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MP seeks answers from Financial Ombudsman following damning claims

Paloma Kubiak
Written By:
Paloma Kubiak

The Treasury Committee chair has written to the chief executive of the Financial Ombudsman Service seeking answers, after an undercover report revealed a number of damaging claims about the adjudicator.

Earlier this week, Channel 4 aired its Disptaches programme where a journalist went undercover at the Financial Ombudsman Service (FOS).

The reporter spoke to current and former staff who judged cases, and they admitted they received inadequate training, didn’t understand products so would often Google information. They also said they made decisions in favour of banks to ease workloads, reach targets and receive bonuses.

As such, a question mark now hangs over whether hundreds of thousands of cases may need to be re-examined if the wrong decisions were made in consumer cases.

Following the programme, Nicky Morgan MP, chair of the Treasury Committee, has written to Caroline Wayman, chief executive and chief ombudsman of FOS for further comment and clarification on the following points:

  • FOS’ processes/quality control on previous decision making. Does the FOS have the ability to reopen cases which may not have been decided correctly?
  • Does the FOS recognise a reluctance to issue a public decision for fear of creating a precedent and—if not—how does the FOS explain the evidence provided in the programme?
  • The programme suggested that there is a potential bias to decide in favour of a bank, since that led to an easier path to closing a case. Does the FOS recognise that potential bias, and if so, how does it combat it?
  • Provide full details on the seemingly forgotten cases and unopened correspondence described in the programme.
  • A comment on the training and specialism of staff at the FOS, addressing allegations that ‘under qualified’ staff are responsible for making decisions on cases
  • Estimated number of people who may be affected by alleged errors or improper handling of cases
  • A response to the allegation that the FOS ‘stage managed’ Rushanara Ali MP’s visit to its offices in 2015.

In the letter, Morgan, wrote: “The Committee would welcome any other comments that the FOS might wish to provide on the issues raised on the programme. In particular is it your intention to hold an internal review into any or all of the issues raised in the programme?”

The MP requested that the FOS regularly inform the committee on progress made of those points, adding that she would be grateful to receive a response of the letter by 27 March 2018.