The Financial Ombudsman Service (FOS) will remain free

It is brilliant news for consumers that Lord Hunt’s review has recommended that the Financial Ombudsman Service FOS remains free to consumers. Charges would discourage people from using the FOS, especially those in financial hardship.

Lord Hunt’s principal recommendations are as follows:

• FOS should make a significant, and properly targeted and evaluated, increase in investment in communication.
• The FOS should commission a more “user-friendly”, readily understood and enticing trading or brand name (or names) to convey its activities to the public more effectively, whilst also clearly retaining its role and legal identity as an ombudsman service. The “Financial Complaints Service” may be an appropriate starting point.
  The FOS should provide a phone line service between 8am and 8pm on weekdays and on Saturday mornings; ensure that out-of-hours callers can leave their details by means of voicemail or text, requesting a call back; and offer a freephone service, at least for initial enquiries and complaints.
• The FOS should develop and pilot a “case adviser” system, to ensure that vulnerable consumers feel confident about using the FOS dispute resolution service.
• The FOS should identify how best to “fast track” complaints on consumer credit, which, although of relatively low value, are often of pressing urgency to complainants; take every opportunity to remind firms that the first expression of dissatisfaction by a customer marks the start of the initial 8-week complaint period; and press regulators to shorten the 8-week deadline for companies to resolve simpler debt- and credit-linked complaints
• The FOS should develop regular, independently-edited selections of anonymised case reports and a new interactive “FOSBOOK” system, to provide comprehensive data on its approach to families of cases and to facilitate regular, informal two-way feedback.
• As a first step, the FOS should publish more in the way of anonymised, benchmarked data, alongside a new award scheme to identify and reward best practice, matched by a “wooden spoon” for the worst performers. It should also work with the FSA to ensure that more robust, company-specific data is made available for complaints handling within all parts of the system.
• There should be no case fees chargeable to complainants.
• There is no need for an external appeals process.
• The recent reconstitution of the FOS Board presents an excellent opportunity to reinvigorate and extend the role it plays. I sincerely hope the FOS takes full advantage of the talent it has at its disposal.

He believes these recommendations, in combination with all the others in his Report, will bring about a true openness revolution at the Financial Ombudsman Service, to the considerable benefit of everyone within it, and also everyone who has occasion to deal with it. The FOS has a great opportunity to build upon its already considerable achievements, building an even better model for the future.