Financial Ombudsman ‘must sharpen up’ amid rising cases

Business

The Financial Ombudsman Service (FOS) needs to “sharpen up”, according to MPs, owing to concerns over a backlog of cases.

The organisation adjudicates on disputes between financial services companies and their customers.

Mel Stride, who chairs the Treasury Committee, said the service could not hide behind Covid as a reason for thousands of unresolved cases.

But the chief ombudsman hit back, saying staff had responded well.

Covid impact
The workload of the FOS has risen as a result of pressures on financial businesses and consumers.

It told the Treasury Committee in November that 38,000 cases had not been allocated to a handler, at least eight weeks after receiving the complaint.

Some 56,000 cases remained unresolved after more than six months, and 23,000 were still open after more than two years.

The cost of resolving each complaint – which is paid for by the financial sector, as the service is free for consumers – has risen from £713 two years ago to £960 now.

Mr Stride said that Covid had put a strain on the service, with staff having to work from home and other organisational factors, but he said that many businesses faced the same kind of pressures and were dealing with them.

“It cannot hide behind those kind of issues,” he told BBC Radio 4’s Today programme. “This is an organisation that needs to sharpen up.”

He argued that this could start by hiring more specialist staff.

Industry must ‘play its part’
The chief financial ombudsman, Caroline Wayman, said the the service had responded “incredibly well” to the challenges.

She said that there had been 65,000 more cases than they had anticipated, yet they had dealt with close to their pre-pandemic expectations.

Some cases had come straight into the FOS inbox because financial services companies had understandably prioritised other issues at the start of the pandemic.

She said the industry now needed to “play its part” by ensuring complaints were looked at properly and in a timely fashion.

Over time, she added, cases had become more complex than payment protection insurance (PPI) disputes, which had dominated its workload in recent years.