Policy submission
HM Treasury’s consultation on a Review of the Financial Ombudsman Service - Which? response
Which?'s response to HM Treasury’s consultation on a Review of the Financial Ombudsman Service
2 min read
- We support HM Treasury’s stated goal to preserve the FOS’s intended purpose but believe that this goal is undermined by some of these proposed reforms. As a successful statutory alternative dispute resolution (ADR) scheme, the Financial Ombudsman Service provides a vital option for consumers to access simple, timely and impartial dispute resolution.
- We are not convinced that the evidence presented sufficiently justifies some of the structural and legislative reforms proposed in this reform package. The FOS is working well in the majority of cases.
- Some of the proposed structural and legal changes would detrimentally affect consumers' access to simple, fair, impartial dispute resolution and see a reduction in consumer access to redress in the financial sector. In particular, we have significant concerns about:
- The proposed amendments to the application of the fair and reasonable test.
- Introducing an absolute time limit on complaints being brought to the FOS.
- Making the FOS a subsidiary of the FCA.
- Allowing the FCA to direct the FOS to determine cases in line with existing FCA guidance, firm redress schemes or s404 schemes.
- Removing the consumer protections that form part of the FOS’s ability to dismiss a case directly.
- The existing redress framework also already enables the aim of several proposed legislative changes.
- We believe the reform should focus on:
- Improving the execution of the current regime and legislative options.
- Developing greater collaboration between the FCA and the FOS in new areas.
- Increasing the public transparency of the collaboration currently taking place between the FOS and the FCA.
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