As a survey on the Financial Ombudsman revealed almost three-quarters of advisers see themselves as the victim of false accusations for compensation, how far is the industry from restoring confidence in the ombudsman system?
"Generally, these time limits are, six months from the business sending the consumer a final response (which has to mention the six-month time limit); and six years from the event the consumer is complaining about (or - if later - three years from when the consumer knew, or could reasonably have known, they had cause to complain)."
Alan Lakey, partner at Highclere Financial Services said: "The FOS process differs markedly from that of a court where innocent until proven guilty is the approach. The FOS uses ‘the balance of probability' which is a much lower threshold and enables the adjudicator/ombudsman to reach a conclusion without the requirement for overwhelming evidence.
"Add to this the fact that the FOS has an inquisitorial remit and you can see why justice and fairness is a more malleable and elastic concept.
"The impact of FOS decisions is often to re-write the terms and conditions of plans. One example is their refusal to accept the industry norm of a qualifying period for a critical illness plan. They also dislike the use of level term plans to protect reducing mortgage balances.
"In making these decisions and effectively setting precedents they are effectively a second regulator. Like the FCA there is no realistic mechanism to appeal against an ombudsman's decision, no matter how partial or foolish."
In a statement accompanying the survey Bradley concluded: "Confidence in a fair and unbiased Ombudsman service is the right of all who use or engage with it however, judging by the results of the survey and many advisers' expressed concerns, we are a long way from achieving this."
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What's happening with protection and health complaints? Whole of Life policies were the 8th largest area for enquiries, with 688 received by FOS, with 102 cases sent to the Ombudsman for a final decision. Term assurance enquiries were down to 804 from 953 however there was a 5% increase in the number of cases being upheld to 23%. The proportion of critical illness complaints upheld by the Financial Ombudsman Service rose by 1% to 25% in the July-September 2014 quarter. The numbers of enquiries and new cases rose about critical illness cover rose, although the number sent to the Ombudsman for a final decision fell. For cases upheld in income protection the increase was 4% to an upheld rate of 38%, the number of enquiries to FOS have fallen. Complaints upheld about whole of life policies remained at 23% of complaints, but with an increase in the number of new cases the ombudsman was dealing with. Protection remains a small part of the work FOS does, with 157,000 enquiries handled during the July-September quarter, 88,038 new cases and 12,125 complaints appealed to an ombudsman, the final stage. Quarterly statistics from the Financial Ombudsman Service (FOS) has revealed a 10% drop in upheld complaints in private medical insurance (PMI) and dental insurance. However, a spokesperson for FOS said: "To get an idea of the bigger picture for medical and dental insurance complaints is to look at the figures on a year on year basis. This provides more context as there are a larger number of complaints used to calculate the uphold rate on. "In FY2012/13 the uphold rate was 38%, in FY 2013/14 it was 40% and in the six months of this year the rate is currently 37% so despite the fluctuations between Q1 & Q2 this year, the figure is actually remains pretty consistent." |
