FCA and FOS joint consultation on Modernising the Redress System - Which? response

This joint consultation paper was designed to be read alongside the HM Treasury consultation on a Review of the Financial Ombudsman Service (FOS). It should be noted that we responded to HM Treasury’s consultation with the following high-level concerns:
- We support HM Treasury’s stated goal to preserve the FOS’s intended purpose but believe that this aim is undermined by some of the proposed reforms.
- We are not convinced that the evidence presented sufficiently justifies some of the structural and legislative reforms proposed in the reform package.
- Some of the proposed structural and legal changes would detrimentally affect consumers' access to simple, fair, impartial dispute resolution.
- The existing redress framework also already enables the aim of several proposed legislative changes.

In that consultation response, we also set out that we do not believe major structural or legislative change is required to substantially address concerns identified and to ensure consumers’ continued access to simple, impartial and timely dispute resolution.

We ask that our attached response to the HM Treasury consultation be read alongside this response. In addition, where we support the changes in this consultation paper, we do so providing that they are not introduced in concert with those specific proposed structural and legislative changes.

In terms of this joint consultation paper:
- Registration stage: We are supportive, in principle, of the proposal to introduce a registration phase for complaints, as long as steps are taken to ensure it does not affect consumers’ access to dispute resolution, particularly vulnerable consumers.
- Lead complaints: We have some concerns around the potential impact of a lead complaints process on a consumer’s access to timely dispute resolution, and in particular the potential for such a process to be confusing and frustrating for affected consumers. If this proposal is pursued, we need to see sufficient safeguards that ensure timely dispute resolution is not compromised.
- FSCS amendments: We are supportive of most of the changes to the FSCS but do have some questions about the proposed drafting of the changes to the payment of compensation and calculating compensation. We would need clarity on these questions before considering whether we support the changes.

pdf (207 KB)

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