Chris Cummings, director-general at AIFA, argued Complaint Management Companies (CMCs) were handing over complaints to the FOS without due consideration of the information provided by the firms being investigated. He stressed the need for this to change quickly. “It is essential this activity is curbed to prevent the FOS forecasts being grossly underestimated and costs, which have to be met by the industry, escalating further. This is a matter of considerable concern to AIFA members and we are actively supporting the introduction of regulation for CMCs.”
He added that AIFA would be lending its backing to an FOS review into how organisation funding is raised, in addition to consulting members on an alternative model to fund the FOS. Cummings added: “We have raised concerns on numerous occasions about the impact of case fees on firms, especially where the complaints are repeatedly rejected by FOS. The distribution of cost between general levies and case fees needs to be reconsidered. A small business can incur costs running to thousands of pounds, proving its innocence.”
Alan Lakey, senior partner at Highclere Financial Services, agreed with Cummings’ argument that FOS funding had to be reviewed. “There needs to be a review of funding, as at the moment, the innocent are subsidising the guilty. It is a major concern, and at the moment some firms chuck every complaint case they get to the Ombudsman, which is not the way to go about it.”
