A number of recommendations have been put forward following a review of the Financial Ombudsman Service, which was recently completed by Lord Hunt of Wirral. The six month review resulted in a report highlighting over seventy recommendations that Lord Hunt put forward. This included changing the name of the service to a friendlier one, and also focussing more on helping those on low incomes and the more vulnerable.
In his report Lord Hunt stated: ‘If my conclusions are accepted and my recommendations implemented, I believe the demographic profile of those using the FOS should, must and will broaden, as the organisation thinks not only in terms of its traditional areas of activity – dealing with matters such as mortgages, insurance and pensions products – but also in terms of the problems that typically afflict our less affluent citizens.’
He went on to state: ‘Difficulties with debt management are only likely to increase in scale and numbers as the current economic difficulties mount. In many instances the sums of money involved will be on the low side by FOS standards, but the human misery attendant upon them can be devastating. Accessibility is no abstract concept.’
The recommendations have been largely welcomed by various industry officials, including officials from the consumer group, Which?, who said: ‘It is great news that the review has agreed that FOS should remain free to consumers. Introducing charges would inevitably discourage some people from using the service, particularly those in financial hardship. We also agree that a time-consuming and expensive appeals process would only mimic the courts - it’s very important that the service remains a quick form of consumer redress. FOS is the unsung hero of UK financial services regulation and helps to maintain consumer confidence in the industry.’
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