The FCA and the Financial Ombudsman Service Call for Input- Modernising the Redress System

Summary

• Which? welcomes the opportunity to respond to this Call for Input (CFI) and the FCA and FOS’ attempts to modernise the system of redress for UK financial services. An effective and accessible system of redress is essential to ensuring that financial services markets support good customer outcomes, by helping to deter poor practices and to help individual consumers on the occasions when something may have gone wrong. As a successful statutory alternative dispute resolution scheme, the Financial Ombudsman Service provides a vital option for consumers to avoid the likely expense and difficulty associated with trying to enforce their rights through the courts 
• The main objective of this consultation is focused on addressing challenges with so called mass redress events. However we note with some concern that despite that being the core focus and that the CFI clearly states the current framework works well for individual complaints, it goes on to suggest sweeping reforms to that very system. In particular the two-stage process, the ‘fair and reasonable’ assessment and a review of current time limits. This seems both contradictory and disingenuous. Given the publicly stated view that the current framework is working well we do not believe that there is any justification for such reforms. 
• Where we do see the need for change is in how the current regime and legislative options are executed, and some opportunity for better coordination between the FOS and the FCA and data use as set out below.