MPs demand answers from Fos over staff failings

MPs demand answers from Fos over staff failings

Treasury committee chairman Nicky Morgan has written to the Financial Ombudsman Service (Fos) to demand answers over allegations its staff were insufficiently trained to deal with consumer complaints.

In a letter dated 13 March, Ms Morgan pressed the ombudsman’s chief executive Caroline Wayman on damning issues raised in a Channel 4 programme on Monday (12 March).

The programme, which saw journalists go undercover at the Fos, alleged failings among staff, including inadequate training and a lack of understanding of financial products, which could lead to consumer detriment.

“Some [have] reached decisions in favour of the banks, without properly reading case files,” it was alleged.

Ms Morgan asked Ms Wayman for evidence to assure parliament the problems identified in the Dispatches programme had not led to poor decision making at the Fos.

She also asked whether the Fos had the ability to reopen cases if it feels they may not have been decided correctly.

In the programme Labour MP Rushanara Ali, a member of the Treasury Committee, suggested members of the public might want to go back and have their cases reviewed where appropriate.

The Personal Investment Management and Financial Advice Association has also since called for case reviews where there may be questions over the outcome.

Ms Morgan wrote: “Now that the content of the programme is known, I am writing to you for further comment about the findings aired last night.

“The committee would welcome any other comments that the Fos might wish to provide on the issues raised on the programme. In particular, is your intention to hold an internal review into any or all of the issues raised in the programme?”

Fos said in a statement on its website on Tuesday its non-executive board would undertake a review of the concerns raised in the programme.

The service told FT Adviser it was too early to say whether the board would look into reopening specific cases.

Ms Morgan asked Ms Wayman whether the Fos had the ability to reopen cases that may have not been decided properly.

She also asked for explanation of Fos’ quality control processes in place.

Dispatches alleged there was a reluctance to issue public decisions for fear of creating a precedent, as well as a potential bias to decide in favour of a bank because that led to an easier path to closing the case.

Ms Morgan demanded answers on both those allegations.

She also queried about a visit to the Fos by Ms Ali in 2015, which the programme alleged the Fos ‘stage managed’ to make itself look better.

Problems at the Fos started to emerge in 2016, after the service changed its structure to be able to close more cases more quickly.

Whereas before adjudicators specialised in a product area and were assigned complaints in that area, under the new structure the person who first receives the complaint will consider the complaint.

The Fos has been inundated with claims since the payment protection insurance (PPI) scandal broke, handling more than 300,000 new claims a year and 1.4 million claims on PPI alone since 2010.