Response to: Publishing Ombudsman decisions Transparency and the Financial Ombudsman Service

Transcription

1 Eiko Heffer Financial Ombudsman Service South Quay Plaza 183 Marsh Wall London E14 9SR 9 December 2011 Dear Eiko, Response to: Publishing Ombudsman decisions Transparency and the Financial Ombudsman Service ILAG is a trade body representing members from the Life Assurance and Wealth Management Industries. ILAG members share and develop their practical experiences and expertise, applying this practitioner knowledge to the development of their businesses, both individually and collectively, for the benefit of members and their customers. A list of ILAG members is at the end of this submission. Generally, ILAG supports the publication of FOS decisions. However, we have concerns about: how this is achieved how this information may be misused, The consequences of misuse We note, too, that the Financial Services Bill will only require FOS to publish determinations if it considers it appropriate to do so. As this consultation has been issued following a Government review of all Ombudsmen services, we would be interested to know how FOS proposals compare with the proposals and experience of other ombudsman schemes. Our responses to the specific consultation questions are attached and we would be happy to discuss our response in more detail. Yours sincerely Mark Searle Administration Team

2 Response to specific Consultation questions Question 1 - Do you agree with our overall approach? Are there other considerations we should bear in mind, in approaching the publication of our ombudsmen s final decisions? We agree in general, but there are a number of issues which FOS has not considered, discussed in our response to Question 6 below. It is likely that there will be such a high volume of data published that it will be difficult for it to be viewed objectively. There is also a danger that reporting in media might be selective and based on stories initiated by CMCs. Question 2 - Do you agree that we should not publish the views of adjudicators instead limiting the publication of decisions to those made by our ombudsmen? Yes, otherwise the information would be unwieldy. Question 3 - Do you agree that our published reports on cases should not normally be specially commissioned summaries, but the actual determination made by the ombudsman (subject to the appropriate safeguards)? We consider that FOS over estimates the value of this information to consumers. With around 300/400 published decisions each week we believe this would be too much for consumers to read and obtain value from. We support FOS proposal to conduct consumer research to establish more clearly what information consumers require. Such research should focus on whether information should be disclosed and how it should be disclosed in the context of what FOS already publishes. A significant amount information is already available from FOS, including Ombudsman News and the FOS Annual Review and publication of complaints data. We believe this level of information is adequate and a publication of the outcome of each decision would provide only marginal incremental value. If consumer research reveals that Ombudsman decisions need to be disclosed, we would be in favour of this being in full but with both parties involved in the case remaining anonymous. It is very difficult to assess the implications for firms (especially smaller firms) of the impact of disclosing the name of the firm that is defending the complaint. Damage caused would be almost impossible to reverse. There will presumably also be decisions where a firm intends to pursue the matter through the Courts and in such circumstances any public disclosure of the Ombudsman decision might prejudice the outcome. We note too that FOS intends to engage with regulated firms regarding its proposals and we would welcome the opportunity to discuss this further.

3 Question 4 - Overall do you think our proposed approach strikes the right balances between transparency, protecting genuinely confidential information and the costs of implementation? Yes. Question 5 - Do you think the steps we propose are sufficient to protect consumer identities and personal information or are there other specific steps we should take? Yes. Question 6 - Do you agree that we should not seek to protect the identity of financial businesses? If you disagree, what other steps would you want us to take? We would be interested in any evidence FOS has for claiming that CMCs will not use disclosed Ombudsman adjudications for their own commercial purposes. For example organisations which cold call trying to drum up whiplash claims arising from long-settled car accident cases, and PPI complaints from consumers whom they have no reason to suppose have ever effected loans, are not likely to have scruples about misusing the publication of Ombudsman decisions. We wonder if FOS is concerned about the increase in the proportion of complaints being referred to Ombudsmen, (as commented on in the consultation). If FOS proposals are implemented an unintended consequence might be that companies may feel pressurised to accept adjudicators decisions with which they do not agree rather than risk a damaging Ombudsman decision. We note FOS' comment that 80% of adjudicators decisions are accepted and that of those which are not, some are judgement calls and others come about because new facts arise; does FOS wish to increase the figure to 90% or even more? Naming the financial company, but not the complainant, is clearly one-sided. Although we would not suggest naming the complainant, naming the firm might lead to more settlements of undeserving cases to avoid appearing too often in the FOS stats. Perhaps firms should only be named if complaints against them reach a certain value or volume threshold. The threshold might need to be related to the size of the firm as larger firms will receive more complaints than smaller ones. However, as FSA already lists complaints by company there seems little point in FOS doing so as well. We support FOS continuing its previous practice of occasionally publishing anonymised full decisions, which raise issues of wider significance, systemic issues and matters of fundamental significance. We believe that if FOS gave more publicity to the most important decisions it would be of greater benefit to consumers than if all were published. Question 7 - Do you agree with our planned approach to the identities of third parties including other financial businesses, professionals, other representatives and thirdparty businesses? No, please see comments under our response to questions 3 and 6

4 Question 8 - Do you agree that we should reserve the right not to publish certain decisions or to exempt information in other exceptional circumstances? Yes, but to be fair to firms whose decisions are published, such cases should be few and far between and individually justified. Question 9 - Are there other considerations about safeguarding personal information that are not covered in this paper and that we need to take into account? No. Question 10 - What impacts do you believe publication of decisions as we propose will have on consumers, financial businesses and on our service? Please see comments in 6 above. We do not believe that consumers will have much interest unless prompted by sensationalist reporting. There will be an effect on: FOS: will need to aim for higher level of consistency and quality of decision making. Insurers: will have better understanding of FOS. Increased vulnerability to CMCs, bad publicity warranted and unwarranted, tactical settlements of unmeritorious complaints CMCs: we recognise that CMCs can provide a valuable service for some clients in some circumstances but nevertheless publication of data as proposed will provide a goldmine of information on themes, and individual companies for some CMCs to generate more complaints. Journalists: Probably too much info for a journalist to research properly. May rely on knee-jerk analysis or selective research of CMCs. Customers: No direct effect. Would only pick up info through CMCs or news media. We assume that FOS is happy for its decisions to be made public and that its decisions will therefore come under even greater scrutiny than hitherto in terms of allegations of inconsistency, lack of fairness, speed of handling etc. The potential threat posed by claims management companies (mis)using this information seems to have been dismissed by FOS without serious consideration. We wonder whether FOS should seek the views of the CMC regulatory body and others. Question 11 - Do you agree with our approach to the timing of publication? If not, when should decisions be published and why? If the data is to be published, the proposed timetable seems reasonable. If FOS decisions are to be published at all, publication should be timely and only when FOS is sure that the parties do not intend to take further action.

5 Question 12 - Do you agree with our approach to the form of publication? Yes. We agree that website publication is the best medium. Question 13 - Do you have any comments on when we should start publication of decisions and what are your views on past decisions? No. We have no particular view on when publication should start. We do not believe that publication of past decisions would be a good use of FOS time or money. Question 14 - Do you agree that we should adopt the same approach across all of our jurisdictions and specifically do you agree we should cover our voluntary jurisdiction in the same way as our compulsory (FSA/FCA) jurisdiction and our consumer-credit jurisdiction? We are not sure why the voluntary jurisdiction should be included. Why would a firm wish to submit to a voluntary jurisdiction if it could result in adverse publicity? Ends

6 ILAG Membership AXA Wealth Barclays Wealth Barnett Waddingham Bupa Health Assurance Canada Life Limited Capita Life and Pensions Services Co-operative Financial Services Defaqto Deloitte LLP Ecclesiastical Insurance Group Ernst & Young Family Investments Fil Life Insurance Limited Friends Life General Reinsurance (London Branch) Hannover Life Re (UK) Ltd HSBC Bank Plc Just Retirement Limited HCL Insurance BPO Services Limited KPMG Logica London & Colonial Assurance PLC LV= Milliman Met Life UK Metropolitan Police Friendly Society Ltd MGM Advantage Mazars Oxford Actuaries and Consultants plc Pacific Life Re Partnership Assurance Phoenix Group Pinsent Masons PricewaterhouseCoopers Reliance Mutual RGA Royal London Group Sanlam Life & Pensions SCOR Global UK Limited. Skandia UK Suffolk Life Sun Life Assurance Company of Canada Swiss Re Europe SA (UK Branch) The Children s Mutual Towers Watson Vertex Wesleyan Assurance Society Zurich Associate Members AKG Actuaries and Consultants Ltd Steve Dixon Consultants and Actuaries McCurrach Financial Services Meteor Asset Management NMG Financial Services Consulting Limited State Street Investor Services