Financial Ombudsman Service: Standards

(asked on 12th January 2023) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment his Department has made of the adequacy of the Financial Ombudsman Service’s complaints procedure.


Answered by
Andrew Griffith Portrait
Andrew Griffith
Minister of State (Department for Science, Innovation and Technology)
This question was answered on 17th January 2023

As an independent body the Financial Ombudsman Service’s (FOS) is governed by the framework of duties set out in legislation by Parliament. It must act impartially within this framework and does not represent any vested interests. The FOS is neither a consumer champion nor an industry trade-body. An Independent Review in 2021, found that the FOS is widely respected and viewed as reaching fair and impartial outcomes in the majority of cases. The Government believes it is vitally important that the FOS should be accountable for its performance and the quality of its work and will continue to hold it to account.

In regards to the adequacy of the FOS’ complaints procedure, the Independent Review identified some key areas for change, including the need to improve digital capability and reduce case backlogs and made 22 recommendations to the FOS. In response, the FOS published its ‘Action Plan’ in 2021. The FOS publishes regular updates against this Action Plan which provides regular opportunities for scrutiny. In their latest update, published in May 2022, the FOS showed significant success in reducing its backlog of cases from 90,000 to just over 37,000. Reducing waiting times is a priority for the FOS in the next financial year.

The Independent Assessor is appointed by the FOS Board and provides an important opportunity for consumers to bring complaints about the FOS’ conduct or capability. The Independent Assessor is required to take an impartial approach and can make recommendations to the FOS about operational issues such as communication and timeliness. The Independent Assessor also provides important scrutiny of the FOS through their annual report which makes broader recommendations for the FOS about how it can improve its service: https://www.financial-ombudsman.org.uk/files/324005/Financial-Ombudsman-Service-The-Independent-Assessors-annual-report-2021-22.pdf

In the 2021/22 financial year the FOS received 165,263 complaints and resolved 218,740. Further details can be found in the Plans and Budget 2022-23 consultation: https://www.financial-ombudsman.org.uk/files/320493/plans-and-budget-consultation-2022-23.pdf

In the 2021/22 financial year the FOS received a total of 4,131 service complaints and 568 of these were escalated and investigated by the Independent Assessor. Of those, the FOS’ approach was found to be satisfactory in 35% of case, unsatisfactory in 20% of cases and unsatisfactory with recommendations and/or learning points in 45% of cases. Further details can be found in the Independent Assessor’s annual report : https://www.financial-ombudsman.org.uk/files/324005/Financial-Ombudsman-Service-The-Independent-Assessors-annual-report-2021-22.pdf.

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