Financial Ombudsman Service action plan: consumer complaint handling
What has happened?
The Financial Ombudsman Service (FOS) plays a significant role in the UK’s financial system; since it was established in 2001, it has helped individual consumers and smaller businesses to resolve over four million complaints. Brought together by the merger of eight separate schemes, the single Financial Ombudsman Service is intended to be a one-stop service for consumer complaints, providing a unified system of consumer complaint handling, to help reduce possible confusion or duplication and with the ability to view and respond to trends across the industry sectors.
Even so, the FOS has received much criticism in recent years and it remains not especially user-friendly for firms subject to consumer complaints.
A recent review by management consultants Oaklin Consulting identified problems with the FOS’ structure and technology and its communication with the public, other regulators, and industry bodies. Oaklin found that 13,000 cases resting with the FOS were between one and two years old, 3,100 were between two and three years old and there were over 1,800 cases where complainants had been waiting more than three years. It is, on average, five months before a case is allocated to a FOS Investigator.
The consultants also stated that the FOS needed to shake up its structure as far too many investigators were leaving after completing their training; in some operational areas, attrition levels were around 40 per cent.
In addition, it was suggested that the FOS should set up an online portal to enable complainants to submit complaints online rather than having to call or email the ombudsman.
As complaints are becoming more varied, with a boom in online crime, Oaklin further suggested that investigators should be trained in specialist areas rather than as generalists.
In December 2021, the FOS published an action plan approved by the Board to change and improve the organisation to provide the best service for its customers. The plan will see the FOS move to a simpler, more accountable casework operating model to improve its consumer complaint handling from entry point to resolution. In particular, it has undertaken to focus on consolidating existing teams into a clearer structure based on industry-specific areas and on allowing casework leaders to set targets, manage budgets and set their teams' priorities.
It also intends to improve its triaging processes and develop a digital portal to make it easier for complainants to interact with the FOS. It will also use "intelligent automation" to speed up the process, for example by using technology to convert digitally submitted complaints directly into case files.
Although the FOS is listening to and acting on the criticisms made, firms’ interactions with the FOS are likely to remain challenging for the foreseeable future.
How can we help you with consumer complaint handling?
We can advise firms on their consumer complaint handling and FOS arrangements and can advise on the best way to deal with FOS investigators, which may well change in future to reflect the changes brought about by the action plan.
If you’d like to know more about how we can help you with these issues, or with any other regulatory compliance issues, our expert team is here to help.
Contact us today on 0207 436 0630 or email info@thistleinitiatives.co.uk.