In his speech Merricks questioned why FOS had to uphold some 45 per cent of mortgage endowment complaints and why they are being referred rather than being settled appropriately by firms.
In some classes of mortgage endowment complaint 80 per cent were being upheld and for other firms only 20 per cent.
He said this showed it was possible for firms to deal fairly and effectively with large volumes of mortgage endowment complaints without resorting to the FOS.
He spoke of evidence that firms were rejecting swathes of complaints with little or no investigation of the individual consumers’ circumstances, citing generic arguments that they do not accord with the approach that the FOS take.
Merricks said: “Around 20 per cent of all mortgage endowment complaints to firms are referred to us which is a far higher proportion than in other areas.
“There must be some doubt that the 80 per cent of complainants who do not refer their complaints to us have all been dealt with fairly. Are some firms just dumping the remaining complaints on us, finding our £360 case fee cheaper than the fees that outsourcing companies would charge?”
Mark Mountney, managing director of Premier Mortgage Management, said: “We always attempt to deal with complaints as quickly and efficiently as possible, this doesn’t appear to be the case with endowment cases. It is something that FOS will have to deal with.”
Tony Corrigan, managing director of Classic Network Solutions, said: “This is somewhat of a surprise but it doesn’t bode well for the future. The FOS should not be burdened with unneceessary work because at the end if the day it is all financial services firms that end up paying.”
