Wider implications’ cases are described as those where there is a widespread issue or issues which could give rise to significant consumer detriment.
Where a potential ‘wider implications’ case is identified, the FSA can consider whether a regulatory solution would be preferable to the Ombudsman service deciding individual cases.
The FSA could take supervisory or enforcement action or offer an interpretation of existing rules.
Clive Briault, managing director - retail markets at the FSA, said: “The new arrangements clarify the different roles and responsibilities of the FSA and the Ombudsman service when ‘wider implications’ issues arise.”
Under the new procedures the FSA and the Ombudsman service have nominated individuals within both organisations who will act as contact points for ‘wider implications’ cases and be responsible for communication, liaison and co-ordination.
They will be available to receive recommendations from firms, trade and consumer bodies, and liaise between the FSA and the Ombudsman service to ensure the referral process and any feedback is administered efficiently.
Chris Cummings, director of the Association of Mortgage Intermediaries (AMI), said: “Although firms may value having an external complaints procedure in place, you have to consider the legal costs. Firms have a better track record with the FOS where 74 per cent of cases go in favour of the intermediary.”
Cummings added: “The good thing about the changes is that if the FSA says it’s OK for a firm to behave in a certain way, the FOS cannot go against it. This provides a lot more certainty than we’ve had in the past.”
Bill Warren, director of The Complete Network, advised broker to make sure they understood the new rules before they came up against possible complaints. He also said the fact there was no appeals process worked against smaller firms.
