The Financial Ombudsman Service has proposed extending a change in how it reports cases to help speed up and encourage the earlier resolution of complaints.
The Fos has today (March 6) published a consultation on how it reports business-specific complaints data, and is seeking feedback from stakeholders on introducing a “proactively settled” category of complaints on a permanent basis.
The suggestion follows a temporary change in how the ombudsman reported cases between November 2021 and March 2022 in response to increased demand brought about by the Covid-19 pandemic.
The change meant that instead of reporting on just a “change” and “no change” in outcome in its half-year business-specific complaints, the Fos introduced a third category to record the outcome of complaints - “proactively settled”.
The rationale behind the change was also partly to maintain business engagement with the Fos as businesses had previously told the service they were reluctant to settle complaints due to potential negative public connotations of a higher uphold rate.
The Fos noted that through its engagement with financial businesses, it's clear they place a strong emphasis on their uphold rates as they are seen as an important benchmark, both as an individual metric for firms, and as a comparative measure across industry.
The Fos is proposing to create a separate category in its biannual business-specific complaints data to record any complaint that is resolved by a fair and reasonable offer put forward by a business within 14 days of the Fos requesting its complaints file.
“By setting a time limit for offers to be considered as 'proactively settled', we believe this will drive good behaviour from businesses in providing timely responses,” the Fos said.
Complaints settled in this way would not be recorded as having either a “change in outcome” or “no change in outcome”, but instead would be reported as “proactively settled”.
These outcomes would not contribute to a business’ overall ‘uphold rate’.
“We believe that this would incentivise financial businesses to settle complaints proactively and pragmatically at an earlier stage, which in turn would help to bring closure to affected complainants,” the Fos said.
If enacted, this proposal would cover all new complaints referred to the service, with the aim of them being resolved at an earlier stage.
How it would work
Once a firm receives a file request from the Fos it will have 14 days to choose whether to make an offer to settle the complaint. If it wishes to do this the Fos will then review the offer and decide whether it is fair and reasonable.
If it is deemed fair and reasonable and the complainant accepts the offer the case will close and be recorded as “proactively settled”.
If it is not deemed to be reasonable or the complainant rejects the offer, the Fos will begin investigating the complaint as normal.
A standard case fee would continue to apply to all complaints settled in this way.
Stakeholders have been encouraged to share their thoughts with the Fos on the proposal.
The deadline for responses is March 20, while the Fos will publish its decision by April 3.
jane.matthews@ft.com
