The Investment and Life Assurance Group (ILAG) has warned that increased publishing of decisions made by the Financial Ombudsman Service (FOS) could be a boon for claims management companies (CMCs).
It also suggested FOS would face increased scrutiny about its decisions and that companies may feel pressurised to accept adjudicators' rulings to avoid publication if an ombudsman was asked to rule.
In a submission to the FOS consultation on publishing more decisions, the trade body said it generally supported the publication of FOS rulings but had some concerns around how this would be achieved, how this information may be misused, and the consequences of misuse.
The letter noted that FOS will need to aim for higher level of consistency and quality of decision making while there was potential for the data to be abused.
"We assume that FOS is happy for its decisions to be made public and that its decisions will therefore come under even greater scrutiny than hitherto in terms of allegations of inconsistency, lack of fairness, speed of handling etc," it continued.
"The potential threat posed by CMCs (mis)using this information seems to have been dismissed by FOS without serious consideration.
"We wonder whether FOS should seek the views of the CMC regulatory body and others," it added.
It accepted that as a result of greater transparency insurers would have a better understanding of the Ombudsman, but feared that more publications could lead to an "increased vulnerability to CMCs, bad publicity - warranted and unwarranted - and tactical settlements of non-meritorious complaints".
"If FOS proposals are implemented an unintended consequence might be that companies may feel pressurised to accept adjudicators' decisions with which they do not agree rather than risk a damaging Ombudsman decision.
"We note FOS' comment that 80% of adjudicators' decisions are accepted and that of those which are not, some are ‘judgement calls' and others come about because new facts arise; does FOS wish to increase the figure to 90% or even more?"
The ILAG submission also suggested FOS over estimated the value of the information to consumers and that publishing around 300 to 400 decisions each week would be too much for consumers to read and obtain value from.
And the representative group questioned how and when publishing the names of those businesses involved in the claims would be decided.
"If consumer research reveals that Ombudsman decisions need to be disclosed, we would be in favour of this being in full but with both parties involved in the case remaining anonymous," it added.
"Perhaps firms should only be named if complaints against them reach a certain value or volume threshold.
"The threshold might need to be related to the size of the firm as larger firms will receive more complaints than smaller ones.
"We believe that if FOS gave more publicity to the most important decisions it would be of greater benefit to consumers than if all were published," it concluded.
