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FOS updates consumer guidance after High Court ruling
by Michelle Abrego on Jan 07, 2013 at 12:42
The Financial Ombudsman Services (FOS) has changed the wording on its guidance to reflect a recent High Court decision that allows consumers to pursue additional compensation through court after receiving the maximum award from the Ombudsman.
In December, Judge Ross Cranston ruled that investors Barry and Julie Clark could claim further damages from In Focus Asset Management & Tax Solutions despite the firm having paid £100,000 compensation on the FOS judgement.
The payout was the maximum the FOS could award at the time.
The pair alleged they incurred loses of £500,000 after being mis-sold endowment policy plans. Cranston’s decision overturned a ruling from 2010 that said accepting a FOS award ruled out court action over the same complaint.
In response to the latest ruling the FOS has changed its guidance to consumers.
It now says: ‘Until recently, if a consumer accepted our decision they could not then take the business to court.
‘However a decision from the High Court in December has taken a different view on this decision. For more information about this, please see our consumer factsheet on compensation over £150,000.’
A spokesman for the FOS said: ‘We have to provide an accurate and fair representation of the current situation. We have to make sure they have correct and up to date guidance.’
The landmark ruling also has advisers concerned that professional indemnity insurance cover costs could rise as consumers can pursue them twice over the same piece of advice.
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by Michelle Abrego on Jun 18, 2013 at 18:29