James Coney 

Decent, fair behaviour goes a long way

James Coney

James Coney

Every time I’ve heard a consumer complain about the Financial Ombudsman Service it has always been followed by one allegation.

They would grumble: “It’s in the pay of the banks” (or insurers, investment houses).

I’m certain there are plenty of financial advisers, particularly those who have had a slew of complaints against them, who will guffaw at this notion.

The funding model – where firms pay for complaints against them after a certain point – has always seemed eminently weighed in favour of the consumer. 

But to many with a grievance against the Fos, the fact that it is financial firms funding the budget means the two must be in cahoots. 

I have always found the Fos to be fair. Its decision-making has been eminently reasonable – no matter which side of the argument it comes down on.

At the heart of this was a spirit that said service adjudicators should always look at the expectation of the consumer, what they could have known, and the transparent way the financial firm dealt with them.

Consumers out to make a vexatious complaint often ended getting caught out by their lack of honesty.

But as the Fos has grown, the reliance on common sense – the so-called reasonableness test – has been replaced by a more box-ticking culture, and worse still, shock horror, computer algorithms.

The sense of integrity seems to have disappeared. Increasingly, consumer complaints that crossed my path started to look unfairly handled. 

The review into the service by Which? director Richard Lloyd recently revealed that there was no systemic bias, but there were failings.

The fact that national TV programmes have started asking whether this was the case should be bad enough.

Instead of objecting to this, it would do the ombudsman a great service if it embraced its own inadequacies.

The Fos is chronically overstretched. The payment protection insurance (PPI) scandal and the dawn of a new breed of claims handler placed an incredible burden on it.

The banks are to blame for this. If they had simply handled PPI honestly in the first place there would be no need for an ombudsman at all.

And there is certainly no culture of wrongdoing.

But in trying to find systems and common approaches to get through the backlog, core principles seem to have gone by the wayside.

The ombudsman needs to return to the spirit of the original service. 

It does not have to be an advocate for the consumer – that would mean it loses independence – but it does have to understand human behaviour.

Computers cannot do this. Standardised questionnaires with boxes to check cannot do this.

Only human decency and a fair mind can turn the ombudsman back into the great service it once was.