Transcript Slide 1

The Financial Ombudsman Service
…..its role in complaint resolution
Ian Woodman
Relationship Manager
CILA – 29 October 2007
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background …
Financial Services Authority
Financial
Services
and
Markets Act
2000
(the regulator)
Financial Ombudsman Service
(adjudicates on unresolved disputes)
Financial Services
Compensation Scheme
(pays compensation if authorised firm
is unable to pay claims against it)
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the role of the Financial Ombudsman Service
 an independent service for resolving disputes
between consumers and financial firms
 to achieve a fair and reasonable outcome at the
earliest possible opportunity
 promotes dispute avoidance
 can save time and expense of costly litigation
 increases consumer confidence
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FSA handbook
chapter 1 treating complainants fairly
(complaints-handling
rules for businesses)
chapter 2 jurisdiction of
the ombudsman
Dispute
Resolution:
Complaints
(DISP)
chapter 3 the ombudsman
complaint-handling process
chapter 4 the voluntary jurisdiction
FEES
chapter 5 funding arrangements
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complaint-handling rules
a business must:
 have effective and transparent procedures for
reasonable and prompt complaints handling
 investigate complaints impartially
 publish summary details of its complaints-handling
process eg in a leaflet or the contract docs
 summary details should explain that unresolved
complaints may be referred to the Financial
Ombudsman Service
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what businesses have to do…
complaint-handling rules …
complaint not
resolved by the
following day
prompt
written
acknowledgement
if complaint sent to wrong business, it may
forward it – promptly – to correct business &
tell complainant in a final response
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keep complainant
reasonably informed
8 week stage
final response
&/or referral rights
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a final response …
 is the business’s full response to the complaint
 it should be in writing
 it should set out its final view on the issue/the
outcome of its investigation
 give details of any offer and an explanation of how it
arrived at the offer or its reasons for rejecting the
complaint
 must include ombudsman referral rights and leaflet
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what is an ombudsman complaint?
 any expression of dissatisfaction (oral or written –
justified or not)
 involves an allegation that the complainant has
suffered, or may suffer, financial loss, material
distress or material inconvenience
(…that is not resolved by close of business on the
business day following receipt)
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ombudsman’s remit
 fair and reasonable, taking into account…
 relevant law
 regulations
 regulators’ rules, guidance and standards
 relevant codes of practice
 good industry practice
…at the relevant time
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gathering the evidence
 inquisitorial remit
 consumers might need our help
 complaint form completed by consumer
 we will get to the crux of the dispute and will ask
either side all the questions we need to
 ample opportunity for both sides to submit their
case
 we read and listen very carefully
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our process …
3 stages
1
2
3
customer contact team
adjudicators
ombudsman
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customer contact team
to firm for resolution
phone
enquiries
341,455
jurisdiction checks
total
enquiries
627,814
written
enquiries
286,359
early resolution
to casework
enquiries
converted to
cases 94,392
figures for year to 31 March 2007
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our process …
2
adjudicators
94% of
closed cases
resolved by
adjudicators
through:
• mediation
• guided conciliation
• formal adjudication
unable to
resolve 8%
of cases
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passed to an
ombudsman for
final decision
111,673
cases
resolved in
year ending
31/03/07
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adjudicating
 a formal decision might not be needed – a fresh pair
of eyes can make a difference
 can we mediate a settlement – maybe help both sides
to see things in a new light?
 experienced, fair minded adjudicators
 where a more formal approach is needed the
adjudicator will recommend a way forward – but tells
the losing side first
 ample opportunity to discuss or challenge
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adjudicating
 fair and reasonable outcome for each case
 can look beyond strict legal position – discreet use
 will use expert, independent evidence if needed
 documentation or call recordings important
 balance of probabilities where uncertainty exists
 both firm and consumer can appeal to the
ombudsman
 …although less than 10% go to the ombudsman
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3
ombudsman – final decision
will hold hearing
if necessary
(v rare)
ombudsman
considers
case afresh
cases
adjudicator
cannot
resolve
ombudsman agrees
with adjudicator
conclusions
final decision
or
return for further
investigation
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ombudsman
does not agree
issue provisional decision
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ombudsman decisions
 only necessary if parties do not accept adjudicator’s
view
 the final stage in the ombudsman service process
 based on review of papers by a single ombudsman
 no appeal to another ombudsman
 final and legally binding if complainant accepts
 complainant retains legal rights if rejects FD
 judicial review – entitled but very rare
 individual case decision but recognise desire for
consistency
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redress
 financial loss
 distress, inconvenience, injury or damage to
reputation
 costs only in exceptional circumstances
 £100,000 limit
 recommendation above £100,000 not binding
 ombudsman can instruct a firm to take
‘appropriate’ action
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briefly, what we are seeing…..
 substantial drop in disputes about the sale of
mortgage endowment policies compared to last year
 welcome reduction in critical illness & PHI complaints
 complaints about the sale of PPI increasing steadily
over last 6 months
 upward curve in motor complaints continued
 buildings and contents numbers fairly stable….so far
 no trends or spikes to report on property complaints
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general insurance complaints by product
type of complaint
2007
2006
2005
motor
4,230
3,372
2,571
building
1,951
1,951
1,624
travel
1,670
1,787
1,525
contents
1,238
1,224
1,145
891
1,103
980
1,832
1,315
833
680
799
717
other
3,238
2,719
2,089
total
15,730
14,270
11,484
income protection
loan protection
critical illness
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the value of loss adjusters
 a crucial role
 usually first on scene
 early intervention and management is critical
 communication is key
 good, detailed reports are invaluable to us
 some of the most ‘messy’ complaints could have been
avoided with the early involvement of an adjuster
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but a note of caution…
 sometimes it looks like you are just trying to cut costs
 remember ‘good faith’ works both ways
 the policyholder should be paid what they are due
 make a fair offer first time – don’t ‘haggle’
 we are looking for objectivity at all times
 detail, accuracy and evidence is crucial
 your reports carry huge weight for us
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resources available - our website
 www.financial-ombudsman.org.uk
 news
 frequently asked questions
 printable complaint form
 all our publications including case studies
 special needs information
subscribe to receive regular news and
updates by e-mail
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resources available - firms only …
technical advice desk
- informal guidance on our practice and
procedures
020 7964 1400
[email protected]
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any questions now or later?
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