Alan Lakey, senior partner at Highclere Financial Services, admitted his surprise that the FOS had apparently contradicted English law with its statements at the ‘Working Together’ conference in December.
He said: “I was curious as to why the FOS ignored the 15-year limitation provision within English Law. In effect this law stops somebody from complaining if 15 years have passed since the event in question. However, at the meeting the FOS stated the FSA rules took precedence. This means the FOS views the internal set of rules issued by the FSA over English Law.”
Lakey believes this is not the first time the FSA has changed or ignored English Law. He added: “Until June 2004 the FSA and FOS accepted that endowment complaints, made three years after the consumer became aware of potential negligence, were time-barred. They then changed their rules so this period was extended by a further six months. FOS and FSA also believe until a consumer has received a ‘red’ re-projection letter the three-and-a-half-year clock doesn’t start ticking. Interestingly, David Kenmir of the FSA appeared to accept that, the FSA mortgage brochure it was mandatory for providers to send with re-projection letters from 1999, was sufficient notice for the time bar clock to start ticking. If this viewpoint is correct it means every endowment became time-barred in 2003.”
Emma Parker, press officer at the FOS, said: “The 15 years gives extra time for the consumer. With regards to the time barring we have recently updated our guidance so brokers can find out exactly what to do.”
She added that, as of June 2004, the FSA told firms they must provide customers with a clear date for making a complaint, after which time the complaint becomes time barred.
