The chief ombudsman has agreed terms with a committee of MPs allowing an independent review of the Financial Ombudsman Service to go ahead.
The review follows allegations made in the Channel 4 programme Dispatches that some decisions made by ombudsmen may have not been fair to consumers.
Caroline Wayman, the chief ombudsman and chief executive of the Fos, has agreed to several requests by the chairman of the Treasury Select Committee, allowing the independent review to go ahead.
Nicky Morgan, the committee's chairman, had requested that the review should not be restricted to the issues raised by the Dispatches programme and that the review must have unrestricted access to all documents and staff, as well as having enough flexibility to identify the root causes of any failings it finds.
She added that the reviewer would need to be "demonstrably independent" from the Fos and must appear before the committee shortly after publishing their report.
In response Ms Wayman said: "I can confirm that our board agrees that its review must be demonstrably independent, and that this is fundamental to its consideration and identification of a suitable candidate.
"And thank you for setting out the points of principle you’d like to see reflected in the final version of the terms of reference for the review: we will of course ensure that they are incorporated in the draft which we put to our board for final approval.
"We’re also content with the proposed arrangements and timings for the committee’s consideration of the review’s findings."
The Fos has been inundated with claims in recent years, handling more than 300,000 new claims a year - payment protection insurance alone has produced 1.4 million claims since 2010.
Dispatches heard investigators the ombudsman had been churning out decisions as they scrambled to meet targets and that it had not been "feasible" to handle all the claims.
In some instances, it is alleged, staff did not know the products they were dealing with and sometimes just found in favour of the bank which was deemed "easier".
These allegations have been strenuously denied by the Fos which said there is little evidence of bias in favour of banks, since around two thirds of cases are found in the consumer's favour in PPI complaints.
It also said that on joining the Fos, all new case handlers take part in a comprehensive training programme – including a session with Ms Wayman about the role of the service and the values of independence, impartiality and fairness.
This also involves six months in the Fos's training academy which includes aspects of the law and regulation which are relevant to their work. It also covers product-specific knowledge, evidence gathering skills, how the service work and the standards it requires.
damian.fantato@ft.com
