor has written several times in his Annual Report to the FOS Board about the difficulties and problems associated with FOS formulaic awards...i.e. where no specific sum is set. It seems the lessons have not been taken on board.

It is scarcely believable that after 4 years of consideration, FOS's financial experts could not arrive at a final figure for compensation in this case. The first ombudsman assigned £100,000 redress but after lobbying by the insurance company FOS backed away from that, and prefer an uncertain route their own Independent Assessor has warned frequently leads to problems.

Full story written by the consumer

27 Sept 2012 ... Independent Assessor revises her personal web page

The Independent Assessor revised her personal web page in August. She spells out more clearly the actual process which must be followed and what she can and can't do. For instance she spells out that:

"A service complaint is about the practical handling of a case such as efficient administration, following the correct process, keeping track of correspondence and case papers. A service complaint does not cover the use of judgement by an adjudicator or ombudsman on what evidence is needed, or what weight is placed on the evidence or whether a complaint should be upheld"

In other words, you can't complain about the FOS decision ! The Ombudsman's decision is final and can't be changed even if its wrong. There is no appeals process except Judicial Review which most people have never heard of and in any case is very expensive and needs barristers etc.

Clearly sensitive to concerns about her independence the IA explains that she was appointed by a board which included an independent person to make sure it was fair. Actually this (unknown) person had only observer status so presumably did not influence the proceedings. She also says FOS have always accepted her recommendations since 2010. Actually FOS has always accepted all IA recommendations in 12 years since FOS started. Rejecting a recommendation means it goes to the board and the board then has the tricky choice of overriding their own staff (by accepting the recommendation) or publishing the whole matter in the annual report. This embarrassing washing of dirty linen in public has always been avoided. For an example of how the (previous) IA and the Principal Ombudsman handled an awkward situation regarding a recommendation please see the case study in my review of the Independent Assessor's role.

Having said all that, the new IA seems to be doing a good job within her limited remit. Her new website page is more helpful and should be the first port of call for anyone considering a complaint to her.

19 Sept 2012 ... FOS apparently "under no obligation" to answer detailed points when asked to do so by a consumer

I have received an email from a reader who advises that during the adjudication process he queried some points made by the service. He tells me this was the response:

"It is clear that you want detailed answers and I have explained that we are under no obligation to answer each and every point or question raised by a consumer (or his or her representative)"

Not the most helpful attitude, I would say. This reminds me of my own case (FOS 5156222/KM/46) where the FOS staff member said:

"I am not prepared to devote additional time and effort towards further elucidation which I am far from confident will meet with either your understanding or acceptance"

I had asked FOS how their award could possibly put (my Aunt) back where she was before the bank's mistake, when the redress interest was paid at bare base rate and a higher rate was available on any high street and FOS guidelines requires base rate + 1%. I could not get an answer to the question from anyone up the the Chief Executive, nor could my MP. The Independent Assessor saw my point though but he was brushed aside by the Principal Ombudsman.
Read the full story here

Read what the Independent Assessor did here (see the "case study" box)

12 Sept 2012 ... CHIP and PIN problems and weakness...
The Times reports another instance of FOS siding with a bank over a credit card fraud claim
Sometimes newspapers and other websites have articles about chip and pin problems and how FOS handles these. The link below tells of a security risk with chip and pin, it's not infallible it seems.

This ties in with Laura Whately's report in The Times last month where she
highlighted another case where FOS has sided with a bank in a credit card misuse claim. She says this is despite FOS claiming that it will challenge banks' assumption that chip and pin is infallible. There is comment from Professor Ross Anderson a card fraud specialist who has a website with lots about this subject.

I c
an't link to The Times article, due to their paywall, but for subscribers, it's
Sat 11 Aug. Money section, page 52.

BBC report on Chip and Pin weakness
Lightbluetouchpaper website with the original research
More on this Lightbluetouchpaper

UPDATE 10 Sept 2012 ... FOS misses the deadline for reply to a Freedom of Information request.

The questioner asked about the number of compalints involving First Plus and the ratio of decisions found in favour of each party, First Plus or the complainant. One month passed with no response and the questioner has asked FOS to acknowledge the question and answer it.

12 Sept...FOS reply (with apology for delay) but without providing the information requested as it would take too much time and/or money to produce it. The questioner disputes that and asks for an Internal Review. FOS say they will look again at the issue and respond by 10th Oct.

Website page with the actual question and answer

05 Sept 2012 ... FOS advertises for Head of Casework Teams

According to the advert, applicants for the £60-75k job should...

  • know about the power of illumination
  • light up teams of managers
  • shine for more than 30 seconds
  • be the electric dynamo at the core of [FOS] service
  • bring long-life, high-wattage brightness into every corner of [FOS] casework operations.
  • have luminosity, energy and proven experience in managing high-powered operations

Presumably FOS have chosen this style of advert to appeal to particular types of people. A similar theme has been around for some time in other adverts. If it attracts you, the job description (a little calmer thank goodness) is to be found here ( FOS say it will light them up to hear from you ).

FOS careers page

04 Sept 2012 ... Various items...catching up after holidays

Assertions that large numbers of frivolous complaints are pushing up costs is not borne out by statistics, says FOS

"I'm about to start a judicial review against the fos for a decision which I believe is totally biased. The decision even said the other party was at fault yet no remedy or compensation was awarded"   A new item as the Consumer Action Group forum hots up...scroll up and down.

Julian Knight: Commission - The root of another mis-selling scandal
The sale of unregulated products to the general public shows, once again, that abuse is still rife.
Independent Newspaper

The Financial Ombudsman Service is reviewing up to 200 complaints about unregulated collective investment schemes, with many complainants alleging the scheme was missold by their adviser. MoneyMarketing article

10 Aug 2012 ... An interesting board meeting on June 20 as the board take an away day at Home Sweet Home

FOS have published the minutes of the Board Meeting which took place on 20th June 2012. This meeting took place at "Home Sweet Home", Covent Garden, which a Google search shows to be a conference/meeting facility. No reason is given for this choice of venue which is only about 5 miles from FOS HQ. If it was rented at the published rate, it cost FOS £750 plus extras.

The Board dealt with 3 items. An executive update on several matters, approval of the previous meeting's minutes and, most interestingly, discussed it's own performance.

It seems an annual "self-assessment" is made of the board's performance and scope for improvement and this was done with a confidential questionaire. We are not told who set the questions, or analysed the answers, but it seems that the board decided it was performing well, but there was room for some changes to its form, focus and some sub-committees. The Chairman, Nick Montagu, was given a mandate to make changes.

So...something is about to change at FOS board level. The next awayday is in September...destination unknown...when the board will be taking a strategic view of the Service’s longer term position and the environment within which it might be operating...presumable to take account of the regulatory structure changes which are getting nearer.

Home Sweet Home facilities and prices
Board meeting June 20th minutes
Industry comment on board changes

01 Aug 2012 ... FOS tells an adviser to buy back unsuitable investments himself in order to repay his client

In a provisional decision, FOS has told an adviser who recommended unsuitable investment schemes to a client, who was then unable to get her money back quickly, to buy the investments from the client and get the money back himself.

This has prompted discussion about how personal indemnity insurance providers will deal with such a situation if the FOS intends to make this a common requirement.

In April I highlighted a problem in Australia where insurance firms/underwriters are reported to be leaving the PI market due to high claims levels as FOS awards push up costs, this could happen in the UK too.

Main story in full on FT Adviser website
Effect on PI insurance on FT Adviser website
Article in Australian "Wealth Professional " about PI insurance

29 Jul 2012 ... FOS recruiting Case Assessors again. £22k

Less than 3 weeks after saying that it was too late to apply for the Case Assessor job and it was contacting people, FOS advertise the job again on the careers page.

Candidates discuss FOS interviews on the internet
. Some discussions are on "Wikijob" and "TheStudentRoom". Make sure you scroll back and forth and check all the pages, there is a lot of info here for applicants, some of it is considerably out of date...and of course it may all be rubbish so take care...but there is a ring of authenticity to some of it. No doubt the interview board will look at these websites too !

The student room

20Jul 2012 ... "FOS remains a flawed system"

This is a new article in MoneyMarketing, written by Alan Lakey who has made many criticisms of FOS in the past. He discusses the effect of delays on the FOS process when the usual time limits are exceeded, and how this can effect advisers who may have long sinced ceased in business, or retired.

Some readers of the article have left comments, Mr Lakey has allies !

MoneyMarketing article: "FOS remains a flawed system"

UPDATE 16 Jul 2012 ... FOS replies to Freedom of Information Act request about burden of proof.

A member of public has asked FOS about the burden of proof it applies to credit reference agencies such as Experian, Equifax etc and the information which they process in relation to individuals.

FOS has declined to respond to a number of requests made on the "What do they know" website ( this website is an easy way to make a FoIA request ), sometimes stating that it is too expensive to respond. In fact the website says only 2 of the last 10 requests to FOS have been successful.

In this case the questioner has also asked the same question of the OFT, the Information Commissioner and the FSA, so it will be interesting to see and compare how the various bodies respond. They are legaly required to respond in 20 working days.

FSA responded in 3 days, no information held
FOS responded in 17 days, no information held
OFT no response within the statutory 20 day period but now says no information
IC no response within the statutory 20 day period but has now apologised and responded

The "What do they know" website allows anyone to ask an FoIA question of the FOS (and many other bodies) and allows the public to see both the question and answer, or reason for not answering. It's a hugely important site. You can set up a service to email you when a new question is asked to FOS or another body.

What do they know website (FOS page) (all FOS requests)
What do they know site with all 4 requests (click on the request to see reply)

13 Jul 2012 ... FOS online technical resource now intended primarily for professionals working in financial services and in complaints handling

No explanation is given to the reason why FOS has decided to qualify its online technical resource in this way. I see no reason why ordinary members of the public taking cases to FOS should not read and use these useful publications and of course anyone is free to do this. More complainants are declining adjudicators' views and asking for an ombudsman's decision. These are likely to be people with a deeper knowledge of the issues involved in their cases who are concerned by what the adjudicator says as well as an increasing reluctance to accept the adjudicators' view as correct. The online technical resource is a rich seam of useful information for anyone who wants to learn more about how FOS reaches its conclusions. I suggest anyone making a complaint would do well to look here, whether professional or otherwise.

FOS online technical resource

03Jul 2012 ... Financial firms may have more difficulty in challenging FOS decisions, due to small print in the Financial Services Bill

It seems that Law firm Regulatory Legal has written to the Treasury Select Committee chairman arguing that changes in the small print of the bill could prolong the amount of time complainants have to accept a FOS decision against a firm, making it difficult for the firm to challenge the decision by Judicial Review.

Full story in New Model Adviser

03Jul 2012 ... FOS publishes final decision on the AIG case

I will make further comment in due course on this important (and very lengthy) decision, taken by Tony Boorman, the highest Ombudsman who actually takes cases at FOS

AIG final decision

UPDATE  26 June 2012 ... FOS criticised in 3 forums

A new thread on the "All about debt" forum is concentrating of problems with the FOS. The site administrator claims to have "someone inside" who is happy to be a whistleblower. Letters to the Independent Assessor and from a named Ombudsman are published, though the forum writers are anonymous.

" As a result of some shocking recent case studies from the FOS, we are starting a new thread to deal with all cases of mis-treatment, abuse and wrongdoing"

Also the respected Moneysavingexpert website has a new forum entry mentioning inexplicable mistakes and delays at FOS

The MoneySaving Expert forum has another thread with FOS issues...one describes a case where the financial institution admitted fault and offered £4500 compensation, the consumer thought 'not enough £10,000 is nearer the right amount' and asked FOS to rule. FOS took 18 months and said the firm should pay £300...(Scroll forum to item from Magrew 30-5-2012)

All about debt FOS forum (scroll through the pages, its hotting up ! )
Moneysavingexpert new FOS problems forum (quiet)
MoneySavingExpert forum (has the £300 case above)

21 June 2012 ... FOS ignores expert evidence from the expert professional who wrote the relevant rules

FT Adviser has a story that the FOS and high court have upheld a complaint about drawdown advice, despite hearing expert evidence from Peter Williams, the author of the relevant rules.

Mr Williams said: “When I looked at this case, I was of the opinion that the ombudsman made an incorrect judgement. Unfortunately the process does not allow that to be appealed. It was my professional opinion".

Dr Williams, wrote the exam text for the Chartered Insurance Institute’s K10 Retirement Options exam and wrote the RU55 guidelines on drawdown for the Personal Investment Authority.

I have personal experience of FOS ignoring professional expert advice. In my case (on behalf of an aged aunt) a bank advised that at age 84, my unwell aunt should place 93% of her savings in financial investments with them, leaving only 7% (£10k) in cash. She went to the bank for advice when she inherited some shares from a relative. The bank advisers met her alone in her bungalow and she signed up despite having kept all savings in bank and building society accounts until then. I obtained evidence from a professional expert witness, actuary and financial expert who said the advice was negligent and would have failed the most basic IFA exam and would not have been suitable even for a much younger person. However, the FOS Ombudsman thought the bank's advice was suitable for the 84 old lady and said that she was an experienced investor despite her inheriting the shares and never trading. Of course no appeal is possible of FOS decisions.
This is why I publish this website !

FT Adviser story about Dr Williams' evidence
Full details of the FOS and my Aunt's case

31 May 2012 ... FOS makes a glaring error according to the Daily Mail, This is Money website

Aviva told Ken Morton he could exit his with profits bond without penalties, he waited some years and did this, but it was wrong information and he lost £4317.
FOS found in favour of Aviva even though Mr Morton had simply followed their written advice.

Full story at This is Money
(Scroll down to headline "Unfair Aviva and the with-profits trap"

29 May 2012 ... Interesting article about FOS and its relationship with the law

This article is a bit out of date now, but much of it is still very relevant today.
It was published in Money Management in 2006. It has a number of interesting quotations from the previous Chief Ombudsman, Walter Merricks making clear FOS's conviction that it is outside the law. The author, Alan Lakey is a financial adviser and long time critic of apects of the FOS.

Article in full

17 May 2012 ... Mr Sam Hallam has his murder conviction quashed by the Court of Appeal.

Mr Hallam was fortunate that the UK legal system allows appeals. Members of the public who are faced with poor or suspect decisions by the FOS panel of ombudsmen are not so lucky.

There is no appeal against an Ombudsman's decison and the FOS is unwilling to re-open cases even though Lord Hunt in his independent review of the FOS suggested that a system should be in place to review some decisions

In para 4.19 of his Independent review of FOS, Lord Hunt said , "I recommend that the FOS should have the discretion fully to reopen a decision in the very rare cases where relevant information emerges after a decision has been made, including through the work of the Service Review Team and Independent Assessor". The service review team has been abolished, but surely the Independent Assessor's terms could be changed as Lord Hunt suggested, to give her the right to order independent reviews of genuinely troubling decisions.

By not allowing appeals or reviews of Ombudsmen's decisons, FOS is in effect saying..."our ombudsmen are always right". But we all know, that like the jury and judges who convicted Mr Hallam, mistakes do happen, we are all human.

Lord Hunt's review of FOS
Independent Assessor's terms of reference

17 May 2012 ... Association of British Insurers says FOS should consult before issuing common guidance

“For example, the Financial Ombudsman Service could consult with key industry and consumer stakeholders before issuing guidance or background notes on its approach to handling complaints on particular products.

“This would help improve the quality of its guidance and ensure its compatibility with regulation.”

This is not the first time the industry has called for FOS to consult more before issuing guidance.

Full story on FT Adviser website

05 May 2012 ... Another instance where FOS sides with a bank but subsequent evidence shows consumer was right.

"After a year and a half investigation, the Financial Ombudsman sided with Nationwide, at which point he approached us looking for some advice. We put him in touch with a specialist card fraud investigator, Richard Emery, who runs 4Keys International. Within four weeks, he had persuaded Nationwide that Mr Singh had a legitimate claim. The building society did not return his money but, instead, paid him his losses as a "gesture of goodwill".

The above clip comes from a story in The Guardian. Its another example which shows that FOS decisions are not always correct thus highlighting the ned for an appeals process when new evidence shows a decision to be suspect. In this case the bank dons not admit they were wrong, but they would not have repaid the losses when FOS supported them unless they new there was a serious problem with their case and the FOS decision.

Full story in The Guardian

04 May 2012 ... Another discussion forum on MoneysavingExpert website about FOS issues.

MoneysavingExpert forum

03 May 2012 ... IFA writes to Chief Ombudsman, Natalie Ceeney, about being denied access to the normal paths of appeal.

I don't fully understand this story as I am not IFA qualified but it seems an IFA is being held responsible for his PI (Professional Indemnity Insurance) excess as a result of a decision againsty his previous employer. He said:

"I am unable to bring a judicial review myself against the FOS for the process taken on arriving at its decision, while still being held liable for any PI excess. I am therefore in a state of flux and being denied access to the normal paths of appeal".

The full story is on the FT Adviser website

There is no appeal against any FOS Ombudsman's decision, regardless of what has happened and its difficult to get FOS to discuss decisions. In my case, eventually (after huge and lengthy arguments) I got FOS to take another look at some tax issues I had discovered after the case was closed. Instead of appointing an independent person to look at it, it was passed back to the original ombudsman who had made the original mistake. He reviewed the decison and unsurprisingly saw nothing wrong. Eventually the Independent Assessor got involved and the award was changed and FOS apologised without admitting that the ombudsman had made a mistake. They blamed another department.
It's not good enough...FOS ombudsmen are humans and (like doctors...see story opposite 04 May 2012) can make mistakes. FOS should be big enough to admit this and institute a review system as recommended by Lord Hunt.

19 Apr 2012 ... Doctor says patient had a stroke. Patient claims on critical illness policy, insurer won't pay...
FOS backs the insurer !

This story has been taken up by The Mirror. No doubt there is more to it than meets the eye, but it does not look good. When FOS publishes these decisions we will be able to see the reasoning behind this sort of thing.

"I can see that this might not look good. This isn't a case of us 'taking a view'; it's us acting on what the medical experts have told us."

Full story in the Mirror

18 Apr 2012 ... Useful article about making a PPI claim and the delays which may be encountered with the banks and FOS
Click here

UPDATE 16 Apr 2012 ...
Wikijob has discussion on FOS interviews

This is building up to quite a useful discussion on FOS interviews, essential reading for FOS interview candidates...

"Thanks for your reply. I'm glad someone else has the same reservations. From the start I asked the recruitment agents for the shift patterns. But they advised they were not sure and also advised me not to ask the FOS during my interview, which I thought strange".

"The Assessment is a piece of Cake!, I didnt prepare for it in much detail before hand, just be calm and efficient (you may feel bogged down by the many documents given to you). Its a PPI complaint basically, and the assessment is a comprehension task, just make sure you read up abit on PPI if you dont already know about it"


16 Apr 2012 ...
Information about how the Independent Assessor works

I have been shown a ruling by the Independent Assessor which has highlighted a couple of points claimants might like to know and bear in mind.

If you make a complaint, the IA has access to the FOS file on your case but she is also able to listen to telephone recordings of discussions between claimant and FOS staff. It is probable that all FOS conversations are recorded, but I do not recall being advised of this in my own case. (It did not matter much as the adjudicator declined to discuss my concerns anyway, saying we had discussed it all in writing).

It also appears that although she is supposed to be independent from the FOS, the IA is allowed to see documents which the actual claimant himself is not allowed to see and which the financial firm does not wish FOS to reveal to third parties. The IA is allowed this access, she says, because she was appointed by the FOS Board. Hmmmm....I have always been concerned that the IA was too close to FOS to be truly independent and the above does not change this view. If FOS allows the IA to see documents which are not available to the claimant and which the firm regards as confidential, merely because she was appointed by the board, then the relationship between IA and FOS is clearly not as independent as all that. A major concern about the IA is that is appointed and paid by the body she is tasked with assessing.

I am also concerned that a claimant can apparently be prevented from seeing certain documents related to his case so he may not be able to put his case properly, whilst FOS and the IA can see these documents when making their rulings. There is something wrong here !

The link below will take you to my overall view of the role of the Independent Assessor and contains a real life case study showing the very close relationship between the IA and senior FOS managers.
The role of the Independent Assessor

12 Apr 2012 ... FOS, outreach and twitter

FOS "news and events" website page has changed title to "news and outreach" and FOS boasts of 1000 followers on its Twitter feed. See below for a taste of what is on offer.

You could also follow my Twitter feed, (showing at the top left of this web page) 
I currently have 12 followers...so only 988 more required to catch up !
If you like this website and think there is room for improvement in the way FOS works, please follow me on Twitter.

The box below is the official FOS twitter feed ... not mine !

05 Apr 2012 ... Interest rate swaps, website offers help !

Interest rate swaps are specialised financial products bought by many small businesses and are the subject of the latest scandal. Only the smallest businesses may take these problems to FOS. However more help is at hand on another website which has been set up to co-ordinate action. This is Bully-banks.co.uk and may be well worth a look for businesses who have bought these products.

Good article about this from the BBC

05 Apr 2012 ... FOS quick guide on calculating redress in investment complaints

This guide has been re-printed and is full of information about how FOS approach this vital issue. It explains when base rate +1% should be used and when 8% flat may be appropriate.

Unfortunately the guide is full of disclaimers, "usually", "we are likely to", "it may be appropriate", etc. etc.... This is because, (as FOS state in the last paragraph), even though this publication exists, it is not a statement of the law, FOS's approach or FOS's procedures. The Ombudsman will decide on what he thinks is "fair and reasonable" and (as I found out in my own case) he can ignore these publications and there is nothing anyone can do about it.

Never-the-less, since FOS do publish this guide and others, in my view, it is reasonable to expect them to follow the principles described...why else publish the guides ? Ombudsmen and Adjudicators should be prepared to explain why they have not followed these guides or why they have not insisted that firms follow them. In the recent landmark Arch-Cru decision, the Principal Ombudsman, Tony Boorman, referred to both the "base rate +1%" and the "8% flat" scenarios in his decision.

Quick guide to redress in investment complaints - FOS guide
Is compensation taxable - FOS guide
More FOS technical publications and quick guides
Arch Cru decision
Example showing double standards regarding interest rates

31 Mar 2012 ... FOS adjudicator and ombudsman decide against claimant...but FOS did not discover the truth... evidence showed fraud and the bank paid up...
but only after "Guardian"/"Observer" take up the case.
The ombudsman's decision turned out to be wrong !

FOS gets the decision wrong and the claimant would have lost out, but they contacted Margaret Dibben at the Observer and she investigated. The evidence showed that fraud had occured and the claimant was compensated despite FOS finding in favour of the bank.
Full story in the Observer/Guardian article

This is an illustration of what can happen as a result of the FOS's "The ombudsman's decision is final" policy. The FOS ombudsmen made over 20,000 decisions last year...surely some of them, like this one, were wrong...but there is no appeal against an ombudsman's decision. This has to change.

In another case (my own) the ombudsman approved compensation which had a £3000 tax deduction in error, FOS staff argued for months to protect the ombudsman's decision and justify the tax deduction, but it was eventually shown to be wrong when the principal ombudsman eventually ruled that no tax at all should have been deducted and FOS guidelines had not been followed. The ombudsman, however, somehow escaped criticism.
My case in detail (FOS case 5156222/KM/46)

FOS ombudsmen are far too powerful. No appeal against them is allowed so they seem infallible because mistakes are never discovered. Anyone, even an ombudsman (as the Guardian has shown), can make a mistake, there should be an appeals system.

25 Mar 2012 ... Freedom of information request asks who would consider a claim that FOS has been negligent. FOS takes 19 days and 13 hours to decline to answer.

UPDATE (2) 26 March...FOS were thought not to have replied to a FoIA question within the required 20 day period, but FOS have now replied (at 13.00hrs on the last day permitted), explaining that the 20 day period starts the day after the request was received which means the reply was made within the required timescale. The reply itself says nothing but it still took FOS 20 days to consider how to respond. In the end FOS claim that the enquiry is not clear and FOS cannot "confirm or deny" that they hold the information requested. FOS do say the enquirer may wish to refine or clarify her request...I hope she does so
because the points raised are important and need answering.

There are valuable lessons here for those asking questions under FoIA, the way the question is worded appears to be crucially important to FOS, it may be helpful to always ask for a document. e.g. "Please publish all documents containing guidance and/or information for staff on FOS policy and procedures in the event that a person or body suggests that FOS or FOS staff have been negligent."

The original question (which was not answered) was as follows. It seems clear to me that FOS could have worked out what the enquirer wanted to know, especially for the 4th and 5th points, but have avoided answering on the basis that the questions were not clear enough.

  • Who would consider a claim that the Financial Ombudsman Service has been negligent?
  • How many such claims have been received?
  • How many such claims have been successful?
  • How are negligence claims dealth with?
  • To whom should such claims be made

Follow this request and FOS's response on the "What do they know" website

22 Mar 2012 ... FOS can sidestep English law (Eversheds)
UPDATE...link to court judgement.

Eversheds solicitors have written a very interesting comment on this FOS decision which sums up brilliantly the FOS's ability to make decisions outside the law. It seems Mr Boorman's decision on the AIG case is exactly opposite the judge's ruling in a similar case in the law courts about the same financial product. The legal case is subject to an appeal but as Eversheds say...

"In the meantime, firms dealing with suitability complaints should be aware that, whatever the Court of Appeal decides, the breadth of the Ombudsman's jurisdiction means that he can effectively sidestep English law".

Time will tell which decision is correct; the court decision can at least be appealed, but there is no appeal against an ombudsman's decision and once the claimant accepts it, it becomes binding on the financial institution or adviser.

The legal case will be appealed later this year and the Judge's ruling will either be confirmed or not. But there is a real possibility that a binding FOS decision will stand (merely because the claimant accepts it) whilst a judge's legal ruling in a similar case about the same financial product has found in the opposite way. Many would say this is wrong and, regardless of the outcome of the legal appeal, FOS should not have the power to make such decisions without the right of appeal.

Read Eversheds paper in full
Judgement, Rubenstein v HSBC (see para 116)

19 Mar 2012 ... House of Commons Public Bill Committee discusses some FOS and Financial Services Bill matters

The committee discuss whether claims management companies should be regulated, (committee members voted against 7/9), and whether FOS should consult with the Financial Services Industry before issuing guidance and technical notes ( Mark Hoban says not necessary).

Hansard 15th March

16 Mar 2012 ... Update...
FOS wins yet another battle with the judicial review system

A group of financial advisers, Adviser Alliance, has tried to get a JR of the lack of a long stop for advisers. The FOS accepted a complaint despite the fact the advice pre-dated the creation of the FOS and was given over 15 years previously. Adviser Alliance argued Treasury legislation required the FOS to “take into account” how the previous ombudsman would have acted in which case the complaint would have been time barred by the 15 year rule at that time. The judge refused to allow a JR and the appeal against this has also failed. Once again FOS seem fireproof on all JR issues. It is virtually impossible to complain about FOS policy or decisions.

"The underlying message within Lord Justice Burnton’s ruling is that the Financial Ombudsman Service is at liberty to interpret both primary and delegated legislation as best suits its own purposes."

Money Marketing article about this issue
Another (better) view of the background issues, from the same author

08 Mar 2012 ... FOS declines to show documents used to reach a decision because they are commercially sensitive

The claimant asked to see documents referred to by the bank and the ombudsman could have asked the bank to allow this, but she decided not to do this...interesting.

"Natalie Ceeney, chief executive of the Financial Ombudsman Service, has previously described the service as akin to a court, yet in a court consumers’ representation can inspect all the papers personally, ask their own questions and cross examine" said the complainant.

In my own case with FOS, I found that documents I wrote to the FOS were provided to the bank but their responses were not made available to me. Surely both sides should be treated equally.

Full details here from FT Adviser

08 Mar 2012 ... FOS signs up for a further 10 years to use "Exasoft redress manager" software for calculating redress

Ten years is a long time to commit to a software program. Even if Exasoft does have 95% of the market, in 10 years something better could be developed. But the main point is that FOS does have the ability to calculate redress in many financial fields. There have been suggestions that in the past FOS left redress calculations to the firms themselves because they did not have the expertise to do it. Those days appear to be over.

In my case FOS did not check any calculations but still said the banks offer was reasonable even though it did not comply with FOS guidelines, (and they ignored the Independent Assessor when he asked them to review their approach to this).

Well now FOS do have the ability to calculate redress accurately so there should be no arguments over whether it is correct or reasonable. Complainants concerned about the value of their compensation offer should ask what figure Exasoft Redress Manager suggests and make sure the bank's offer complies with this.

Exasoft plc website
FOS "Quick guide" to calculating redress in investment complaints

12 Feb 2012 ...
FOS double standards over interest rates on compensation

Moved to separate page

10 Feb 2012 ... Geoffery Bloom MEP makes another attack on FOS ombudsmen's qualifications and principles

Mr Bloom says Ombudsmen:

  • work outside the principles of English Law
  • have no presumption of innocent until proved guilty
  • make decisions which are not subject to appeal
  • and are inadequately qualified, far less than those they judge

He says a lot more as well in an article published by FT Adviser, which is well worth a read. Mr Bloom is not alone in these thoughts. I have long advocated some of them on this website and Anthony Speaight QC has made a telling speech along the same lines. There are readers' comments below the article.

FOS are reported as saying FOS operates fully within the law and complies with the European Convention on human rights. Hmmmm..."operating" within the law is not quite the same as ensuring that properly qualified staff apply legal principles to evidence and decisions, in my opinion.
Mr Bloom's comments in FT Adviser
Speech on Ombudsmen and the rule of law by Anthony Speaight QC

08 Feb 2012 ... IFA's oppose naming and shaming firms when FOS publishes ombudsmens' decisions

An IFAonline article names the five main reasons why IFAs don't think it right for firms to be named and shamed by FOS if (when) they publish ombudsmens' decisions.

Perhaps the most interesting reason is that it appears the intention to publish names comes from FOS, not government. As one response to FOS's consultation pointed out...

"The draft Financial Services Bill is silent on whether the identities of firms should be disclosed (it merely requires that the complainants' identity should not). This is a proposal being driven by FOS alone."

But quite a few other respondents agreed with FOS

IFAonline article and comments
FOS consultation results document

03 Feb 2012 ... Board discusses "Social media" and the FOS

At the December meeting the board noted the innovative social media work being undertaken by the service. No details were given about exactly what is involved but work has been done to look at risks and opportunities this poses. It seems guidelines about how to intervene in social conversations have been drawn up and are being piloted.

I have not noticed an FOS presence on social media, though there are several places where FOS matters are discussed, sometimes in forthright terms !
However they have fairly recently established an FOS twitter feed which I have linked to below for interested readers.  It does not seem to be revolutionary, but it does get a lot more traffic than my twitter feed !

Interestingly the writer of the FOS twitter feed does seem to have authority to intervene or offer help in FOS issues and cases. See samples below where he offers twitterers the option to ring 02070935598 for help.

Hmmm...what information or advice is being given here, I wonder...and by whom. Until FOS formally advises that information given on twitter may be relied upon, I advise caution.

Board minutes Dec 2011

@Financialombuds twitter feed

01 Feb 2012 ... FOS looks to attract graduates.
New university masters course for FOS staff

The FOS seems to be aiming at recruiting more graduates. Meetings for graduates to meet FOS were advertised, but the reference has since been removed. The careers page has a specific new "opportunities for graduates" link. Following the link takes you to a page devoted to the new position of case assessor at £22k. Case assessors are junior to adjudicators who have not required degrees in the past, so it seems FOS is aiming to attract higher qualified people. A profile tells of a man who went from law graduate to team manager (£40k+) in just over a year.
Turnover has been high at FOS recently as staff take similar, but better paid, jobs at banks and financial services firms. At one year from entry to team manager, FOS promotion looks to be fast.

After a period where recruitment adverts appeared on the FOS website, but not on the Randstad recuitment website (Randstad have a contract with FOS) things have changed. Randstad now advertises several FOS posts including "case assessor" at the slightly higher salary of £22.5k
This advert does not require candidates to be graduates.

It also seems FOS are providing training to "masters" level for some staff with a four year contract to provide accredited training going to Queen Margaret University.

FOS careers page

Opportunities for graduates
Graduate pack
Randstad financial and professional jobs website
QMU press release about the new masters course
FOS major contracts with prices

26 Jan 2012 ... Tony Boorman speaks to BBA seminar about the new Financial Conduct Authority. FOS should be independent of regulation.

"Securing our independence is not always as straightforward as it may first appear. But our independence from industry and consumer groups – and indeed from regulation – is critical, if we are to maintain the confidence of all parties in our independent-minded and impartial judgements in the disputes we resolve".

Hmmm...I think the FOS could do with a bit more regulation. FOS ombudsmen have medieval powers to administer what Anthony Speaight QC referred to as "unappealable, compulsory, summary jurisdiction". 20,000+ decisions last year for amounts of up to £100,000 (£150,000 soon) were faultless by definition, and not subject to appeal. Who knows what mistakes were made and passed un-noticed ? The FOS has extraordinary powers with little regulation.
Mr Boorman's speech
Anthony Speaight QC

12 Jan 2012 ... National Audit Office publishes its review of FOS efficiency, ombudsmen not buying in to change
Originally intended to focus on value for money, the NAO review now reports on efficiency, not quite the same thing, but its still an interesting read, with 5 recommendations. A bit technical though, and full of modern "management speak" which gets in the way of the message. A few things caught my eye regarding the ombudsmen panel.

Scope for ombudsmen to improve engagement with change
"Although there is strong buy-in from staff to the Service’s key priorities and
values, there is scope to improve engagement with some change projects,
particularly from the Ombudsman panel" NAO Recommendation 5e page 10

Ombudsmen raise concerns with e-enablement
"Ombudsmen raised more concerns with e-enablement than other members of staff, who generally voiced more positive attitudes towards this key change project" NAO Para 3.15 page 33

Ombudsmen not bought into new reward scheme
Ombudsmen not bought into a new collective reward scheme for all staff
NAO para 2.17, table
page 27

FOS ombudsmen have medieval powers to decide cases using pretty well whatever means they think fair and reasonable. No challenges or appeals are allowed, so mistakes are rarely discovered and their decisions are therefore always right. They can do no wrong. Their concerns about change and e-enablement may reflect their perception of their own authority.

I don't know what this new reward scheme is, nor why the ombudsmen have not bought into it (para 3.15). The NAO report makes no mention of the controversial bonus scheme paid to adjudicators to encourage them to hit case closure targets, perhaps this has been withdrawn ?

FOS can't understand consumers letters on complex subjects
"A key challenge [for FOS] is eliciting as expeditiously as possible the underlying issue that the complaint is about, from consumers who are naturally not experts in financial services".NAO Key findings page 7
Well, If FOS tell consumers to put their case in their own words, and won't pay advisers' fees even if the consumer wins, this is going to happen. That's why some claimants use CMCs.

FOS apparently sees no conflict in financial businesses using professionals to put their side of the story so the firm's case will usually be brilliantly presented, benefiting from a deep knowledge of the issues, the financial product, FOS methods and standards, perhaps even the FOS personnel handling the case. The firm's presentation is then judged against the "in your own words" approach preferred by FOS for consumers.

I have always thought this arrangement was one sided; clearly biased in favour of the firms, and it seems NAO ( who refer to this as a "key challenge" ) see problems here too. If FOS has difficulty understanding the case issues, the outcome is not likely to be good. The matter is not helped by the inexperience of large numbers of newly recruited junior adjudicators, and in fact new staff at all levels, and in my experience it is not only the consumers who do not understand the issues.

NAO actual review in full
NAO website
Evershed's comment on NAO report

11 Jan 2012 ... FOS declines to answer freedom of information request on grounds of expense
The FOS has answered an FoIA request made by the "What do they know" website to name banks which have not been charged any case fees recently, but have declined to give some information about which banks have less than the minimum number of complaints to trigger a case fee (currently 3 cases), on grounds that it would cost more than £450 to provide the answer.

What do they know website case details
Actual FOS response, with list of banks

Jan 09 2012... Ex FOS operation director, Simon Rouse is appointed Director, Bancassurance at Banco Santander
Simon Rouse left FOS in November, after only 16 months and now we know where he has gone. No information is available about why he left, and FOS has made no comment yet. FOS is undergoing a period of massive increase in workload, staff turnover and recruitment. A difficult year ahead is expected with PPI cases increasing fast.

According to Wikipedia, bancassurance is "a relationship between a bank and an insurance company whereby the insurance company uses the bank sales channel in order to sell insurance products". Mr Rouse will have seen the problems sometimes caused by this, during his time at FOS.

Interim Operations Director recruited for 1 year only
FOS have appointed Chris McDermott as interim operations director to replace Simon Rouse. No explanation is given on FOS's website as to why Mr McDermott's appointment is described as interim but other reports indicate that he will stay for 1 year until FOS finds a permanent replacement.

FT Adviser reports that an FOS spokesperson "pointed to the FOS’s recently published budgets and plans for the next financial year as to why the appointment was only for a year". Not sure what they are getting at here, but I doubt if FOS would have chosen two people to do one job ( with a further shake up required in a year) if a suitable permanent figure was available. FOS also failed to recruit a new company secretary recently and the interim post holder, Julia Cavanagh, got the job full time. Perhaps Mr McDermott will get the word next year ?

New FOS Executive Team
LinkedIn entry on Mr Rouse
Wikipedia on bancassurance
New operations director job advertisment
Citywire report

FT Adviser

5 Jan 2012... Board fails to recruit new Company Secretary and still concerned with staff turnover.
The FOS Board meeting on 19th October was told that the search for a new company secretary had been unsuccessful. No details were given about the methods used to search, but the post was not advertised on the FOS careers website or its recruitment consultants. Julia Cavanagh, who was doing the job on an interim basis since Barbara Cheney left in early summer, has been given the job permanently. Whether this is an ideal solution is unclear since FOS is stated to be still looking for "someone with the appropriate expertise to provide the requisite risk and governance oversight".

The board also discussed the Q2 performance review and challenges concerning staff turnover, timeliness including the 3 month timeliness target, case load volumes and other matters. The discussion on Q3 mentioned the large intake of new staff and the time to get them fully productive. (Despite this, recruitment has continued until present, so even more new staff are joining). Gareth Thomas MP has recently asked about FOS staff numbers in the House.

23rd November was the first board meeting after the departure of the operations director, Simon Rouse. The minutes record no thanks for his time at FOS or best wishes for his future career, etc.
Minutes of 19 Oct 2011 board meeting
Minutes of 23 Nov 2011 board meeting
Gareth Thomas's question in the house about FOS staff numbers

12 Dec 2011... A correspondent on the Consumer Action Group FOS forum is affected by FOS staff turnover
He tells how his wife's case had been affected by staff leaving the FOS and others taking over her case. FOS then ruled in favour of the bank, despite all the paperwork having been lost...link to details below.

Staff turnover amongst adjudicators has been a big problem for FOS and was discussed by the Board at their board meeting in July. Since then there has been a very large recruitment campaign. The FOS Operations Director also left recently.

Consumer Action Group forum case details
FOS board July meeting discusses adjudicator turnover

27 Nov 2011... 2 cases in the press where FOS thought low offers were acceptable. Consumers eventually got more by persisting with their claims

Thisis money.co.uk has one story, scroll down to "Complaints to Nationwide were ignored"
The other case is in the Observer 27 Nov  Around £5000 lost fraudulently, FOS thought £100 offer was "reasonable"

19th Nov 2011... Major FOS recruitment drive starts as a senior manager leaves amid high staff turnover

FOS seems to be in some sort of recruitment crisis.
It appears PPI cases have risen from 1000 to 3000 per week. Despite advertising for adjudicators several times in 2011, a new campaign has just commenced for permanent, contract and temporary "PPI adjudicators" and "mortgage complaint adjudicators" against a background of concern at FOS board level and elsewhere about adjudicator turnover.
Update 27 Nov, all PPI posts removed from Randstad website

Team leaders are also required and now also ombudsmen. £65k-85k

All this happens just as the operations director, Simon Rouse, has left, and the operations planning manager may also have gone, (his post has been removed from the senior operational team).

Operations director and ombudsman applicants must apply direct to FOS, Randstad, the new £4,000,000 recruitment consultants does not list these positions currently as far as I can see.

David Thomas has a title change from "Principal Ombudsman" to "Lead Ombudsman". Whether this is up, down or sideways is not explained. He was listed on the FOS website "executive team" page but is now shown on the "ombudsmen team" page. Mr Thomas is one of FOS's most senior and experienced managers, appointed soon after the service was set up. He acted as chief ombudsman for some months when Walter Merricks resigned. He was expected to retire in 2011. A move with only 6 weeks to go to the end of the year, suggests he may be staying on to steady the ship.

Randstad recruitment
FOS careers web page, job details and how to apply

18th Nov 2011... "IFAonline" website reports that an FOS adjudicator was appointed after just 1 month of training
IFAonline.co.uk reports that at 25 yr old law graduste has been appointed at FOS after just a month of training. It seems this came out because someone's son was boyfriend of the adjudicator concerned. ( I wonder if he still is ?)
FOS confirm they are recruiting "heavily" and have defended their selection and training policies.
IFA online magazine article about this adjudicator
Adjudicator qualifications and experience have been a concern for some time, with IFA's saying their qualifications are far higher in financial services matters than the adjudicators ruling on their cases, this applies to ombudsmen too. Few, if any ombudsmen are IFA qualified, but can make un-appealable decisions that could ruin an IFA's business and career. It not right.

FOS are currently recruiting for adjudicators, team leaders and ombudsmen, whether this is due to high turnover or PPI pressure, or both, is not known.
FOS careers website with job details

17th Nov 2011... FOS twitter feed offers help to tweeters
The FOS official twitter feed seems to offer a direct route to FOS assistance via a phone call to whoever is running the twitter account. Tweeters with problems are offered a phone number to ring. Check the FOS twitter feed for details.

There is not much activity on FOS twitter...but I regret to say it's a great deal busier than my own "@FOS_problems" twitter site which is now published at the top left of this webpage. Readers are free to add comments, or better still join as a follower. Click on "Join the conversation"

STOP PRESS...Our Twitter followers rise by 25%...there are now 5 !
Bad news...down to 4 !
FOS's own twitter feed

10th Nov 2011... FOS declares "commitment to transparency" then proposes to publish all ombudsmen's decisions whilst adjudicators' (89% of total) will remain secret. Responses to the consultation should be sent by 9th Dec. My response can be viewed here

According to the consultation paper and annual review, adjudicators handled 89% of FOS cases and ombudsmen handled 11%, so there is no possibility that omitting adjudicators' decisions (FOS calls them "views") can properly represent FOS work or standards as a whole. Leaving out 89% of the cases is likely to lead to stiff criticism of FOS's declared "commitment to transparency" and must surely damage the service's credibility. Some people may ask why FOS wishes to keep these views secret ? The consultation paper's arguments are weak on this issue.

The impression of FOS standards will be further biased because the ombudsmen are the experts and expected to get it right (there is no appeal against ombudsmen's decisions). The adjudicators are a much larger, less experienced, lower qualified group, with a high turnover, where any mistakes must be more likely to occur. Adjudicators also receive incentive payments to meet case closure targets which increases pressure on them. On Nov 5th 2011, The Times reported a case when an adjudicator got it wrong and was overturned (eventually) by an ombudsman.

It should be said that FOS may have, at last, realised that problems exist in this area. A recent advert offers some adjudicator jobs at double the usual salary (£47k), and asks for graduate applicants for some jobs. FOS is also piloting a new "masters" level adjudicator qualification programme.

The Government has made it clear that FOS should publish final decisions in the future. FOS is consulting on how this should be done. The consultation is aimed at "financial businesses, consumers and those representing them – as well as other stakeholders interested in the work of the Financial Ombudsman Service". There is no reason why members of the public or firms who have been affected by FOS decisions should not respond to the intention to publish these in future.

The consultation document is a well argued readable paper in plain english which gives the FOS reasoning and intentions. The primary flaw in FOS's arguments is their intention to hide the adjudicators' views and doubts about how they can handle and present the vast amount of information to be published. The Operations Director has just left so all this presents a tough start for his replacement.

The FOS consultation document and how to respond
My response to the consultation
FOS board July meeting discusses adjudicator turnover
FTAdviser article quoting Natalie on the bonus of £4000, also Jane Sanders

5th Nov 2011... FOS criticised again by "The Times"

A further article by Laura Whately in the Money pages of The Times draws attention to the uncertain way FOS handles complaints where a credit card PIN was used fraudulently. An adjudicator's initial ruling in favour of the credit card company was overruled by an ombudsman after The Times drew attention to the proper legal position and FOS re-considered.
Due to The Times paywall, I cannot give a meaningful link to this article.
More detail is available in my August panel opposite (CASE1)

Excellent tip from the Consumer Action Group Forum.  If necessary, remind FOS of their statutory powers
If you are using FOS to settle a dispute with a firm and the firm won't send you information that you need, FOS have apparently been known to say they have no powers to force the firm to provide the information. A member of the Consumer Action Group FOS forum points out that the Financial Services and Markets Act specifically gives FOS power to require the firm to provide the information.

FSMA para 231 has the details
Consumer Action Group FOS forum

FOS knows best ?... Not this time !
Taking court action resulted in 30x more compensation than the adjudicator thought 'fair and reasonable'

A report on the Consumer Action Group website tells of a case where FOS looked at the dispute and found that the bank had done nothing wrong. The claimant asked for the case to be reviewed and FOS changed its mind, the adjudication was in his favour. The bank decided to appeal to an Ombudsman, but after some discussions they did offer to settle and offered £150 compensation for inconvenience. The claimant said this was not enough but the bank declined to pay more and FOS said the matter should now go to an Ombudsman for final decision.

The adjudicator seemed to know in advance what the Ombudsman would decide, he told the claimant "an ombudsman is likely to consider the bank's offer as fair and reasonable in the circumstances and a decision is likely to reflect this".
The claimant did not want the huge delay necessary to allow an Ombudsman to decide on the case, so he took the bank to court. The bank settled out of court (at the last minute), paid £4500 compensation, removed a default from his account and paid his costs !

What can we learn from this, (please read the full story from the link below):

  • FOS seem to have changed their 'initial' decision.
  • The adjudicator was wrong in his assessment of suitable damages, the bank paid 30 times more than he thought was "fair and reasonable". We do not know the adjudicator's qualifications or experience.
  • The FOS adjudicator tried to pre-judge the Ombudsman's decision "an Ombudsman is likely to consider etc. etc.", apparently to try and discourage a referral to an Ombudsman. This has implications for the impartiality of what the FOS consider to be an 'appeal' to an Ombudsman.
  • The bank asked for the matter to be referred to an Ombudsman, they were confident the adjudicator's friendly decision would be confirmed.
  • The adjudicator did not take the authority to actually SET the compensation at what he thought was a fair figure, he just passed messages back and forth and accepted what the Bank offered.
  • The bank caved in when faced with court action with the prospect of a Judge looking at the facts.

Read the full details on the Consumer Action Group website, including the text of the adjudicator's letter pre-judging the Ombudsman's decision

"Ombudsmen who are an affront to the rule of Law"

This is a most interesting talk by Anthony Speaight QC to the Professional Negligence Bar Association in January 2011. It refers to the way the FOS operates and concerns that the Legal Services Ombudsman may be going the same way. The talk generally refers to things from the IFA or Financial Firms' point of view, but the principles apply to consumers as well, the same FOS staff are involved. He has some interesting quotes from Jane Sanders the FOS whistleblower and comments on FOS's failure to follow some of Lord Hunts recommendations. Here are some snippets:

"There is a lot of talk from FOS about how much it values transparency, but the reality seems to me to be that it is a somewhat secretive organisation. For instance, Jane Sanders
(an ex adjudicator)

"Whilst at FOS, I was told that I must reply, when challenged, that my qualifications have no bearing on the job at hand; I do the job at hand because FOS says I am competent to do so. Under no circumstances was I to reveal my qualifications.
It was explained to me when I questioned what appeared to me to be a ridiculous stance that the position was that the training was so comprehensive that the background qualifications I held were of little consequence; this despite the fact that formal induction to the service is actually 1 week and you begin issuing views under a mentor a few short weeks later"

"FOS decisions have been observed to contain the same passages of text over and over again
The explanation for this provided by Jane Sanders, a barrister who previously worked at FOS, is that standard text is provided by the FOS computer system. That system has been created so as to take a decision writer step by step through a tree of decision-making. She has written:-

"You input data onto Excellence (the all singing and dancing database designed to support adjudicators in the Endowment team) including the complainant's policy number, target maturity sum, basic sum assured, number of dependents, the complainant's age and other salient factors from the point of sale and press a button.

Voila! Excellence creates a template letter which, in the loosest way possible, was tailor made to the complainant's case. You then take further standard paragraphs, emailed to you from your mentor, for you to store on your system, and apply them depending on the type of case you have, and pad out the letter until you have something that was considered acceptable".

The article in full
More quotes by Jane Sanders

Lawyers Peter Hamilton and Antony Speaight QC submit proposals to the Treasury about a major reform of the FOS.

"In response to the Government’s second round of consultation, Anthony Speaight, QC, and I have submitted a paper to the Treasury in which we have set out our constructive proposals for the reform of the FOS. We have had a meeting with the Treasury to discuss our ideas."

Peter Hamilton's article
More detail of the proposals

FOS staff 'not qualified' to adjudicate, says MEP
European Parliament member Geoffery Bloom MEP writes critical letters to Natalie Ceeney about the FOS

Mr Bloom wrote:
"If it is a serious FSA requirement for an advisor to be specially qualified to give advice on a pension transfer it is surely commensurate with professional natural justice that the adjudicator is at least equally qualified. One might argue more so."

We do not know the full details of what was written originally by either party to give rise to this response, but the letter makes very interesting reading. It seems the European Parliament is taking an interest in FOS's medieval powers, and the absence of any appeal. Here is a taste of it !

"Thank you for your response, I detail here why I find it unsatisfactory and certainly not supportable in my capacity as a member of the Economic and Monetary Affairs Committee which now holds the ‘watching brief’ for UK financial regulation."

"I do not support this breach of English Law principles. I do not believe any procedure which can lead to the loss of jobs or livelihoods should be outside the scope of statute or common law, the presumption of innocence and trial by one’s peers. A judicial review is laughably inadequate, just a confirmation the quango followed its own obscure rules."
More details of what happened
Mr Bloom's letter in full

and a UK MP joins in the criticism
Paul Burstow, Care Services Minister writes too

Mr Burstow threw out Ms Ceeney's defence of the current system stating: "Natural fairness to me would appear to lie in being able to demonstrate confidence to those being judged, that those sitting in judgement do have a full understanding of both the issues involved and the rules and protocols applying to the cases that they investigate".
More details of Mr Burstow's intervention

It seems an FOS spokesperson said:
"Like a court, we do not require our staff to list out their qualifications after their name, we prefer the quality of their work to speak for itself". For an example of what FOS quality can mean please read this:
FOS case no. 5156222/KM/46

Independent Assessor gets a proper photo on her website
( at last ! ) but her credibility is further reduced by having her Annual Report left out of the FOS annual review !

The IA's own independent website www.independent-assessor.org.uk (which is actually owned and registered to FOS) has had a reverse image of her for the last six months. I cannot believe the IA would print such a picture herself, so it looks as though FOS put the picture there when they made up the website for her. Whatever...it has been there embarrassingly since December 2010. Anyway, at last someone has taken the trouble to put a proper picture of the IA on her own website.

In a yet a further setback to her authority and credibility, the IA's annual report has not been published in the FOS Annual Review for 2010-11.

Some confusion now surrounds this !   In the second week of June 2011, after the publication of the FOS annual review, the IA's personal website was changed to state that her annual report would be not be published in the annual review, but in the annual report. This is new...for the last 8 years the IA's report has been in the FOS annual review. The FOS Directors report is formal document containing the board's annual report and audited financial statements, I doubt if many ordinary members of the public read it, whereas the annual review is much more accessible to the public.

Further confusion is caused by the 2010-11 annual review itself, which only mentions the existence of the IA on page 72 where it tells us nothing about her work and says her annual report will be published on the FOS website.

We shall have to wait and see where and when the IA's report finally appears, and whether the board write a response to it as required by the IA's terms of reference item 16.

The Independent Assessor remains a job with a very high salary (£56k for 2 days a week) but little authority or responsibility. She can ask questions, but FOS can decline to answer, and she can make recommendations but FOS can ignore them. Now there is a list of things she must not comment on and her annual report is not worthy of inclusion in the FOS annual review. The role needs a complete overhaul, see my separate article.

The removal of the IA's report from the annual review does look like a reduction in status and importance for her. There must be a reason ...
On top of the recent changes to her terms of reference, I wonder if she is happy in her work ?

Independent Assessor's new personal website (with new pic !)
FOS website about the Independent Assessor with terms of reference
My view of the Independent Assessor's role (now with updated example)
FOS Annual Review (PDF file 1.6mb)
Independent Assessor's Annual Report-(skip to page 60)

7 Trade Bodies call for curbs to FOS authority
Association of British Insurers, Aifa, the British Bankers’ Association, the Building Societies Association, the Council of Mortgage Lenders, the Association of Financial Mutuals and the UK Cards Association are writing to Treasury Financial Secretary, Mark Hoban.

Main points:

  • The FOS’s role and relationship with the Financial Conduct Authority to be clearly set out in statute to give firms confidence that if they comply with FCA regulations they will not face retrospective interpretations of the rules
  • For the FOS to be removed from the process of determining regulatory issues with wider implications to stop the ombudsman straying into regulatory functions
  • For consideration to be given to claim management companies being regulated by the FCA rather than the Ministry of Justice and to CMCs contributing to funding the ombudsman
  • For the FOS’s right to prevent firms taking test cases to court when important or novel points of law are in evidence to be removed
  • For the FCA to undertake regular reviews of the FOS’s operations, policies and procedures but not compromise the ombudsman’s operational independence
  • That the FOS be required to consult with stakeholders before issuing policy notes or guidance.

Read more
FOS responds

The FOS Board is concerned about the Service's reputation and finances.  
The FOS Board meeting 1st Feb 2011
had an interesting comment on the future, the Board agreed that (underpinning various priorities), "was the criticality of coming through the next year with the Service’s reputation intact and with the cost basis on the correct footing".
For such a comment to appear in the Board minutes, there must be real concern about these matters despite Natalie's comment recently that "We're not taxpayer funded so should not be affected by public sector funding reductions".
FOS Board minutes Feb 2011

FOS compares Adjudicators' and Ombudsmen's qualifications with Judges and Magistrates
"What makes a good adjudicator or ombudsman is more than just letters after their name. It is the ability to stand back and listen to all sides of the story – to weigh up the arguments and arrive at decisions fairly and impartially.
This is also the defining characteristic of judges and magistrates – who similarly don’t need to list their qualifications to demonstrate their ability to do the job."
FOS careers page

FOS Feb 2011 Board meeting discusses staff attrition rate and the current 7 months it takes to get a Adjudicator up to speed.
( A recent advert for Adjudicators was for a 9 month contract ! )

  • FOS admits to high attrition rate of staff during their probation period, so comments about this on another web site may be correct. On another forum (post #108) a contributor says last year FOS recruited about 100 contractors on £210 per day...he was one of them. Not a move calculated to raise morale among the new Adjudicators on less than half that and a nine month contract. Could this have affected the attrition rate, I wonder ?
  • New procedures will get Adjudicators "up to speed" within 4 months... apparently it now takes 7 months. New adjudicators are on a 9 month contract so as soon as they are up to speed, they depart.
  • PPI cases are putting "pressure on operational systems" at FOS.
  • PPI cases are also causing concern with regard to FOS finances.

FOS Board minutes Feb 2011

Independent Assessor has new Terms of Reference. Authority further restricted, few other changes

In an Orwellian restriction on the IA's already limited authority, the FOS Board has produced a list of items which she is not permitted to comment on !
So if she investigates a service complaint and in doing so, comes across a serious error of judgement by FOS, we know she cannot investigate this, but now she is not even permitted to comment on it !

It would be nice to know if these tighter restrictions on the IA's role have been introduced because the new IA has dared to speak out...Perhaps she will explain in her first Annual Report

New Terms of Reference
FOS Board minutes Dec 2011 (IA's first report, see para 7)
My view of the Independent Assessor's role (now with updated example)

Independent Assessor has new (independent ?) website domain owned by FOS

The purpose of this is unclear as it contains little information not already on the main FOS site, however the IA writes in her own words.  She defends her independent status but I am not convinced by her explanation, particularly her reassurance that she has had 3 jobs with "Independent" in the title !   

As long as the IA is appointed, paid and works closely with those she is assessing, I don't think she is 'independent' in the sense of the word that most ordinary people understand.

The IA's independence is not helped by her new website domain name "independent-assessor.org.uk" being one of several "independent-assessor" domain names actually registered as being owned by FOS itself. She has also chosen to use the same photo as the FOS independent assessor website page. Unfortunately the photo is printed back to front !  I can't imagine she would deliberately print her own picture the wrong way round on her own website so, combined withe the domain ownership, I think there is a possibility that the site may not be as independent as it looks.

The IA remains a job with a high salary but little authority or responsibility. She can ask questions, but FOS can decline to answer, and she can make recommendations but FOS can ignore them. Now there is a list of things she must not comment on. The role needs a complete overhaul, see link below to my separate article.

BUT, the new site does clear up one mystery. The reason she uses a PO Box rather than a normal postal address. It seems this is to keep her mail separate from FOS mail. Well...that certainly seems a good idea !  However why this task cannot be entrusted to the FOS mailroom is not explained. She does now publish her email address though, it is:

Independent Assessor's new website
FOS website page about the Independent Assessor
My view of the Independent Assessor's role (now with updated example)