FSC echoes calls for FOS consistency
The Financial Ombudsman Service (FOS) has been characterised by inconsistency, with the resolution and management of complaints dependent on the individual case manager, the Financial Services Council (FSC) says.
In a submission to an independent FOS review, the FSC echoed the concerns of the Association of Financial Advisers (AFA) about the significant variance between FOS case managers and their handling of decisions.
It said in some cases, the FOS case manager would close the file before the financial service provider responded, while in others it was kept open until resolved within 45 days.
Under a fairer model, the case manager should not be closing the file until the financial service provider had the opportunity to respond, providing it is within a reasonable time frame, it added.
Last week, the AFA raised similar concerns about consistency, also suggesting the authority was at times going beyond its jurisdiction to investigate advisers.
It said FOS appeared to be hearing and resolving issues that should have been thrown out immediately.
"We have received feedback that some frivolous and vexatious claims are being allowed into the FOS process when there are adequate grounds to reject them at the initial stage," the AFA's chief operating officer Philip Anderson said in the submission.
In one case, FOS intervened when the financial adviser had not yet been authorised by the financial service provider, the AFA said.
It also said there was a suggestion that some case managers were oriented towards getting the best consumer outcome, to the detriment of advisers.
The lengths FOS went to to actually test the complaints were also queried by the AFA.
"We have received feedback that the statements of complainants are often accepted without question," the submission said.
In its proposal, the FSC also advocated an amendment to allow FOS to discontinue the resolution process if the applicant did not accept a reasonable settlement offer from the financial services provider.
"It would mean that FOS could perhaps have matters resolved more quickly when the applicant may have unrealistic expectations," it said.
At present, the applicant bears no risk in rejecting reasonable offers, as it is the financial services provider who wears the cost, according to the FSC.
Both bodies said they intended to continue to work with FOS to come up with a fairer model for advisers and financial services providers.
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