The Financial Ombudsman Service was set up as a last port of call for consumers who felt their complaint hadn’t been properly dealt with by a provider or adviser.
Ten years ago there was roughly 350 members of Fos staff, including 20 ombudsmen, handling 20,000 cases.
Today there are 4,000 members of staff handling roughly 500,000 cases and 300 to 400 ombudsmen.
In 2018, the Fos is no longer the last port of call but is increasingly a dumping ground for complaints received by the big banks who sneakily tacked on payment protection insurance (PPI) to other products.
The ombudsman has been inundated with claims since the PPI scandal broke, handling more than 300,000 new claims a year and 1.4 million claims on PPI alone since 2010.
It has been forced to become a complaints sausage factory rather than the safety net it was set up to be by greedy and lazy providers who rather than handle a complaint instead send it straight to the ombudsman to deal with.
Something also needs to be done about why it has become this gigantic organisation rather than just tut and sigh about the way the service is now struggling to cope.The Fos has to deal with a growing caseload, demands for it to keep control of costs and staff numbers and make sure they deliver fair outcomes to complaining consumers.
It is a tricky juggling act and clearly one where the ombudsman is now dropping a few of the balls it is juggling.
The Treasury select committee chairman Nicky Morgan wrote to the Fos to demand answers over allegations made in Channel 4's Dispatches its staff were insufficiently trained to deal with consumer complaints.
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.
A spokesman for the ombudsman said the organisation’s non-executive board would undertake a review of the concerns raised in the programme.
Channel 4's expose was far from the first-time issues at the ombudsman have been flagged.
FTAdviser revealed a poll of 2,259 members of ombudsman staff, conducted between 23 May and 16 June, also showed less than one in five (18 per cent) were confident senior management were making decisions that would benefit the service in the long run.
Almost half (49 per cent) of ombudsman service staff felt they had too much work to do.
Undoubtedly the ombudsman could do better and in an ideal world ombudsmen should be as qualified as the advisers whose recommendations they are called upon to judge.
But surely something also needs to be done about why it has become this gigantic organisation rather than just tut and sigh about the way the service is now struggling to cope with what it has been turned into?
Perhaps it is time the government or regulator was given greater powers to act against organisations that are repeat offenders at failing to handle the barrage of complaints that come their way and just pass them over to the ombudsman?
emma.hughes@ft.com
