The Financial Ombudsman Service (Fos) has been accused of ignoring key details of complex complaints, and taking too long to consider more difficult cases.
Peter O’Donnell, chairman of the Mortgage Claims Bureau, said his clients have been left in limbo for months, and subject to “lucky dip decisions” by Fos.
He claimed the delays relate to complaints he has lodged which are more difficult than the adjudicators are trained to handle, involving investments into offshore or off-plan property and related equity release loans to pay for the property deposits.
The criticism follows changes in how Fos deals with claims, revealed by Financial Adviser last month, which have been lambasted by some of Fos’s own staff as increasing the risk of wrong decisions.
Under the new structure, the person at Fos who first receives the complaint will consider it – regardless of whether it is about a type of product in which they have specialised knowledge.
Mr O’Donnell accused the service of a decision-making process which failed to consider all parts of complex claims, which he said contradicted the required independence of adjudicators and ombudsmen.
He also questioned the consistency and methodology of the ombudsman, and complained to the independent assessor which acts as Fos’s watchdog.
Out of 41 complaints from his firm to Fos, two have been provisionally upheld after seven months.
During the same period his firm’s clients had 68 payouts from the Financial Services Compensation Scheme, rising to 95 payouts out of 102 lodged to date, though the two bodies use different decision-making processes.
In response to his complaint about Fos, Mr O’Donnell was told by an omdusman team leader, who was unamed in the note, that the ombudsman service provides an alternative to the court, not a replacement.
Mr O’Donnell said: “Fos seems to be an entity created by the government to have a sweet political face for clients who feel they have been wronged by a financial institution.
“Maybe on a PPI claim that’s valid, maybe on a bank charge that’s valid, but on a mis-sold investment and equity release interest-only mortgage to finance it, they are totally out of their depth.”
A spokesperson for Fos said the service followed rules set by the Financial Conduct Authority to take into account relevant law and regulations, regulators rules, guidance and standards, codes of practice and, where appropriate, what they consider to have been good industry practice at the relevant time.
They added: “We publish each of the final decisions we reach to help show how we have applied those approaches – we find that cases which may look superficially similar may have different outcomes because there are material differences between them.”
