Ombudsman, not courts, should have last word in settling financial disputes
In its response to this aspect of the Financial Services and Markets Act review, NCC argues that to allow appeals would undermine a system that works really well for people. It would shake consumer confidence in the FOS and weaken consumer protection.
Explaining NCC’s strong stand, NCC director of policy, Jill Johnstone, said: ‘There has to be some authority to make a final decision on disputed cases, and the ombudsman – who is independent and accountable through Parliament – is the proper authority to do so.
‘Ombudsman schemes provide speedy and free access to redress for people when things go wrong. And in the case of financial products and services - which are especially complex - the existence of an ombudsman also gives important protection against firms exploiting gaps in customer knowledge.
‘To introduce a right of appeal for financial disputes would make using the complaints process more longwinded, expensive and stressful – something we know puts people off complaining in the first place. As it is, for the sorts of cases likely to go to appeal, the consumer would have already been through a protracted multi-staged process.
‘It would also set a dangerous precedent – with possible knock on effects across other UK private sector ombudsman schemes where decisions are also binding on firms with no right of appeal.’
NCC’s response points out that, generally, one in every five consumer problems with a legal remedy doesn’t get pursued, mainly because of concerns about the time and hassle involved. It also questions the industry’s support for an appeals process when the FOS’ own satisfaction survey show that seven in ten firms rate FOS decisions as generally fair – against six in ten consumers who rate the decisions as reasonable. Two-thirds of FOS decisions are in favour of firms anyway.
Jill Johnstone added: ‘An appeals process goes against the spirit of the Financial Services and Markets Act which requires the FOS to resolve disputes with minimum formality. What’s more, the courts are inappropriate for reviewing ombudsman decisions – which are based on what is fair and reasonable.’
