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MPs demand assurances after undercover FOS doc

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MPs demand assurances after undercover FOS doc

The chair of the Treasury committee has written to the Financial Ombudsman Service (FOS) after undercover reporters claimed staff were judging cases with inadequate training or without proper checks.

On Monday Channel 4 aired an episode of Dispatches in which journalists went undercover at the FOS.

Channel 4 said that the investigation ‘found that staff with inadequate training or understanding of financial products are judging cases, with some having reached decisions in favour of the banks, without properly reading case files.’

The programme focussed on the FOS’s handling of payment protection insurance complaints. Over the last few years the FOS has been inundated with thousands of claims relating to the sale of PPI products.

Since April 2010 the FOS has rejected 496,000 PPI complaints and upheld 924,000. Banks have put aside billions of pounds apiece to cover the cost of PPI claim liabilities.

Treasury Committee chair Nicky Morgan (pictured) has written to Caroline Wayman, chief ombudsman and chief executive of FOS, asking for evidence it had dealt with past problems:

  • Assurances the problems identified in the Dispatches programme have not led to poor decision making at the FOS? For example, what are the FOS’s processes to undertake quality control on previous decisions? Does the FOS have the ability to reopen cases that it feels it may not have decided correctly?
  • The programme suggested there was a reluctance to issue public decisions for fear of creating a precedent. Does the FOS recognise there is this reluctance?
  • A response to the programme’s suggestion there was potential bias to decide in favour of a bank.
  • Provide full details on the seemingly forgotten cases and unopened correspondence described in the programme.
  • A comment on the training and specialism of staff at the FOS, specifically addressing the allegations that under qualified staff are being given responsibility for making decisions on cases for which they have inadequate training experience.
  • Provide a figure to the number of people who could have been affected by alleged errors or improper handling of cases?

In 2015 MP Rushanara Ali visited the FOS as part of her work on the Treasury Committee. One staff member told Dispatches: ‘We “managed” some of the visit to make the service look better than it was.’

‘There was a fake case-handling session…to show that the adjudicators and ombudsman were working together. It was an executive attempt to hide the fact people did not know what they were doing.’

Ali said the FOS should now appear before MPs, ‘to demonstrate that they have satisfactorily dealt with cases in the past.’ If the FOS cannot do that ‘then members of the public will want to go back and have their cases reviewed where appropriate.’

Morgan also asked Wayman to 'respond to the allegation that the FOS "stage managed" Rushanara Ali MP’s visit to your offices in 2015'.

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