A retired adviser has been billed £550 to pay for a complaint to the Financial Ombudsman Service which wasn’t upheld.
Richard Iwanek, who worked as an adviser in Warwickshire for more than a decade until he retired in 2012, had to fend off a complaint he mis-sold pension contribution insurance.
But when the complaint was dismissed by both his network Personal Touch, and by the ombudsman, he still faced a bill of £550.
“The person who complained hasn’t paid anything - it hasn’t cost them a bean. It seems to me to be a very unfair system,” he stated.
“I have paid the money because I have no choice, but it is annoying when we have a complaint which is not substantiated by the network for the Fos.
“It is a significant amount of money, especially for someone who is retired.”
Mr Iwanek said he was insured with Personal Touch to cover such issues, but the amount charged by Fos was less than the excess.
He added this was his first and only complaint he had received during his financial advice career.
The complaint, which was made to Personal Touch rather than to Mr Iwanek, related to pension contribution insurance which the client alleged had been mis-sold.
But Mr Iwanek said that at the time it had been compulsory to offer this product and the details of how he had advised the client were set out in the suitability report.
A spokeswoman for the Fos said: “We offer a free service to everyone who brings a complaint to us. It is important to note that we only charge a business after the twenty-fifth complaint has been brought against them – so they receive up to 25 free cases.
“Whether a complaint is upheld or not, once we have taken on a formal complaint and have spent time to investigate it, this then becomes a chargeable fee against the business that the complaint has been brought against.”
A spokeswoman for Personal Touch said: “The fee is a direct cost associated to the Fos rather than Personal Touch. Fos fees are generally not covered by the PI insurance that all financial advice businesses have in place for the event of a complaint.
“The standard Fos fee is irrespective of the outcome to fund the service they offer; providing all consumers with the right to get an independent review on their complaint.
“The service ensures consumers are at the heart of the industry and have access to the right support and protection should they need it.”
She added in the most recent published complaints statistics for July 2015 to December 2015, Personal Touch was not referenced in the business breakdown, due to its low Fos referral rate.