The Financial Ombudsman Service has secured £22mn in redress for consumers via a temporary initiative which encouraged businesses to settle complaints swiftly.
In an update today (May 24), the Fos said as part of its push to get more businesses to settle claims early, it has had more than 90 businesses make 6,877 offers to customers.
Last year, the Fos proposed to present proactive offers from businesses "neutrally" to clients, essentially making clear that in putting the offer forward, it could not confirm whether it thought the offer was fair or not.
During feedback to the proposals in November, it said financial businesses and organisations representing consumers were concerned this could inadvertently present a risk to fair and consistent outcomes for consumers, as well as impact the ultimate effectiveness of the initiative.
Instead, it agreed to review offers made by firms to their clients in early settlement cases amid concerns taking a more neutral stance could jeopardise fairness and consistent outcomes.
In the results of the temporary initiative published today, the Fos said it secured up to £22mn in redress for customers, which included more than £10mn of redress in “authorised” scam complaints, with more than 2,000 victims being refunded the money they had lost.
The average offer to customers made through the initiative was £3,200 per case.
Alongside the 2,000 fraud cases, the Fos’s initiative has helped resolve around 4,800 customer complaints about a wide range of issues including e-money services, personal loans, motor finance and credit card purchases.
Fos chief executive and chief ombudsman Nausicaa Delfas, said: “We are delighted that many financial businesses have responded to our initiative and have helped customers get their complaints resolved more quickly. This was just one of a range of initiatives we put in place to address the large backlog of complaints received during Covid-19.
“The backlog is now a third of what it was at the beginning of last year. We are now moving forward with our action plan to change and improve the Financial Ombudsman for the future.”
The initiative began in November 2021 and finished at the end of March 2022. For a limited period, complaints that were proactively settled by businesses before the Fos had issued its opinion did not count towards the business’s uphold rate.
The firms who made offers to customers as part of this initiative are:
|Business||Number of offers made|
|Natwest Group PLC||1,039|
|PayPal (Europe) Sarl et Cie SCA||862|
|Lloyds Banking Group||834|
|Santander UK Plc||673|
|Barclays Banking Group||503|
|TSB Bank plc||157|
Source: Fos update
The Fos said its front-end queue fell from around 90,000 to just over 37,000. In December, this was around 43,000.
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