Financial Ombudsman Service (FOS)

We were set up by Parliament to sort out complaints between financial businesses and their customers. We can help with most financial services – including banking, insurance, PPI, loans, mortgages, pensions and investments. If something’s gone wrong, we have the power to put it right.

We make decisions based on what we think is fair, taking into account the unique circumstances of each case we receive. This database holds all the “determinations” – or final decisions – that we’ve published under the Financial Services and Markets Act 2000 as amended by the Financial Services Act 2012. *

Treasury Committee

Oral evidence: SME Finance, HC 805

Tuesday 23 Oct 2018

Ordered by the House of Commons to be published on 23 Oct 2018.

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Members present: Stephen Hammond (Chair); Rushanara Ali; Mr Simon Clarke; Charlie Elphicke; Stewart Hosie; Alison McGovern; Catherine McKinnell; Wes Streeting.

Questions 358-432


I: Simon Walker, CBE, Independent Chair of the UK SME Complaints and Resolution Review, and Professor Christopher Hodges, Professor of Justice Systems, University of Oxford.

Q374       Stewart Hosie: This is where I have some difficulties. I have a case—we have cases, and I have many cases—but it has been adjudicated. The first adjudicator found in favour of the constituent. A subsequent adjudication produced a very detailed and accurate assessment of the case. Another ombudsman, however, appeared and changed the whole basis of that thinking and, I am told, suggested that he would conclude what he concluded and that new evidence would not alter his decision. This has been adjudicated, but in my view and that of many others, it has been adjudicated wrongly.

  Simon Walker: Is this by the FOS?

Stewart Hosie: Yes, it is—by the FOS. Where do we go with this? If he happens to fall into the adjudication being around the restructuring in 2016, he will have his case reopened, but because it has been adjudicated, if the timings do not work, it will not be. You are going to have two categories of businesses—one that, finally, may get justice, and another, simply because of the serendipity of timings, that won’t. Would it not be better, if you are going to look at these legacy cases, to take out the caveat about adjudication, unless of course businesses are happy that they got a fair hearing, and to look at them all again?

Simon Walker: I suppose my concern is limits—one has to set them at some point. My concern would also be for the businesses that have settled through existing processes. I think it is unfair to them to allow others to have a second bite of the cherry. I obviously don’t know about your constituent’s case, although I would be happy to take a look at it if that were necessary, but one has to strike a balance between what is actually practical and going ahead. To me, something that reviews cases that have not been assessed—of which there are some going back a long way, way beyond the current jurisdiction of the FOS, which I think is three years or, in some circumstances, six years—seems a sensible compromise.

Q375   Stewart Hosie: Can I just challenge you there? You said it would be unfair on those who have settled for another case to be reopened, but there is nothing inherently unfair to someone who has settled a case and is happy with the outcome about a case where there is still dispute—adjudication or otherwise—being reopened and reinvestigated. It is a false argument to say that it is unfair to someone who is quite content to look at a case where there may still be a very serious dispute.

Simon Walker: I understand. There are many tragic cases, an awful lot of which I came up against, but I do not think that one should set up an open-ended mechanism. I just do not think that it is practical to set up an open-ended mechanism that re-weighs issues that have been considered. I do not know your constituency case. I completely understand—it may be in that category, but my suggestion is that there should be an arrangement for cases that have had no adjudication, of which there are a number. Otherwise, it gets very difficult to delve into matters that go back beyond a decade. I am not quite clear and do not know the situation, but if your constituency case is from 2016, it is still within the current jurisdiction of the FOS, because it is within a three-year timescale.

Treasury Committee

 Oral evidence: Independent Review of the Financial

Ombudsman Service, HC 1400

Tuesday 22 January 2019

Ordered by the House of Commons to be published on 22 January 2019.

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Members present: Nicky Morgan (Chair); Rushanara Ali; Colin Clark; Mr Simon

Clarke; Charlie Elphicke; Stewart Hosie; John Mann; Catherine McKinnell.

Questions 155 – 241


I: Caroline Wayman, Chief Ombudsman and Chief Executive Officer, Financial

Ombudsman Service, and Sir Nicholas Montagu KCB, Chairman, Financial

Ombudsman Service.

Written evidence from witnesses:

– Financial Ombudsman Service

Q203      Stewart Hosie: Just to follow on, a specialist team of 20 people, many of whom are not yet recruited, will deal with potentially 200,000-plus eligible SMEs in nine weeks’ time, out of a headcount that is moving to 4,500. It does not exactly feel like you are throwing the artillery at what could be a potential problem.

               Caroline Wayman: As I tried to explain, we are planning on the basis of the upper limit of the FCA’s forecasted new case volumes. We are assuming as well, I should say, that the cases will be inherently more complex. I expect we will have the vast majority, if not all, of the 20 case handlers we are planning to recruit in place in advance of 1 April, but we will not get any cases on 1 April because, while we can deal with complaints about issues that arise after 1 April, people would need to address their complaint in the first instance to the financial business. The financial business has eight weeks to respond, and then people need to come to us. In substance, we will not see cases until it is somewhat warmer outside.


Q204      Stewart Hosie: Potentially, but I know, you know and people watching know that you can reopen old cases in light of new information. You have done this in the past. To take the Clydesdale Bank/NAB TBL cases as an example, your own FOI 3273 said there were 404 cases of specific fixed interest rate complaints dealt with by the FOS. Only 13%—that is 53— were upheld. Now this is in place and SMEs can come to you, it is not beyond the realms of possibility that people will be knocking on your door, saying, “By the way, this was not considered properly. Here is some new information.” Your 20 people are going to be swamped, even with your eight-week window for people to go to the financial company first. How is this number of people going to deal with those sorts of cases reopening in light of new information before new stuff hits their desks?


               Caroline Wayman: It is important to recognise that we already have people in place who deal with our existing microenterprise jurisdiction. We get about 4,000 microenterprise cases every year. The 20 and 1,300 numbers are about the new jurisdiction. Presently, we do not necessarily anticipate that we will see people coming back, but if that were to happen we would need to respond to it. Most likely, we would not necessarily ask our new team to deal with that, because we want to make sure we are setting up the new jurisdiction in the right way, ready to respond. We have existing teams that would respond to that.


Q205       Stewart Hosie: The reason I conflated those two issues was that many of the companies that come into the Clydesdale Bank TBL-type space are not microbusinesses. They will see your new team as precisely where they should be. That is why I mentioned them in specific regard to this team of 20 people. It seems rather low out of a total headcount approaching 4,500.


               Caroline Wayman: It is a relatively straightforward calculation based on the forecast of new cases. For those loans and issues that have happened in the past, if they are not eligible today as microbusinesses, they will not be eligible in the new jurisdiction, because it is about events that happen after 1 April. Often there is a debate and discussion to be had about what the event was, but typically, in the disputes you are referencing, that would be the original lending or original sale, which would have happened way before 1 April. It is one of the challenges. It is not something that this new jurisdiction is able to solve, but the question about the past is something that Simon Walker has wrestled with. In our new jurisdiction, it is important to emphasise, we will not be able to assist people who have had an issue that happened before 1 April.


Q206 Stewart Hosie: Let us wait and see how the SME community responds to that.