Thousands of cases could be re-opened at the Financial Ombudsman Service (Fos) following allegations its staff were insufficiently trained and making off the cuff decisions.
The Personal Investment Management and Financial Advice Association (Pimfa) called for an immediate independent review of past cases at the ombudsman after an investigation by Channel 4’s Dispatches programme alleged some decisions may have not been fair to consumers.
Liz Field, CEO of Pimfa, said: “It is imperative that individuals feel confident they can seek redress if something has gone awry to avoid severe detriment to individuals lives.
“We therefore support the call for a review of past cases that remain questionable in a bid to prove that cases have been dealt with correctly.”
The Fos has been inundated with claims in recent years, handling more than 300,000 new claims a year - payment protection insurance alone has produced 1.4 million claims since 2010.
Dispatches heard investigators the ombudsman had been churning out decisions as they scrambled to meet targets and that it had not been “ feasible” to handle all the claims.
In some instances, it is alleged, staff did not know the products they were dealing with and sometimes just found in favour of the bank which was deemed “easier”.
Former pensions minister and consumer champion Ros Altmann said she was "shocked" by the Dispatches discoveries.
She said: "No organisation is perfect but the scale of what I saw on their recordings (not all were included in the program) was much worse than I would have imagined.”
She said staff appeared under pressure to cut corners and had not even read the complaints people had painstakingly put together.
They were also discouraged from passing too many cases on for further investigation, “thereby turning applications away which might have deserved to be properly investigated,” she said.
“I think there needs to be an inquiry into this service and a change of practice to ensure better consumer protection.”
Fos responded to the allegations in a statement on its website, saying its non-executive board would undertake a review of the concerns raised in the programme.
It was also talking to and supporting people who are getting in touch with concerns about their own individual cases, it told FT Adviser.
It could not say at this stage how far the review would go in terms of individual cases.
The statement said: “The Dispatches programme on the work of the Financial Ombudsman Service gives an unfair impression of us.
“Every day we make difficult judgement calls that affect people’s lives. Our people are committed to doing the right thing – and we’re determined to provide a fair and trustworthy service for our customers and the best support for our staff.”
Concerns at the Fos first surfaced in July 2016 when a planned restructure came under fire from some employees claiming the shake-up would deliver quick, but not necessarily appropriate decisions for consumers.