Treasury Select Committee Chairman Nicky Morgan said that the Financial Ombudsman Service, British Consumer’s final defence against unscrupulous financial products and sales tactics, must present evidence else it is guilty of mishandling PPI complaints in favour of banks.
A Channel 4 undercover journalist team showed that FOS employees giving into stress and huge workloads did not initiate proper detailed investigations, which led to poor decisions for mis-sold PPI claims.
The Ombudsman’s decision on lender and borrower dealings is final and cannot be reversed.
According to Morgan’s letter to FOS Chief Ombudsman Caroline Wayman, the FOS needs to reopen cases “it feels were not decided correctly.” She also asked Wayman for the number of people affected by the improper case handling.
Employees from the FOS said they did not pore over every detail as they should because of the huge number of pending claims they need to address. Most employees fear missing out on pay rises and promotion opportunities because of immense backlogs, leaving them to make half-detailed decisions on their investigations.
The FOS itself said in a statement that the programme can always be improved and a review by the non-executive board to clarify the concerns raised is encouraged.
The Ombudsman receives about 4,000 complaints on a weekly basis. In the past, it had upheld 7 out of 10 complaints in the favour of consumers.