Responding to large-scale surges in complaints driven by 'single-issue' consumer campaigns… is now becoming a regular feature of our workload. Traditionally, of course, the ombudsman's role was seen as dealing with individual disputes relating to one-off issues. The ombudsman's office was regarded as a kind of craftsman's workshop - not a factory for mass-production.
Braintree, Essex (PRWEB) December 18, 2008
Financial services consumers across the board are likely to suffer because of the wholesale failings we have seen in the payment protection insurance (PPI) market in recent years.
According to Sara-Ann Burgess, a vocal and continuous campaigner for improvements in the PPI market, widespread problems with PPI are putting a huge strain on the Financial Ombudsman Service (FOS) and putting it under significant pressure.
In turn, Burgess said this made it more difficult for consumers with problems in other areas to seek and receive fast and effective redress.
Burgess said: "The Financial Ombudsman has dealt with over 25 000 PPI complaints this year. This has clearly put a very significant amount of pressure on its resources and made it difficult for consumers with problems in other areas to receive the kind of attention and service they are looking for."
In its latest newsletter, the Financial Ombudsman admitted it was facing problems and said that if businesses took a greater responsibility for treating their customers fairly, then it would not be needed to adjudicate in so many near identical cases.
The FOS said: "Responding to large-scale surges in complaints driven by 'single-issue' consumer campaigns… is now becoming a regular feature of our workload. Traditionally, of course, the ombudsman's role was seen as dealing with individual disputes relating to one-off issues. The ombudsman's office was regarded as a kind of craftsman's workshop - not a factory for mass-production."
Burgess bemoaned the fact that the changing pressures being placed upon the FOS meant it was being forced into dealing with large scale single issues rather than being able to devote large amounts of time to more diverse problems.
She commented: "When the FOS has the time to research and investigate the wide range of problems that come before it, it acts as a final line of regulation, highlighting issues as they begin to appear. Unfortunately this function is being lost and the FOS is having to behave almost like a front line regulator because nothing is being done to effectively deal with high profile, single issue problems."
Burgess said she agreed with the FOS when it said: "Of course, the ideal solution would be for all financial businesses to treat their customers fairly (and to put things right when they go wrong) - either because businesses recognise this is the right thing to do, or because of effective regulatory scrutiny."
Looking towards 2009, Burgess said she hoped the Financial Services Authority and senior management in the firms under its remit would look to work more effectively together and deal with future issues before they swarmed out of control.
Burgess said both the regulator and financial providers had missed many opportunities to correct the problems in the PPI market and were now paying the penalty.
"Firms like British Insurance have been railing against many of the procedures in the PPI market for many years and the action that has finally been taken has been too long in coming. Had the market followed the lead of independent, ethical providers such as British Insurance and been quicker to take itself in hand, there would not be nearly so many consumers looking to complain."
In the future, Burgess said she hoped issues would be dealt with much more quickly and effectively preventing the need for consumers in their thousands having to individually fight for redress. In turn this would free up the FOS to deal with the type of complaints it was set up to handle.