The Financial Ombudsman Service is unsure how it will deal with the new EU alternative dispute resolution, which requires complaints to be resolved within 90 days, admitting that the devil will be in the detail.
The ADR directive is a new piece of European law. It means that from 9 July 2015 alternative ways of resolving contractual disputes between consumers and businesses will be available much more widely across the UK and the EU.
The ombudsman will continue to be the ADR service for financial complaints. Under the ADR rules, the Fos should aim to give answers to complaints within 90 days of receiving the complete complaint file. However, it is unclear as to whether the 90-day rule is kick-started if a consumer rejects a decision, meaning it goes to the ombudsman.
When questioned by FTAdviser about how the rules will be implemented, a spokeswoman for the Fos said: “Until this comes into force it is quite difficult for us to comment on the detail of how this is likely to pan out.”
In the latest Ombudsman News, published today (23 June), Garry Wilkinson, principal ombudsman and director of new services, explained that the organisation has experience in turning things round within that time span, but they are still testing and developing new ways of working to ensure they keep up with the regulations.
The ombudsman already aims to give answers to consumers within three months, provided it has all the information needed to assess it properly, and already meets most of the directive’s requirements, like being free for consumers and having online complaints forms.
“If we think a case can be sorted out relatively simply then we would look to gather information from a business over the phone or in a couple of days via email,” explained a spokeswoman for the Fos.
“The response time we give to the business largely depends on what we’ve asked for, if it’s a straight forward question we’d expect an answer straight away with the absence of rigid timescales.”
The ombudsman stated that the impact on workload remains to be seen, but they are constantly testing and developing new ways of working so this will not come as a surprise to businesses.
“From our experience of many years we have appreciated the shift in working culture. It has helped identify the areas that could be done differently, for example, the use of more informal communication methods via web chat or social media to help get answers more quickly,” the Fos stated.
It did admit however that there may be some “highly complex” cases that will take longer than 90 days to sort out – for example, when they are affected by something like a court case.
“If we think a case will take longer than 90 days, we’ll write to the consumer and business to let them know how long it will take. But in most areas of our work, cases like this should be very much in the minority.”
The Fos added that it will continue to work closely with the Financial Conduct Authority to show how the aims of the directive are being put into practice.
“But this doesn’t change the fact that we’re independent of the regulator in the way we investigate and decide individual cases.”
Alan Lakey, director of CIExpert, told FTAdviser that he has not had a complaint in five years, but his last experience with the Fos took him around 15 months and a lot of chasing to get an adjudicator to reach a decision.
“Unless they’ve been working miracles since then, I can’t imagine how they’ll be able to achieve a 90-day turnaround in a significant amount of cases.
“It’s to do with the time it takes to accumulate evidence and then work through it to figure out exactly what happened. This is easy with PPI, but for anything more complicated it will take adjudicators longer than three months.”
peter.walker@ft.com
