UK Finance has backed calls that the Financial Ombudsman Service needs to be stopped from performing as a “quasi-regulator” and insists on a timetable of reform for the physique.
The transfer comes within the banking physique’s submission to the federal government forward of the Chancellor Rachel Reeves’ Mansion House speech later this month and the Treasury’s Financial Services Growth and Competitiveness Strategy paper.
The Treasury is at the moment reviewing the remit of the physique, which resolves disputes between monetary corporations and shoppers, in a transfer that was first introduced within the spring.
However, UK Finance says: “We have vastly welcomed the eye from the federal government on reform of the Financial Ombudsman Service, and the necessity to deal with the truth that selections that transcend FCA guidelines create authorized uncertainty and see the Ombudsman performing as a quasi-regulator.
“Providing certainty and stability on this and different conduct-related reforms will higher permit corporations to innovate within the curiosity of shoppers.”
The commerce physique says that older disputes the regulator appears to be like into needs to be time-limited and calls for a “reform timetable “of the service to be revealed.
It provides that laws to make additional reforms to the physique “ought to observe within the subsequent King’s Speech” due within the autumn.
Bawa wrote to Economic Secretary to the Treasury Emma Reynolds, and stated that the service supported a “rising complaints trade and tradition inside UK Financial companies,” of claims administration corporations, “which received’t promote confidence or assist development in our trade.”
In March, the Treasury stated Reynolds would look at whether or not the Financial Ombudsman Service “is delivering its position as a easy, neutral dispute decision service which shortly and successfully offers with complaints towards monetary companies corporations and which works in live performance with our Financial Conduct Authority, which regulates the sector”.
The Treasury says Reynolds will have a look at three key points:
The framework by which the FOS operates, which has resulted in it performing, at occasions, as a quasi-regulator
A Financial Ombudsman Service spokesperson says: “We are an unbiased dispute decision service set as much as present a substitute for the courts with minimal formality – final yr alone we offered fast and high-quality resolutions to 1000’s of shoppers, small companies and monetary corporations.
“We agree that now, after 25 years of operation, marks a well timed alternative to overview the system as a complete.
“That is why we’re working intently with the Financial Conduct Authority and the Treasury to make sure the system — together with the very important position our service performs inside it — is match for the long run.”
