The warning comes after it materialises there is still confusion among brokers about transitional complaints. FOS has taken the step to clarify that it can only look at transitional complaints where the firm is directly authorised by the FSA. Those made against firms who are now ARs will not be considered and the client will have to seek other legal channels.
Nigel Skinner, broker at NPS Resolution, contacted Mortgage Introducer saying he had submitted a complaint for a client concerning bad advice given by a firm two years ago but was surprised when the Ombudsman refused to consider it because the firm in question is now an AR of Legal & General.
He said: “I have challenged the decision but the Ombudsman is adamant it cannot investigate. This is despite the firm in question stating in its final response that the matter can be referred to the Ombudsman if not satisfied. Complainants have no access to redress other than the courts. I am absolutely gobsmacked.”
He added: “Clearly this is a situation that can be ruthlessly exploited by some brokers; by becoming an AR they can effectively avoid any complaints via the Ombudsman.”
Emma Parker, spokesperson at the FOS, said: “The Treasury consulted on transitional complaints relating to mortgage brokers in 2004. It was made clear that we would not be looking at complaints where the firm would become an AR post-‘Mortgage Day’. We are not able to take on the firm as an individual either.”
Stephen Atkins, group compliance director at Freedom Finance, said brokers’ unawareness of this issue is not surprising. “This matter seems to have been brushed under the carpet during the build-up to regulation as other issues took the forefront, namely compliance and all the other FSA rules brokers had to get to grips with.”
